What is an audit of the effectiveness of the use of budgetary funds. Financial and performance audit
Stage of direct performance audit
In some editions and publications, this stage is also called control or evidence-gathering stage.
aim this stage is the collection of a sufficient amount of evidence, which together provide a convincing basis for the preparation of an audit report and allow you to determine the effectiveness of the audit object according to the criteria and indicators established by the program, as well as identify violations of the current legislation and regulations.
At this stage, an actual examination of the object of verification is carried out, which includes:
visual acquaintance with the object;
analysis of object operation methods;
analysis of the facility management system;
verification of internal control systems;
study of regulatory, administrative and financial documentation;
establishment of causal relationships;
assessment of risks (influence factors) affecting the activity of the object of verification, and determination of their significance;
analysis of the results of the object;
study of specific situations.
Let us dwell in more detail on the assessment of the risks that the object being checked faces in its work. These types of risks should not be confused with audit risks.
In this case risks - these are factors, action (inaction), or events that negatively affect the object being checked, which can lead to financial losses, damage, or inability to implement the functions and tasks assigned to the object of verification by legislative or regulations.
To determine the degree of risk, it is necessary to establish:
The list and nature of deviations from the tasks established in the work of the inspected object;
The degree of probability of occurrence of such deviations;
Consequences of deviations;
Availability of opportunities to minimize the impact of identified risks on the scope and results of the audited facility.
Examples of such risks may be: insufficient funding, the adoption of managerial, personnel and other decisions that impede the fulfillment of the tasks and functions assigned to the object of verification, external factors, and others.
At the stage of direct control, it is very important to answer all the questions indicated in the program (taking into account possible additions that arose during the audit). The amount of evidence is considered sufficient if they together provide a convincing basis for the preparation of an audit report.
The final document of this stage is an act (or several acts) and a draft report, which reflects the shortcomings in the work of the object and the effectiveness of its activities.
In some editions and publications, this stage is often referred to as analytical and synthetic stage.
At this stage, it is important to analyze in detail the results of the facility’s activities, violations of the current legislation, to identify causal relationships between the efficiency of the facility and the optimal operation of the management system, as well as the influence of other external factors.
aim the final stage is the development of specific scientifically based recommendations and proposals for improving the efficiency of the inspected object.
When developing proposals, it is advisable to classify them in the following areas:
social;
organizational;
economic;
legal;
informational;
technological.
For each of these groups, it is necessary to carry out calculations that show the effectiveness of the implementation of proposals, as well as consultations and discussions with specialists from the object being checked.
Remarks and conclusions can be positive or negative. They, if possible, should be presented in quantitative (price) terms and reflect:
the scale of the problem;
how often it occurs;
How many people does it affect?
what are the possible losses of potential savings.
Comments and suggestions should be:
correct and essential;
lead to improved efficiency, effectiveness or accountability;
be solely for the purposes of the audit.
The final document of this stage is final report with reasonable conclusions about the efficiency of the facility and the factors influencing it, as well as presentation, policy brief or policy report.
Determination of objectives and issues of performance audit
Objectives of performance audit - it is a precise statement of what must be done in the course of its implementation. Objectives should be clearly defined so that the performers involved in the audit clearly understand what work they need to perform.
The objectives define both the control activities that need to be carried out, the objects of audits, and the aspects of functioning that need to be checked, and the methods and procedures that need to be used to ensure that the conclusions and recommendations of the performance audit are formed objectively.
As a rule, the objectives of a particular performance audit are established when formulating its topic and are associated with the specifics of the tasks solved by the control and accounting body.
The objectives of the performance audit are the basis for determining the control measures (checks), which are the main sources of information for the formation of conclusions and recommendations of the performance audit. At the same time, it is important to clearly define which issues need to be audited to achieve the audit objectives, since the needs to achieve the objectives of the performance audit are decisive when choosing issues and objects of audits. It is also important to respect the principle that each audit should provide clear and concise answers to the questions posed to it, on the basis of which it is possible to draw objective and reasonable conclusions relevant to the performance audit being conducted. When determining audit questions, one should also be guided by the fact that these questions should always correspond to the tasks that the audit and accounting body is called upon to solve through a performance audit.
When determining the objectives of a particular audit, they usually proceed from what questions regarding the work of a given organization or a given line of activity, its conduct will help answer. Examples include aspects of performance such as efficiency, cost savings and efficiency.
For example, the goals of checking the effectiveness of the implementation of a federal target program can be determined in the process of consideration:
Goals and objectives that were laid down in the program itself;
Financial, labor, material and information resources that were used in the process of its implementation;
Processes or types economic activity, through which the costs of implementing this program are converted into its results (output of products, provision of services, etc.);
The actual consequences or results of the implementation of this program.
Ideally, the objectives of the audit can be derived from the objectives of the auditee to achieve specific results of its activities, or the goals and objectives that are established in the program being audited, or from objectives related to the achievement of results in the work of the organization, this sector or functional areas.
When choosing targets, the significance of the issues being tested should be taken into account. Significance of the issue lies in its relative importance to the ultimate objectives of the audit, as well as to potential users of audit reports. Both qualitative and quantitative factors are important in determining significance. Qualitative Factors may include:
a) public availability of information on this activity, as well as the ability of this activity to attract the attention of the general public;
b) the novelty of the program or changes in its conditions;
c) the role of the audit in providing information that can improve public accountability and effectiveness in decision-making;
d) the level and extent of verification or other forms of independent control.
