This document discusses competencies needed for performance auditing. It begins by outlining the growing demands for accountability, transparency, and results in public sector management. This leads to the emergence of performance auditing to systematically examine government activities. The document then discusses challenges performance auditors face like complex government systems and needing foresight. It reviews definitions and frameworks of competencies from various sources. Competencies are grouped into general requirements, cross-cutting skills, and audit-specific abilities. Strong communication, ethics, and understanding contexts are emphasized. Finally, the conclusion stresses that a mix of competencies in audit teams is crucial for high-quality performance audits. Continuous skills development, coaching, and experiences across audit types

2. Needs, Challenges and Perceptions of
Performance Auditing
Understanding Competencies
INTOSAI Standards on Competencies
Performance Audit Competencies
Conclusion
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 Growing concern for better governance and greater accountability and transparency in the
management of public fund
 Call for increased focus on performance-based management and results in the public sector
 Emergence of complex service delivery approaches/arrangements
 Systematic, comprehensive and constructive examination of government activities (plans and
objectives, method of control, means of operations and use of resources
 Assessment on the performance of the activities with information, observations and
recommendations designed to promote accountable, honest and productive government;
and encourages best practices
 USA (started in 1800s)
 UK & Australia (since 1970s)
 Malaysia (since 1980s)

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 Complexity of the government environment, accounting and system
 Auditors’ competencies and experiences in performing the audits
 Auditors’ professional judgment and resilience
 Interaction with stakeholders and society
 Not adding value in the public interest
 Inability of the auditors to provide foresights based on industry and
cross-industry trends which could contribute to the improvements
of the government operations

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 Traced to early 1970s
 In 1973, David McClelland wrote a seminal paper “Testing for Competence
Rather than Intelligence”
 Its origins in the Latin word 'competentia' which means is authorised
to judge as well as has the right to speak (Caupin, 2006)

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McClelland (1973)
 Competence as a personal trait or set of habits that leads to more effective or
superior job performance, in other words, an ability that adds clear economic
value to the efforts of a person on the job.
Klemp (1980)  Competency as, an underlying characteristic of a person which results in effective
and/or superior performance on the job.
Boyatzis (1982, 2007)
 Adopted the term competency an “underlying characteristic of an individual that
is casually (change in one variable cause change in another) related to superior
performance in a job”.
Spencer and Spencer
(1993)
 Skills & abilities-things you can do which is acquired through work experience, life
experience, study or training.
Page and Wilson
(1994)
 The skills, abilities, and personal characteristics required by an effective or good
manager”

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Gilbert (1996)
 The state of being competent which refers to having the ability to consistently
produce the results (the worthy outcomes of behavior) that are required for the
most efficient and effective achievement of the larger organisational goals.
Dubois (1998)
 Characteristics comprising of knowledge, skills, mindsets, thought patterns, and
the like that, when used either singularly or in various combinations, result in
successful performance.
Chouhan and
Srivastava (2016)
 Quoted Lucian Cernusca and Cristina Dima (2007) research which explained the
concept of competency and how competency is linked to performance and one‘s
career development.
Gaspar (2012)  Competency based selection method is healthy, structured and comprehensive

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Competencies include the collection of success factors necessary for achieving
important results in a specific job or work role in a particular organization. Success
factors are combinations of knowledge, skills, and abilities (KSA) that are described in
terms of specific behaviors, and are demonstrated by superior performers in those
jobs or work roles.

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Tucker and Cofsky, (1994)
i. Knowledge - information and learning resting in a person. Eg. surgeon‘s knowledge of Human Anatomy.
ii. Skill - A person‘s ability to perform a certain task. Eg surgeon‘s skill to perform a surgery.
iii. Self-Concepts and Values – A person‘s attitudes, values and self- image, self- confidence, a person‘s belief that
he or she can be successful in a given situation. Eg. A surgeons self -confidence in carrying out a complex
surgery.
iv. Traits-Physical characteristics and consistent responses to situations or information. Good eyesight is a
necessary trait for surgeons, as is self-control is an ability to remain calm under stress.
v. Motives-Motives are emotions, desires, physiological needs or similar impulses that prompt action. Eg. surgeons
with high interpersonal orientation take personal responsibility for working well with other members of the
operating team.

