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Aikins Presentation on Audit Objective.pptx
- 2. OUTLINE OF PRESENTATION • Learning Objectives • Definition of Audit Objective • Importance of Audit Objective • Determinants of audit objective • Things to note about Audit Objective • Questions to ask when setting Audit Objective • Examples of Audit Objectives
- 3. LEARNING OBJECTIVES Understand what an Audit Objective is Understand Be able to set realistic and measurable Audit Objectives Be Link audit objectives to audit questions Link
- 4. Definition of Audit Objective
- 5. Definition of Audit Objective
- 6. IMPORTANCE OF AUDIT OBJECTIVE Provide direction to the auditor Help to determine the audit scope, methods of data collection, assessment criteria, findings and conclusions Saving audit resources in terms of time, personnel and costs
- 7. THINGS TO NOTE ABOUT AUDIT OBJECTIVE Defining the audit objective is an important step in the planning process Definitions should not be vague or ambiguous Any technical term used in the audit objective should be defined Minor changes to the audit objective may have a major impact on the scope of the audit
- 8. QUESTIONS TO ASK WHEN SETTING AUDIT OBJECTIVE Is the audit objective clear/specific and measurable? Is it attainable, given the resources, including skills, at our disposal? Is it realistic given the resources that we have? Is it within our SAI’s mandate? Will the audit scope be too wide/narrow, preventing the audit from achieving any meaningful impact? Will the accomplishment of the objective result in new knowledge or solve the audit problem? Will its accomplishment result in better management of the area under audit?
- 9. EXAMPLES OF AUDIT OBJECTIVES ‘To determine whether Ministry of Fresh Water Quality and Ministry of National Hydrometric of Osterlich’s measured and reported on the progress of the Fresh Water Quality Monitoring Program and the National Hydrometric Program in achieving their planned results.’ ‘The objective of the audit was to determine whether AMA is managing human effluent efficiently to ensure a healthy environment and public health for residents of the city.’ ‘The objective of the audit was to determine the extent to which the Forestry Commission (FC) of Ghana had managed the implementation of the programme’s activities intended for increasing the nation’s forest cover.’
- 10. GROUP EXERCISE
Editor's Notes
- The objectives are what the audit is intended to accomplish. They identify the audit subject matter and performance aspects to be included, and may also include the potential findings and reporting elements that the auditors expect to develop. Audit objectives can be thought of as questions about the program that auditors seek to answer based on evidence obtained and assessed against criteria.
- If you don’t know where you are going, any road may lead you. The curved lines indicate lack of objective whiles the straight red line indicate presence of objective. The point is to reduce the muddle (the confusing execution) - straighten out the road to the end. And also ensure that we actually get to desired destination
- A Bad Audit Objective: Imagine your supervisor handing you this objective and telling you to get it done in two months: “Examine internal controls at the entity”. The team conducting fieldwork cannot be set loose on something like that. There’s no telling what they might come back with. The objective is much too vague and broad: internal controls at the entire entity?
- Here is an example of how to improve an audit objective: STINKY: Determine whether the entity has strong controls over assets. BETTER: Determine whether St. Mary’s Hospital is guarding the medical equipment from theft. The stinky objective could lead you anywhere – to any part of the entity and to any asset.