Potential users of audit reports may include legislators (representative) authorities and government officials who may authorize or require an audit. Another important user of the audit report is the audited business entity, which is responsible for implementing the audit recommendations. Potential users of audit reports may also include members of the press, stakeholders and individuals. Understanding the interests of these potential users can help auditors understand why the audit should be conducted the way it is. Such awareness can also help auditors judge whether the findings are meaningful to those users.
The objectives of the performance audits should be carefully considered and clearly articulated in such a way that, at the completion of a particular audit, the members of the audit team can draw appropriate conclusions based on the results of achieving each of the specified objectives. Since the forthcoming review will be aimed at finding answers to questions that are reflected in its goals, these goals should be formulated as clearly as possible. This will help avoid unnecessary and costly audits. Any changes regarding the objectives of a particular review, as well as the main arguments and arguments in favor of such changes, must be bring to the attention of the management of the control and accounting body responsible for conducting this performance audit.
It should be borne in mind that in many cases the activities of the control and accounts body also include the provision of valuable and necessary information deputies of the legislature (parliament). Such purposes, not directly related to this performance audit and in respect of which conclusions and conclusions are not expected to be drawn, should be separated from the purposes on the basis of which conclusions and recommendations will be drawn.
Subject of performance audit- subject to verification specific areas of activity of the audited object.
Performance Audit Object– legal entities and individuals subject to verification.
Determining the issues and objects of audit is an essential element in the preparation of a performance audit program that determines the scope of its implementation. In this regard, the Methodology for Conducting an Audit of the Effectiveness of the Use of Public Funds 11 states that:
“The program should contain a clear list of issues and objects of verification that determine the scope of its implementation.
When determining the scope of an audit, the resources allocated to the audit and the efforts of the audit team should be focused on a relatively small number of substantive issues and on such a number of objects that:
a) are relevant to the objectives of the review;
b) are important from the point of view of the efficient use of public funds;
c) can be verified based on available resources.
In order to select the objects of the audit, to assess the importance of certain aspects of their activities and the need to focus on them within the framework of this audit, the auditors must determine:
The degree of influence of the object of verification on the achievement of results in this area;
The presence of risks in the activities of the object of verification;
The amount of public funds used;
Will the results of the audit contribute to improving the efficiency of work and the use of public funds by the audited object.
When determining the scope of an audit, it is necessary to consider the conditions for its implementation, that is, the ability and ability of the group of auditors to carry out this audit in accordance with the approved methodology for conducting a performance audit. There may be situations when the audit manager decides not to include a particular audit issue in the audit program, even if, according to the results of the preliminary study, it is material. This decision may be made if:
The nature of this activity is such that it is not feasible or appropriate to verify it;
The members of the review team do not have the necessary expertise for this, and the involvement of external experts is problematic;
Radical changes and transformations are taking place in this area;
There are no suitable criteria for evaluating the effectiveness of this type of activity or the work of the object of verification.
The head of the audit must report this to the management for a final decision.
The result of the work on establishing the scope of the audit is the definition in the program of a list of specific issues and objects of verification. In this case, one should be guided by the rule that such questions are selected for verification that reflect the goal of the verification and are of fundamental importance for the successful implementation of the audited activity. As objects of audit, it is necessary to choose such organizations in whose activities there is the highest degree of risk and, based on the results of the audit, it is possible to have a significant impact on improving the efficiency of the use of public funds.
For example, the methodology for conducting an audit of the effectiveness of the use of public resources to provide citizens Russian Federation free medical care provided in accordance with the requirements of Article 41 of the Constitution of the Russian Federation 12 defines the goals, subject and objects of the specified performance audit as follows:
« The purpose of a performance audit the use of public funds to provide citizens of the Russian Federation with free medical care is to determine the rationality and effectiveness of the activities of executive authorities at all levels in the field of healthcare, the Federal and territorial funds for compulsory medical insurance, state and municipal health care institutions, insurance medical organizations operating in the system of compulsory medical insurance in the exercise of the functions assigned to them and the fulfillment of the tasks assigned to them to implement the constitutional right of citizens of the Russian Federation to free medical care at the expense of the budgets of all levels, the system of compulsory medical insurance and other receipts.
The subject of a performance audit use of public funds allocated for the provision of free medical care to citizens of the Russian Federation are:
The process of providing the population with free medical care in accordance with the Constitution of the Russian Federation and other regulatory legal acts of the Russian Federation;
Spheres, directions and types of activities of executive authorities at all levels in the field of healthcare, the Federal and territorial funds of compulsory medical insurance, as well as state and municipal healthcare institutions that provide citizens with free medical care;
Health care management system and organization of financing of free medical care in the Russian Federation.
Performance Audit Objects use of public funds allocated for the provision of free medical care to citizens of the Russian Federation are:
executive authorities of all levels in the field of healthcare, state and municipal healthcare institutions providing free medical care to the population;
Federal and territorial funds of obligatory medical insurance;
insurance medical organizations using the means of compulsory medical insurance in their activities.
Determination of the scope of the performance audit, methods and methods of its implementation
Depending on the chosen topic of the control activity, the subject and objects of control, methods and methods of its implementation, the conducted performance audits can differ significantly from each other in their scope.
