This document discusses the importance of internal audit and performance-based auditing. It provides an overview of internal auditing, why organizations should implement it, and how it relates to risk management. Performance-based auditing assesses whether control frameworks are achieving organizational goals in an efficient and effective manner. The document also discusses how any organization can set up internal audit and controls through triggers, performance measurements, and automation tools. Key success factors include stakeholder involvement, continuous review, deploying the right tools, education, and acting on audit findings.

1. Importance of Internal
Audit and Performance-
based Auditing
PAUL YOUNG CPA CGA
MARCH 9, 2020

2. Paul Young - Bio
• CPA, CGA
• Academia (PF1, FA4 and MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

3. Agenda
 Top Risk Areas for business 2020
 Management and Risk
 What is Internal Auditing?
 Why should all organizations implement
Internal Audit?
 Internal Audit and Risk Management
 What is performance-based auditing?
 Value for money
 Can any organization set up internal audit
management and reporting?
 Examples of Automation Tools/Videos
 Use of python programming / audit
 What’s next

4. Top Risk Areas for Businesses and the
Public Sector 2020
Source: https://www.prnewswire.com/news-releases/top-risk-concerns-for-business-leaders-in-2020-include-
talent-culture-technology-and-innovation-finds-protiviti-nc-state-survey-300973766.html

5. Management and Risk
 More and more organizations are including risk management reporting as part of their overall
assessment of health - https://www.globenewswire.com/news-release/2019/12/12/1959797/0/en/Global-
6-75Bn-Third-Party-Risk-Management-Market-2019-2024-Analysis-and-Outlook-Report.html
 Technology and changes to economic conditions are leading to more and more organizations to be
more agile
 Privacy and securing of data is becoming a very big area for an organization, i.e. reputation -
https://www.marketsandmarkets.com/Market-Reports/data-protection-market-
214254944.html?gclid=Cj0KCQiAl5zwBRCTARIsAIrukdPjkUeYc_9nIzuzW1ZiuSEUv7MGtXz0yo-
mHv3b0oY8HpGk3TQRtyMaAh4REALw_wcB

6. Internal Audit
– What is it?
Source -
https://www.investopedia.co
m/terms/i/internalaudit.asp

7. Why should
Organizations
implement
Internal Audits
 Safeguarding of assets
 Better oversight and control of how money is
spent
 Protection against cyber attacks
 Performance based audit (value for money)
 Board of Directors, Taxpayers and others are
demanding more oversight and accountability
on how dollars are spent

8. Internal Audit and
Risk Management
Source -
http://broadleaf.com.au/reso
urce-material/relationship-
between-internal-audit-and-
risk-management/

9. What is performance-based auditing
Source - https://chapters.theiia.org/vancouver-island/Events/Pages/Performance-Based-
Auditing.aspx
Auditing in the public sector means more than simply determining if controls are in place and regulations are being
followed. Public sector auditing, in many cases, means you will be dealing with varied constituents and often working in a
more public forum.
For new and experienced government and public sector auditors facing these unique challenges, this course will provide
new insight that includes assessing whether or not control frameworks are working to further an organization’s goals and
achievements. By learning to review an organization or department’s objectives and assess the risk to achieving them,
public sector auditors in this program will be able to effectively evaluate the organization and ensure that it is working
toward or maintaining a high level of performance.
Areas of focus:
• Management Issues, Concerns, and Functions
• Control Frameworks
• Risk-based Approach to Performance Auditing
• Value-for-money Approach to Performance Auditing
• Performance Measures

10. Value for Money
Source - https://www.iasplus.com/en-ca/standards/assurance/other-canadian-standards/section-ps-5400-value-for-money-auditing-in-the-
public-sector or https://www.niauditoffice.gov.uk/value-money-audit
An independent evidence-based investigation which examines and reports on whether economy, effectiveness
and efficiency has been achieved in the use of public funds.
Objectives
The primary objectives of value for money (VFM) audit are to:
• provide the Assembly with independent information and advice about how economically, efficiently and
effectively departments, agencies and other central government public bodies have used their resources;
• encourage audited bodies to improve their performance in achieving value for money and implementing
policy; and
• identify good practice and suggest ways in which public services could be improved.
An Organizations seeks to promote better value for money by highlighting and demonstrating to audited
bodies ways in which they could make improvements to realize financial savings or reduce costs; guard against
the risk of fraud, irregularity and impropriety; provide a better quality of service; strengthen and enhance their
management, administrative and organizational processes; and achieve their aims and objectives more cost-
effectively.

11. Can any
organization
undertake
Internal audit
and controls?
All organizations can set up internal control process and/or
reporting:
 Triggers can be created based on pre-defined
measurement and/or control framework -
https://www.investopedia.com/terms/c/continuous-
auditing.asp
 Performance Measurements can be set up as part of
measuring program outcomes against success criteria.
(AI and BI tools can be set up to help with performance
measurements reporting)
 External Audit firms can work with organizations to set
up control frameworks, performance measurements, etc.
 IT personal/Accounting teams can set up triggers with
databases and/or accounting software by establishing
audit reporting (i.e. error reports, reconciliations reports,
security access reports, etc.)

12. Automation
tools/Internal
audit

13. Use of Python
Programming
/ Audit

14. Key success with
Internal Auditing
 Working with all stakeholders including
outside consulting to design the control
framework, measurements, triggers, etc.
 Continuous review of audit programs to
ensure they are effective
 Deploying the right tools (AI and Analytics)
 Educating all levels of the organization on
Internal Audit and Risk
 Acting on the findings as part of
safeguarding assets.

15. Other Sources
 If you like to learn more
about trade and/or
other subjects as part of
your professional
learning and
development then feel
free to review my
material on
https://www.udemy.co
m/ (search Paul Young
CPA CGA