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Katz and Kahn (1986)
i. Technical or Functional (knowledge, attitudes, skills, etc. associated with the
technology or functional expertise required to perform the role);
ii. Managerial (knowledge, attitudes, skills, etc. required to plan, organise, mobilise
and utilise various resources);
iii. Human (knowledge, attitudes and skills required to motivate, utilise and develop
human resources); and
iv. Conceptual (abilities to visualise the invisible, think at abstract levels and use the
thinking to plan future business).

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Chouchan and Srivastava quoted Carrol and McCrackin (1988) )
i. Core competencies (Hamel and Prahalad, 1994): A core competency forms the basis for strategic
direction; it is something a company does well relative to other competitors. Core competencies refer to
the elements of behavior that are important for all employees to possess as, for example, a core
competency in "result/ quality orientation".
ii. Leadership / managerial competencies: This category involves competencies that are related to
leading an organization and people. Some examples include "visionary leadership", "strategic thinking",
and "developing people".
iii. Functional competencies: These are job-specific skills required to perform a particular job role or
profession.

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ISSAIs 300:30  Auditors should possess adequate professional competencies to perform their tasks
ISSAI 3000:63
 Profesional competence includes good auditing knowledge, research design,
methods applied in social science, investigation or evaluation techniques, as well as
personal abilities such as skills in analysing, writing and communicating
 Creativity and openess. It also mentioned that for specialised knowledge, external
experts can be used to complement the audit team
 Good knowledge of government organisation, programmes and functions is crucial
so that auditors can assess implementation of government activities and
programmes effectively
 ISSAIs 300 – Fundamental Principles of Performance Auditing
 ISSAI 3000 – Standards for Performance Auditing.
INTOSAI has issued a document on competency framework for public sector audit
professionals at supreme audit institutions in 2016

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4.1
• General Competency Requirements
4.2
• Cross-Cutting Competencies
4.3
• Audit Specific Competencies

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General Competency Requirements
 A Performance Auditor must be well educated and in general, should have
university degree (eg. Accounting, Finance, Economics, Statistics, Information
Technology, Engineering, Social Science) with the previous necessary experience
related to auditing would be an added value

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Cross-Cutting Competencies
i. SAI audit professional leads by example
ii. SAI audit professional engages effectively with stakeholders
iii. SAI audit professional behaves in a professional manner
iv. SAI audit professional contributes to the value and benefits of SAI

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i. Demonstrate ethical behaviour in all situations; display personal accountability; respect diversity
and demonstrates basic leadership skills
ii. Understand the code of ethics and acts and comply to the SAI culture, policies and procedures
iii. Accountable for meeting performance targets, open to criticism and display willingness to take
corrective action
iv. Understand the cultural norms within the working environment and respond effectively to the
differences
v. Demonstrate an ability to influence, inspire and motivate others

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i. Understand the explicit and implicit needs, expectations and operations of the
internal stakeholders (SAI management, peers and team) and external stakeholders
(audited entities, parliament, media, citizen, etc)
ii. Understand the principles of and the need for SAI independence
iii. Communicate effectively to the stakeholders both verbally and in writing, takes
into consideration the stakeholders’ views, able to use different types of media
tools (general presentations, electronic and social media) for communicating with
stakeholders.

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i. Sound knowledge and understanding of ISSAIs and able to apply or aligned with national standards
ii. Exercise professional judgment and scepticisms while applying standards
iii. Demonstrate core audits and information technological skills. These includes analytical skills and
ability to synthesise the information, document due process/work performed in reaching the audit
opinion, use information technology to conduct audits; ability to interpret and provide broader
context using financial and non-financial information drawing from a wide variety of sources
iv. Continuously strives for excellence by seeking opportunities to grow and develop KSA, thinks in a
critical and objective way and questions the status quo to stay relevant, advocate positive change
and shows an ability to learn from successes and failures