The scope of the performance audit directly depends on its objectives and the number of objects to be audited, as well as on the time interval that this control measure covers: if it is two years - one scale, if five years - another. In addition, the scope of the performance audit is determined by the availability of information, its completeness, the ability to use the results of monitoring, if it is carried out, as well as the results of internal financial control, if its state meets the relevant requirements. The high quality of internal financial control carried out by the control bodies established by the executive branch eliminates the need for control and accounting bodies, when conducting a performance audit, to check in detail the status of personal and other accounts opened for performance audit objects by treasury bodies and credit organizations, accounting and budget accounting, financial statements. This enables the specialists who carry out this control activity to focus on the collection of actual data, their analysis and analysis of the results of internal financial control.
The scope of the performance audit and the selected criteria and indicators for evaluating the effectiveness of the use of public funds are also closely related, since each criterion and each indicator must be compared with the actual data obtained during the performance audit. Moreover, if the criteria and indicators are chosen correctly, then they, being a fairly effective tool for assessing the effectiveness of the use of public funds, facilitate the direct implementation of a control measure, if not, they can significantly complicate the work of specialists conducting performance audits.
The correct definition of the scope of the performance audit will make it possible to form such a composition of specialists that will optimally distribute the upcoming work between them in order to obtain such results that will contribute to the solution of the tasks set.
The result of the work on determining the scope of the performance audit is a specific list of issues that need to be considered during its implementation. Questions should be formulated in such a way that the answers to them fully disclose the objectives of the performance audit and contribute to its success. There should not be too many of them, so as not to disperse the efforts of specialists performing performance audit, but they should fully disclose the degree of achievement of the planned results.
When formulating performance audit questions, one should take into account their materiality, that is, the need to attract the attention of legislators and the public to them, as well as the ability of the control and accounting body conducting the performance audit to make the greatest contribution to their solution.
The scope of a performance audit also depends on the methods and techniques that will be used to collect evidence and evidence, as well as the conditions for access to data of the object of control and officials related to the purpose and subject of the performance audit. Ideally, access should be unhindered and unrestricted throughout the working day.
Approaches to the choice of methods and techniques for collecting evidence and evidence should be determined by the possibility of obtaining the best results during the performance audit at the lowest cost of conducting it, that is, the information collected should be result-oriented and be of some interest to legislative bodies.
Performance auditers should be aware of the following information regarding:
Regulatory legal acts regulating the activities of the performance audit object and relevant to achieving its goals;
Organizational structure of the object performance audit;
The working conditions of the performance audit facility and its key personnel;
Volumes budgetary and beyond budget funds and directions of their use;
Clients to whom the performance audited entity provides services;
Goals, objectives and expected results of the activity of the performance audit object;
Mechanism of accountability of the performance audit object;
Internal control systems;
The main risks faced in its activities by the object of the performance audit;
The deficiencies and gaps that have occurred in the activities of the object of the audit of the effectiveness of the deficiencies, the measures taken to eliminate them.
This information is necessary in order to clearly understand what methods and techniques for collecting evidence and evidence will be the most optimal in the direct audit of the effectiveness of the use of public funds.
The whole complexity of auditing the effectiveness of the use of public funds is manifested in the variety of methods and techniques for collecting factual data and evidence that can be applied during this control activity. Regardless of what is the subject of a performance audit (target program, line of action, system or control tool), the main focus should always be on obtaining planned results, and this is decisive when choosing the methods and techniques for collecting evidence and evidence.
The collection of factual data and evidence in the performance audit is carried out using a wide range methods and techniques for conducting it, namely: interviews, surveys, surveys, analysis, confirmations, analytical reviews, selective control, preparation of schemes for the sequence of collecting evidence and evidence. Professionals conducting a performance audit, depending on its goals, can also use various innovative techniques, for example, computer modeling.
The collection of factual data and evidence is carried out in accordance with common process implementation of an audit of the effectiveness of the use of public funds. The information collected must be complete and acceptable for assessing the activity of the control object based on the approved criteria and indicators. If it does not meet these requirements, additional data is collected. Ultimately, the totality of the chosen methods and techniques for collecting evidence and evidence should provide reliable and complete information, based on the analysis of which it will be possible to answer the question of what consequences or likely consequences may have the results of this performance audit.
It is quite possible that, based on the information collected and the evidence obtained, there is a review of the procedure for conducting a control activity, as the performance audit team encounters unforeseen difficulties regarding the quality of the information collected or access to the necessary information, which, ultimately , cannot provide a guarantee of a high quality audit of the effectiveness of the use of public funds.
The necessary evidence refers to the existing factors on the basis of which it is possible to draw conclusions that correspond to reality. Sufficient evidence refers to the amount of information needed to support a conclusion. It is very important that this information be relevant, that is, consistent with the content of the needs of the task being solved in terms of the subject matter of the performance audit and the period of time that it covers.
In order to obtain complete and comprehensive information and necessary and sufficient factual data, specialists performing performance audits carry out:
interviews with heads of structural subdivisions of the performance audit object;
analysis of annual reports on the activities of the performance audit object;
analysis of the obligations of the performance audit object related to the fulfillment of the tasks set and the achievement of specific results;
analysis of the relationship between the use of the resources allocated to the audit object and the results obtained;
study of issues related to possible risks as the likelihood of a negative impact on the activities of the audit object of the effectiveness of any event;
research on trends in public spending;
study of issues related to the use of the effectiveness of advanced technologies by the audit object;
studying the materials of previous control measures and the results of internal control.
