1. RTI, MUMBAI / CH 9 QUALITY ASSURANCE IN PERFORMANCE AUDIT DAY 9 SESSION NO.3 (THEORY) BASED ON CHAPTER 9 PERFORMANCE AUDITING GUIDELINES

2. RTI, MUMBAI / CH 9 Learning Objectives In the previous session we discussed :  SAI India’s Auditing Standards  Quality assurance and quality control  Quality assurance system in SAI India

3. RTI, MUMBAI / CH 9 Cont… In this session we will discuss  Quality assurance reviews & quality assurance review programme  Standardisation of quality assurance questionnaire  Report on quality assurance review  Standards of assessment  Annual summary of quality assurance review  Skill and Knowledge of audit personnel and training  Annual training and professional development programme

4. RTI, MUMBAI / CH 9 Quality assurance reviews & Quality assurance review programme  Quality assurance review is a deliberate exercise to provide feedback on functioning of the quality assurance systems measures.  Quality assurance review is to be carried out at various stages of the performance audit process.  The quality assurance review may consist of the following features:  Planning reviews  On-going reviews  Task reviews  Product review  Annual review programme

5. RTI, MUMBAI / CH 9 Quality assurance review programme  Performance audit quality assurance review programme is a series of independent peer reviews of the activities undertaken within the SAI to assess the overall quality of performance audits.  The objective of the programme should be to provide an assurance that the task have been performed strictly in accordance with the standards and guidelines as also to establish whether the policies and procedures themselves needed any modifications.  Quality assurance reviews address both adherence to the prescribed procedures and the quality of work performed.

6. RTI, MUMBAI / CH 9 Standardisation of Quality assurance questionnaire  the quality of reviews can be substantially enhanced with the help of a standard exhaustive questionnaire or check-list, which can form a framework for quality assurance review.  SAI headquarters may prescribe detailed questionnaire for quality assurance review, consisting of the questions applicable generally to performance audit in all sectors, viz., civil, defence, railways, etc.  Questions specific to audit of different sectors of entity operations may be added to the questions of general applicability.

7. RTI, MUMBAI / CH 9 Report on quality assurance review The result of quality assurance reviews may be placed before SAI top management annually, or on demand during the course of the year. The structure of the report consist of:  constitution of the quality assurance review team;  terms of reference, if any;  period of coverage and period during which the quality assurance review was carried out;  objectives of quality assurance review;

8. RTI, MUMBAI / CH 9 Cont…  special tasks assigned by SAI top management, if any;  highlights of the findings – positive findings on good practices, deficient practices and procedures, and requirement of modification of any of the existing practices and procedures; and  detailed findings and recommendations.

9. RTI, MUMBAI / CH 9 Standards of assessment  The focus of the quality assurance review should be on the quality of processes and task performance, including documentation rather than personnel oriented

10. RTI, MUMBAI / CH 9 Annual summary of quality assurance review  SAI may publish an annual summary of quality assurance reviews, for internal use within the department, highlighting the best practices or benchmarks in the field offices which may be emulated by others and deficient procedures and practices that should be improved.

11. RTI, MUMBAI / CH 9 Skill and knowledge of audit personal and training  One of the most important prerequisite of good quality audit is the competence of audit personnel.  The competence of audit personnel is established through qualifications set for each grade of audit personnel, competitive selection process and training and development.  The qualifications and the selection procedures for audit personnel are already well established.

12. RTI, MUMBAI / CH 9 Cont…  The SAI and the Accountants General may give special attention to their training and skill development for performance audit.  While training and development may be necessary for all auditors, it is critical for the performance audit, which is a knowledge-based activity.  It will, thus, be imperative that the performance auditors are provided training for skill development to refine their concept of objectives of the performance audits and the procedures for each stage in the performance audit cycle.

13. RTI, MUMBAI / CH 9 Auditing Standards  The audit department needs to command a range of skills and experience necessary for effective discharge of the audit mandate.  Persons whose education and experience is commensurate with the nature, scope and complexity of audit task should carry out the audit task.  The audit department should equip itself with the full range of up-to-date audit methodologies, including system-based techniques, analytical review methods, statistical sampling, and audit of automated information system.’

14. RTI, MUMBAI / CH 9 Annual training and professional development programme  Accountants General may include the training requirement of the audit personnel for performance audits in the overall annual training programme for their offices in a distinct section.  The objective of training and skill development in performance audit should be to improve the audit acumen, competence and knowledge management.

15. RTI, MUMBAI / CH 9 Session Summary  Quality assurance reviews & quality assurance review programme  Standardisation of quality assurance questionnaire  Report on quality assurance review  Standards of assessment  Annual summary of quality assurance review  Skill and Knowledge of audit personnel and training  Annual training and professional development programme