Page 203 - DCOM509_ADVANCED_AUDITING

Advanced Auditing

Notes
each audit team and scores were reached by consensus. The results showed a range of
capabilities, but a number of common deficiencies were noted across the supply base.
Specific improvement initiatives were identified for each supplier in particular, and for
all suppliers in general. Follow-up audits by a CP-India team and subsequent visits by US
personnel have shown quantified improvement and greater uniformity in approach and
execution across the supply base.
Source: http://asq.org/qic/display-item/index.html?item=11028

Self Assessment

Fill in the blanks:

1. ………. is considered at the financial statement level during the audit planning process.
2. Audit risk is the risk that an ……… may give an inappropriate opinion on financial
information that is materially misstated.

3. ……… Sampling in auditing stands for the technique of forming an opinion about a group
of items on the basis of an examination of a few of the items.
4. The ……… of assets like land the buildings should be verified by examining title deeds.

5. The auditor has to satisfy himself that the ………. exhibit a true and fair state of affairs
having regard to all material aspects.
6. …….. special audit report is commissioned from outside the company.

7. A ………. company that owns subsidiaries in foreign countries may commission a special
audit of these subsidiaries so as to determine their viability.
8. A qualified ………. special audit report is issued when an auditor discovers anomalies in
the financial statements of an organization.

11.2 Concept of Efficiency Audit

The Auditor General’s mandate for auditing the efficiency of government operations originates
from section 7 (2) (d) of the Auditor General Act. It states ‘’...The Auditor General ... shall call
attention to anything that he considers to be of significance and of a nature that should be
brought to the attention of the House of Commons, including any cases in which he has observed
that ... money has been expended without due regard to ... efficiency.” This mandate is interpreted
to include examining an entity’s management systems, practices, and results to determine
whether they demonstrate due regard to efficiency. It also includes assessing the level of efficiency
achieved. This Guide is intended to help Office of the Auditor General (OAG) auditors fulfil that
mandate. Some key points are the following:
 There are profound differences between the private and public sectors, as well as similarities.
The forces of the marketplace do not always apply to government operations. The cost,
quantity, and quality of government products and services usually are not determined by
the forces of supply and demand, or by the profit motive and competitiveness present in
the private sector. The similarities derive from an obligation to provide goods and services
to clients. Public servants, however, have an additional responsibility to comply with
government-wide management policies; multiple (and at times conflicting) program
objectives, and service levels that in some cases may be defined by legislation. These
factors need to be taken into consideration in assessing efficiency.

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