Topic: Performance audit, its general content and various forms
1 Financial and performance audit.
2 Functions and objectives of performance audit.
3 Benefits of performance audit.
4 What is a performance audit?
5 Examples.
List of used literature
1. Ivanova E.I. Performance audit in a market economy: tutorial/ E.I. Ivanova, M.V. Melnik, V.I. Shleynikov; ed. S.I. Gaidarzhi. - M.: KNORUS, 2009. - 328s.
2. Ryabukhin S.N. Performance audit: textbook - M .: Publishing house "ATISO", 2009 - 602s.
Financial and performance audit
Performance audit is a type of financial control of economic and social results. The results are determined by conducting audits of budget execution at the objects of the control measure. The purpose of the performance audit is to determine the cost-effectiveness (savings based on the results achieved (Art. 34 of the budget code)) productivity (cost-benefit ratio, i.e. how much was spent per unit of result) and effectiveness (final social and economic effect).
Performance audit dates back to 1977, when the Congress international organization Supreme Audit Institutions adopted the Lima Declaration. This declaration defined the basic principles of internal and external financial control, where internal audit meant performance audit.
According to the Lima Declaration guidelines audit (The Lima Declaration of Guidelines on Auditing Precepts), the audit is "an integral part of the regulatory system, the purpose of which is to reveal deviations from accepted standards and violations of the principles of legality, efficiency and economy of spending material resources."
The priority development of performance audit in the system of state control is today a strategic task of the control bodies of Russia for the following reasons:
· need improving the effectiveness, efficiency and effectiveness of state financial control;
the need for significant improve performance executive bodies authorities and other organizations using state resources;
need enhance transparency activities of organizations using budget funds;
Prospects for the transition to performance-based budgeting.
Among the factors contributing to the emergence and rapid development of performance audit, one should primarily include the increase in the economic potential of society, in which the role of supreme financial control bodies and the effectiveness of their activities naturally increase. In addition, in developed countries, generally accepted norms for the preparation of a draft budget, its execution, as well as international standards financial reporting and auditing. The result of this is an increase in the degree of transparency and publicity of the budget process, which prevents abuses and violations in the spending of budget funds. At the same time, in foreign countries the functions of external control, carried out by independent and accountable only to the parliaments of their countries by the supreme financial control bodies, and internal control, acting within the executive branch through the system of the treasury and various control bodies of ministries and departments, are legally separated. As part of the reform of the budget system of Russia, performance audit is being introduced as a new form of state financial control, carried out by conducting audits of the activities of bodies state power, as well as other managers and recipients of public funds in order to determine the effectiveness of their use.
For organization effective methodology performance audit educational institutions it is necessary to consider the similarities and differences between financial and performance audits.
Financial resources are formed and used in accordance with legislative and other legal normative acts (law on the budget, budget list, Government resolutions, etc.). The formation of budgetary funds is carried out on the basis of tax legislation, and their spending is based on the indicators of the approved budget and for the established purposes. This aspect of the formation and use of public funds is reflected in accounting and financial reporting, the result of which should be the compliance of the movement of funds with legally established norms and regulations.
Verification of this compliance - the correctness and reliability of accounting and reporting, the legality and targeted nature of the formation and use of public funds, is carried out through a financial audit.
State funds are used to meet certain social needs (production and services), to carry out various functions of the state and solve socio-economic problems. This aspect of the movement of state financial resources is reflected in specific indicators of their use. The result of the use of public funds is the degree of achievement of the planned indicators, which characterizes the effectiveness of their use. Analysis of the degree of achievement of planned results, satisfaction of public needs in order to determine the effectiveness of the use of public funds is carried out through an audit of efficiency.
The presence of two groups of results of the use of financial resources, each of which has its own model of financial control, gives reason to consider financial audit and performance audit as different types of financial control.
If a financial audit is a type of financial control over the compliance of the formation and use of public funds with statutory norms and regulations in order to determine the correctness and reliability of their accounting and reporting, legality and targeted nature, then a performance audit is a type of financial control over the effectiveness of the formation and use of state financial resources in order to determine their economy, productivity and effectiveness.
Performance audit and financial audit, based on a number of general principles of financial control, have different content, which is due to the dual nature of the audited results of the use of public funds. This is what gives reason to consider performance audit and financial audit as different types of financial control.
Performance audit and financial audit, differing in the content of the financial control exercised by them as its different types, nevertheless, have a number of common characteristics inherent in financial control as such. Both of them are carried out in the form of follow-up control of the formation and use of public funds, which is aimed at identifying and eliminating existing problems and shortcomings - this is what is the nature of the audit itself.
In addition, the control activities carried out within the framework of these types of financial control are carried out with a certain degree of independence and impartiality.
When conducting both performance and financial audits, it is mandatory to prepare and submit a report on the results of an audit or inspection, and the conclusions and conclusions contained therein must be supported by appropriate audit evidence. There are significant differences between these types of financial control.
Performance auditing is a study of past events, but the problems it aims to address are current and future. This factor determines the special nature of the procedure for selecting topics and objects of audit, which consists in ranking them in order of priority, in contrast to the principle of regularity and frequency of audits inherent in financial audit.
Performance audit is a more flexible control system based on analytical procedures compared to financial audit. The INTOSAI Auditing Standards emphasize that “unlike financial audits, where requirements and expected results are quite specific, performance audits are broader and open to judgment and interpretation.”