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i. Auditors can contribute to SAI performance by aligning personal performance goals to the strategic
directions of the SAI; behave in a manner consistent with the requirements of the ISSAI framework,
as well as the SAI’s image and reputation; and monitors and follows up on audit outputs
ii. Auditors can contribute to effective management by working in a team to manage organisation risks
and resources; provide timely, sufficient and appropriate information to enable them to make
informed and strategic decisions
iii. Auditors must always act in the public interest. Auditors must understand that the SAI exists to
serve the citizens and behaves according. They must be responsive to issues close to the heart of
the citizens as well as emerging issues

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Audit Specific Competencies
i. SAI audit professional adds value by conducting ISSAI-compliant performance
audits
ii. SAI audit professional demonstrates an understanding of context, environment
and entity in a performance audit.
iii. SAI audit professional assesses and manages risk in a performance audit.
iv. SAI audit professional performs and documents performance audit procedures as
per ISSAIs.
v. SAI audit professional effectively communicates and follows up on performance
audit results.

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i. Understand how the audits add value to improve governance, accountability, transparency and
service delivery in public financial management as well as across a range of varied government
operations and services that are linked to implementing Sustainable Development Goals (SDGs)
and/or their national equivalents
ii. An understanding of the nature and objectives; approaches; applying concepts of 3Es (Economy,
Efficiency and Effectiveness) as well as criteria, condition, cause and effect; the process; managing
the risks of inappropriate reports and giving constructive recommendations
iii. Professional judgement and scepticism must be exercised throughout the performance audit

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Auditors must evaluate entity’s organisational structures, culture, business
processes, operations and systems and interrelationships between entities
in case there are many entities involved

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i. Select a portfolio of performance audit topics based on a set of criteria (financial materiality, risk to
good management, impacts of the audit, auditability, significance, visibility and coverage) that will
add value for the users of the report
ii. Manage the risk of performance audit giving incorrect or incomplete conclusions, providing biased
information or failing to add value. This is done by conducting a preliminary study and risk analysis,
considering all important factors related to the audit topic, gathering sufficient and appropriate
evidence, consulting widely both within and outside the audit team and providing users of the audit
report with new knowledge and recommendations that would make a real contribution to better
performance

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i. Document the planning, implementation and reporting stages as required by ISSAIs.
Materiality throughout the performance audit process and the sampling must be
determined
ii. Demonstrate an ability to use social science methods and diagnosis techniques (e.g.
SWOT analysis, risk analysis, stakeholder analysis, process mapping, case study, etc.)

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Auditors must demonstrate an ability to write an audit report that is comprehensive,
convincing, reader friendly and balanced. Special care has to be taken when
formulating the recommendations. Auditors must write clear and well-founded
recommendations and presented it in a logical and reasoned way and address the
causes of problems and/or weaknesses

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The success of a SAI depends mostly on the quality of the human
resources. A SAI rely on their competent employees a main resource. A
SAI must formulate strategies that will ensure the Performance Auditors
of today and tomorrow, both individually and collectively as audit teams
have the necessary competencies to deliver high quality public interest
Performance Audits.

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An appropriate mix of general
requirements, the cross-cutting and
audit specific competencies need to
be combined in a performance audit
team in order to perform a high
quality public interest audit in the
modern and complex government
environment
The audit team must be of the right
size and structure with requisite
experiences in financial and
compliance audits.
Careful assignment of audit work to
the team members, appropriate
supervisions and appropriate use of
experts are equally important.
Lateral deployment among the
Financial, Compliance or
Performance auditors will need to be
made to bring the senior officers
with key specialist capabilities into
the Performance Audit team.
Coaching and mentoring of junior
Performance Audit staff must be
embraced within the audit team.

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The skills which need to be continuously developed and enhanced are on problem solving,
relationship building, data analytics, project management, conflict resolution skills,
forensic/investigation skills, case study analysis, sampling and data gathering skills, evaluation
design, communication & negotiation, reader-based writing and team dynamics.
Training programmes which focused on experiential learning through real life auditing case and
practical courses on information technology
Development of professional scepticism skill as an attribute for junior staff members using audit
simulations
i.
ii.
iii.

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