First of all, a financial audit focuses on financial information, such as financial statements, while a performance audit focuses primarily on the analysis of activities, programs, and business operations.
In practice, it is possible to overlap the objectives of financial audit and performance audit. In such cases, the classification of a particular type of audit depends on its main purpose.
The conducted research allows us to conclude that financial audit and performance audit differ in the setting of tasks, subjects, as well as the presentation of their results in reports. The objectives of the financial audit in the state financial control are to determine the correctness of the maintenance, completeness of accounting and reliability of reporting, as well as the legality and targeted use of financial resources. The objectives of the performance audit are to determine the economy, efficiency and effectiveness of the use of public funds. Performance audits focus on evaluating various aspects of the results of the use of public funds.
If the subject of a financial audit is the results of the use of public funds, which characterize the legality of their use and are reflected in the relevant financial documents and reporting, then the subject of an efficiency audit is the results of the use of public funds to meet public needs.
Evaluation of the effectiveness of the use of financial resources is carried out on the basis of selected criteria, representing a kind of "standard", which must comply with the activities of the inspected objects in the process of using public funds.
There are also differences in the content of reports issued on the basis of the results of financial and performance audits. Conclusions and comments on the results of the financial audit should be presented, as a rule, in a short standardized form with the attachment of those financial documents on which they are based. At the same time, reports on the results of performance audits usually differ significantly from each other in the form and nature of the presentation of the material, and, as a rule, documents are not attached to them.
Reports on the results of a performance audit may contain debatable materials, since the conclusion about the effectiveness of the use of funds is more subjective than, for example, the conclusion about their intended use. It relies not so much on financial documents as on a body of evidence that characterizes the activities of the auditee in the use of financial resources that were collected during the performance audit.
A characteristic requirement for performance audit reports in comparison with financial audits is that they must be constructive, contain an assessment on specific issues of the activity of the audited object, leading to inefficient use of financial resources.
Conducted analysis common ground performance audit and financial audit, as well as the differences between them, gives reason to assert that today we should not be talking about replacing, adding one of them to the other, but about introducing a new type of state financial control in Russia. Moreover, the performance audit should not only complement the traditional financial audit, but fill the system of state financial control with new content.
Performance audit has now firmly taken its place in the system of state financial control in most foreign countries, but has not replaced financial audit.
There is a point of view that the conduct of any control activity must necessarily include two stages: a financial audit and only then a performance audit. There is an opinion that performance audit "includes financial audit, but also pays attention to less formal aspects related to the evaluation of results and performance." We believe that it is not at all necessary that the performance audit should be preceded by a financial audit. The INTOSAI Auditing Standards emphasize that “in practice, financial audit and performance audit often overlap and in such cases the classification of the type of audit depends on its main purpose.” and performance audit. Thus, the Office of the Chief Auditor of Canada has developed a methodology for conducting a comprehensive audit of the activities of ministries, departments and public corporations, including the simultaneous audit of reporting, compliance audit and verification of the effectiveness of spending public funds. We also adhere to this point of view. Due to the fact that at present, at the legislative level and in the domestic literature, the issues of conducting an audit of the activities of educational institutions, which would include both financial audit methods and performance audit methods, are practically not studied, an urgent task is to study the methodology and develop a methodology for auditing activities. educational institutions.
Checking the effectiveness of public spending on the implementation of a program may include, as its objectives, not only an assessment of the achieved results of program activities in comparison with planned ones, but also the determination of the correctness of maintaining and reliability of the corresponding financial statements. At the same time, the implementation of each of the specified audit objectives should be carried out on the basis of their respective methods for conducting a performance audit and an audit of reporting. On the contrary, a performance audit can be carried out in a “pure form”, when the inspectors, as a result of a preliminary study of the objects of verification, have formed a certain confidence that the budget funds are used in accordance with the law and their intended purpose, and the financial statements are kept correctly and are reliable. This confidence can also be based on the materials and results of financial audits at these facilities by internal control bodies or audit organizations.
In addition, it should be noted that the concept of "performance audit" is not only complex, but also quite "open", with the ability to evolve. The openness of this concept means that the system of elements included in it is not unchanged, but, on the contrary, allows for multivariance, various ways of establishing a connection between public spending, their efficiency, productivity and results that are significant for society. The scope of this type of audit is also quite open: from the audit of the effectiveness of the implementation of state, departmental (and in the commercial sector and private) programs to the audit of the effectiveness of the activities of public authorities, local government, as well as auditing the effectiveness of the activities of individual managers of budgetary funds, budget recipients (ministries, departments, budgetary institutions, state enterprises) and even managers commercial organizations. This applies, among other things, to state educational institutions, which belong to budget organizations, and to autonomous non-state educational institutions, which belong to commercial private organizations. Naturally, in every specific case their own peculiarities arise, which, however, do not change the essence of the matter.
Thus, based on the above analysis of the nature, content and place of performance audit in public financial control, the following should be noted: performance audit as a form of financial control over the formation and use of public funds is based on a number of basic principles and methods of implementation common to financial audit, inherent in financial control as such, therefore, when conducting an audit of the activities of educational institutions, it is necessary to apply a methodology that would include elements of both a financial audit and elements of a performance audit.
Specialization is inherent in modern Russian audit, despite the replacement of a series of previously issued certificates by a single professional certificate, giving the right to sign an audit report on the reporting of organizations in the banking, insurance, investment and exchange sectors. The specialization of auditors is determined both by industry specifics and the type of audited statements, for example, accounting (financial) statements prepared in accordance with Russian Accounting Standards (RAS) and consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS). Since the audit of both reports has its own characteristics, auditors, as a rule, specialize in any one type. The confirmation of the auditor's qualification in the field of knowledge of reporting prepared in accordance with IFRS in the professional community and in the labor market is considered to be the presence of ACCA certificates (Associatio№ of Chartered Certified Accou№ta№ts - Association of Chartered Certified Accountants). However, the absence of such certificates among Russian auditors does not at all mean a complete lack of knowledge in the field of IFRS, for example, verification of relevant knowledge is provided for in the exam program for obtaining a unified professional certificate of an auditor, and IFRS topics are provided for in professional development programs for auditors. However, specialization is determined not so much by knowledge as by practical experience.
Auditing organizations in Russia, if they provide services for the audit of financial statements prepared in accordance with IFRS, then not as a specialized sole activity, but along with services for the audit of financial statements drawn up in accordance with RAS. At the same time, in an audit organization, as a rule, various divisions or departments, which include relevant specialists, are engaged in auditing reports of each type. Consolidated financial statements include information on a group of companies, each of which prepares reports on a mandatory basis in accordance with RAS. The audit of the consolidated financial statements may be performed by the same audit organization that conducted the audit in the group companies in relation to the statements prepared in accordance with RAS, or may be performed by another audit organization.
Combining audits of the Russian financial statements of companies in the group and the consolidated financial statements of the same group is possible in two cases. In the first case, the audit and reporting prepared in accordance with RAS, and the consolidated financial statements prepared in accordance with IFRS, are performed by one audit organization. Such a process is not regulated by auditing standards and requires methodological elaboration; for such a case, the author proposes a model for combining audits.
In the second case, the auditor of the consolidated financial statements and the auditor of the financial statements prepared in accordance with RAS represent different audit organizations, and the first auditor uses the work of the second, thereby optimizing the process of collecting audit evidence. The interaction of auditors in the second case will be carried out in the manner prescribed by special auditing standards.
Conducting audits in both the first and second cases seems to be more effective than involving a separate audit organization for each type of financial statements. The issues of assessing the effectiveness of an audit in the case of combining audits of two types of reporting performed by one audit organization are considered in this article.
The effectiveness of any action or action program is characterized by a system of quantitative and qualitative indicators that reflect the ratio of costs and results, the achievement of goals, in connection with this, this concept in economics is complex. The theory of economic efficiency analysis uses the categories of economic effect and economic efficiency, while the economic effect is understood as characterizing the result of completed operations, absolute indicator, and economic efficiency is considered a relative indicator that measures the economic effect with the resources (costs) used to achieve it.
Auditing by its definition is a commercial activity and pursues the goal of making a profit. Each audit (execution of a separate contract, project, task) from the position of an audit firm is aimed at making a profit, and the assessment of the economic efficiency of a separate audit is of great analytical importance for managing the effectiveness of an audit organization as a whole.
The issues of audit effectiveness have been repeatedly raised and studied and do not lose their relevance. With regard to the definition and evaluation of the effectiveness of the audit, there is no single proposed approach. For example, systems approach to assess the effectiveness of audit activities proposed by O.S. Sukharev. The functional purpose of the assessment of audit activity, according to O.S. Sukharev, "is to evaluate the past, predict the future, motivate and reward employees, etc." At the same time, when choosing a criterion for the effectiveness of auditing, it is necessary to "integrate both financial and non-financial indicators", "the basis of evaluation criteria ... it is advisable to carry out in the context of the macro-, meso- and micro-levels of the systems under study" .
According to N.D. Brovkina, since audit is one of the types of financial control, the principle of efficiency and cost-effectiveness of financial control costs is applicable to it, which means that "when implementing control measures, management bodies and regulatory bodies should proceed from the need to achieve the goals set using the least amount of funds or achieve the best result using a certain amount of funds".
In the dissertation research N.V. Astrakhantsev "Improving the Efficiency and Quality of Auditing Services in Russia" (Moscow, 2007), efficiency is determined through the maximum possible indicators of the profitability of the main activity, the profitability of services related to the audit, productivity with minimal time costs (cost). It is also proposed to use the traditional system of economic indicators to evaluate the effectiveness. It should be noted that N.V. Astrakhantsev, personnel, knowledge and customers act, which emphasizes the intellectual basis of auditing.
Analyzing the methodological aspect of the audit strategy, M.A. Azarskaya notes that "the choice of procedures for obtaining evidence and their correlation in the auditing process is an important methodological task that ensures the effectiveness of verification and the quality of the audit" (dissertation research for the degree of Doctor of Economics "Theory and Methodology of Ensuring Audit Quality", Yoshkar-Ola, 2009, p. 250).
The analysis of the increase in the cost of audit evidence obtained was investigated by A. Ahrens and J. Lobbeck, while the following sequence was formed depending on the increase in the cost of procedures:
Analytical procedures;
Procedures for familiarization with the system of on-farm control of the client;
- "substantive tests of operations (their verification on the merits)";
- "checks of individual elements of the balance" .
Audit planning is usually carried out in such a way as to reduce the need to test individual elements of the balance as the most time-consuming and expensive procedures. A. Ahrens and J. Lobbek analyzed the dependence of the cost of an audit on the effectiveness of the internal control system, while it was noted that the more effective the client's system is, the less costly methods of obtaining sufficient audit evidence. The auditor "does extensive testing of control points and relies heavily on the client's internal control system to reduce substantive testing."
Otherwise, when the auditor cannot rely on the internal control system (ICS) of the client, he applies large quantity tests of transactions on the merits and elements of the balance, which significantly increases the cost of the audit. However, the auditor cannot influence the client's ICS, which indicates the importance of procedures for testing the client's ICS in order to determine and use the possibility of reducing the cost of obtaining audit evidence and, accordingly, reducing the cost of the audit.
To assess the effectiveness of the audit service M.A. Azarskaya also suggests using traditional approaches using indicators of profitability, profitability of the service and maintaining relationships with the client on a long-term basis (ibid., p. 280). We can agree that if the results of the audit turned out to be really useful for the client interested in identifying and correcting errors, as a result of which the contract with the auditor was extended for the next periods, then such an audit for the audit organization will be considered effective. In a highly competitive environment, maintaining relationships with a client is an additional positive effect of the service rendered for the audit organization, however, the very fact of non-renewal of the audit contract for the next year cannot be considered as a negative effect (for example, in a situation of tender placement of a state order).
In our opinion, when evaluating the effectiveness of an audit, it will be appropriate to use standard methods used in economic analysis. An integrated approach to the analysis of the activities of an enterprise, formulated by J. Richard, is quite applicable to this situation. "An enterprise must operate efficiently: be profitable, increase productivity and increase revenues and profitability" . The main performance indicator can be recognized as the profitability of an audit as the ratio of the financial result (the difference between income and expenses under the contract) to the revenue under the contract. It is advisable to calculate costs taking into account not only direct costs, but as part of general business costs attributable to this project, distributed proportionally wages main production staff(auditors).
Important indicators will be labor productivity, defined as the ratio of revenue under the contract to the cost of remuneration of the main production personnel (auditors) employed on the project, and the indicator of labor intensity. As J. Richard noted, "the main difficulty in connection with this indicator arises from taking into account the qualifications of the labor force," since "in practice, working hours are weighted depending on the salary scale that exists at the enterprise," and "this method is often criticized because for differences in types of remuneration".
The factor influencing the effectiveness of the audit, which determines the optimal planning of the timing and scope of the audit, knowledge and correct application of audit standards, ensuring that sufficient appropriate audit evidence is obtained at the lowest cost, is defined by us as the human factor.
As noted by A. Ahrens, to ensure the quality and effectiveness of the audit, "it is very important to select the right personnel to perform audit duties" . Thus, the importance of continuity and knowledge of the client's business is emphasized.
The next factor influencing the effectiveness of the audit is the organizational and managerial factor associated with planning the workload for staff, timely staffing, availability of technical, software and information resources, etc. Organizational and managerial factor, according to M.A. Azarskaya (ibid., p. 280), includes:
Methodological support (internal standards, methods, templates);
Personnel policy (provision with professional staff);
Coordination of contractual terms on the cost, scope and timing of the audit;
Relations with representatives of the client's accounting service.
Cooperation (interaction) can also be recognized as a factor that makes it possible to increase the effectiveness of the audit by eliminating duplication in the work of auditors, since specialization is effective until there is duplication of functions. For example, in the case when two auditors from different companies are invited to audit reporting under RAS and reporting under IFRS, in fact, there is a situation of conducting a separate audit for users of each type of reporting, which indicates its inefficiency primarily for the direct client, as well as for the audit as a process as a whole.
In this regard, R.P. Bulyga notes that "it is more efficient for one auditor to perform an audit and give an opinion on which all users can rely than for each user to conduct his own audit" . Cooperation (interaction) between auditors - employees of different departments of the same audit organization, when the procedure for such cooperation is determined by internal standards, as well as between different audit organizations in the manner determined by the current auditing standards, avoids such inefficiency.
Interaction during the audit occurs not only between auditors, but also between the auditor and the client. If we consider an audit as a process of collecting, processing, summarizing and analyzing information, then it is necessary to single out a communicative factor that affects the effectiveness of the audit. Communication during the audit can be external to the audit organization and internal and, as a rule, is carried out as follows:
Between the audit organization and the client, at least at the stage of concluding an audit contract, as well as by sending a letter of commitment and at the final stage of the audit, when presenting the results in the form of written information to the client's management and the auditor's report. M.V. Melnik gives forms of clarification of the management of the audited entity and the stages at which clarifications can be obtained;
Between the audit team and the audited entity by sending audit requests (conducting surveys) and receiving responses to requests (during the survey), submitting documents;
Between members of the audit team in the process of coordinating the work of the group in order to implement the audit plan and program, when deciding difficult questions, training, performance by the head of the supervisory function;
Between the audit team and the methodologist, lawyers, the person appointed to conduct the review, the partner in the course of the necessary consultations on complex issues, the implementation of control functions.
It should be noted that external communication is more formalized and standardized and is carried out in accordance with auditing standards, while internal communication will be regulated by the internal documents of the audit organization, taking into account the size, specifics of the activity and scale of the audit organization.
The effectiveness of the audit will be facilitated by effective communication, both internal and external. Effective communication, in our opinion, can be recognized as such a flow of information that is simultaneously expressed in a form understandable to the opponent, sent in a timely manner, while the subsequent response is complete, reliable (falsification is excluded) and timely. In other circumstances, communication may be recognized as ineffective, which, as a rule, entails subsequent duplicative actions that increase the time spent by the audit organization's personnel on conducting an audit, and in some cases, ineffective external communication can be qualified as an audit limitation.
The factors for increasing the effectiveness of the audit should be recognized as the analysis and identification of on-farm reserves, which are hidden primarily in the elimination of losses and waste of resources. S.B. Barngolts and M.V. Melnik attributed to such costs "loss of working time, time spent on the production of defective and low-quality products ...". Such products in the audit can be considered the auditor's opinion on the reliability of financial statements, which does not correspond to the actual state of affairs, i.e. does not correspond to the obtained audit evidence or is based on improper and (or) insufficient audit evidence.
Since the audit is carried out, as a rule, by a group of auditors (specialists), the concept of marriage and poor quality products can also be applied to the result of the work of each member of the working group. For example, marriage should be considered a violation of documentation requirements, the formation of an opinion on the reliability of the audited area of accounting and reporting without actually performing the audit procedures provided for in the audit program. Poor quality requires re-checking the work done, finalizing the working documentation and the audit report (written information), which entails an increase in costs and time for the execution of the contract.
At the same time, the general rule given by O.S. Sukharev, according to which "the efficiency of the company directly depends on the efficiency of contract management, which, in turn, is directly dependent on the execution time" . At the same time, "violation of temporary agreements is perceived as a violation of the contract, and a delay in the execution of the contract leads to a sharp increase in costs and a decrease in the profitability of the contract" . M.A. Azarskaya, listing the characteristics of an audit service, also mentions, first of all, the terms, and then "labor intensity, costs for the provision of services, compliance with other conditions of the contract" (ibid., p. 280).
The effectiveness of the audit is closely related to the concept of "audit quality". The table proposes a number of indicators that take into account the factors that, in our opinion, are the most important, which affect both the effectiveness and the quality of the audit.
| Factor | Defining coefficients |
| Human factor (professional competence, motives and needs) |
Company loyalty coefficient, equal to the ratio of the number of group members with more than 3 years of experience in this audit organization to the total number of group members. The coefficient of professionalism, equal to the ratio of the number of certified auditors to the total number of group members. The coefficient of satisfaction of the needs of employees, equal to the ratio of the number of group members who positively assess satisfaction from working in an audit organization, to the total number of members of the working group |
| Audit standardization | Methodological support ratio equal to the ratio of the number of regulations, methods, and regulations developed and actually applied by the audit organization to the total number of current federal standards and rules (including ethical ones) |
| Specialization |
The coefficient of understanding of the client's field of activity, equal to the ratio of the number of members of the working group with experience in auditing other clients in the same industry to the total number of members of the group. Workgroup renewal ratio, equal to the ratio of the number of employees participating in the audit of a given client repeatedly to total number group members |
| Internal quality control system |
Evaluation of effectiveness is carried out by the audit organization independently in the course of monitoring the quality control system. The assessment is given based on the results of the external quality control of audit activities |
| Selection and correlation of procedures for obtaining audit evidence | The audit evidence economy ratio, defined as the ratio of the amount of audit evidence obtained as a result of performing analytical procedures to the total amount of audit evidence obtained during the execution of this project |
| Cooperation and communication (interaction) between auditors, as well as between the audit team and the client |
Claims and complaints ratio, equal to the ratio of the number of claims and complaints presented to the audit organization by the client during the implementation of a specific project, to the total number of claims and complaints for the calendar year. The coefficient of duplication of requests, equal to the ratio of the number of requests sent to the client repeatedly to the total number of requests for this project. The audit limitation ratio, equal to the number of requests that have not received adequate responses from the client's management or individual services of the client, taking into account the index of the importance of such requests for the formation of the auditor's opinion, to the total number of requests sent for this project. The ratio of the reduction in the number of procedures, equal to the ratio of the number of audit procedures, the results of which were obtained during the audit of financial statements in accordance with RAS (otherwise - IFRS) and used for the audit of financial statements in accordance with IFRS (otherwise - RAS), to the total number of audit procedures performed, assigned for audit of financial statements under IFRS (otherwise - RAS) |
| Continuing professional training | Knowledge renewal coefficient equal to the ratio of hours of additional vocational training, including self-study, to the total number of hours of compulsory advanced training for a calendar year |
| Organizational and managerial factor | The efficiency ratio of the personnel service, equal to the ratio of the number of newly hired employees for a certain time period, who have successfully worked in the organization for more than 6 months, to the total number of employees hired at the same time |
| Technical support of auditors |
The frequency of updating the technical base. Frequency of updating information and consulting databases. The coefficient of audit automation, equal to the ratio of the number of documenting operations carried out during the implementation of the project using special software products developed for audit companies, to the total number of operations carried out in order to document this project |
| Compliance with contractual terms | Contractual deadline compliance ratio, equal to the ratio of projects for which the deadlines are violated due to the fault of the audit organization, to the total number of projects for the calendar year |
| Absence of unproductive costs (marriage) | Completion ratio equal to the ratio of the working time spent on finalizing the working documentation (auditor's report) to the total number of man-hours spent on the project |
In the course of performing audit procedures, auditors obtain audit evidence on which to base the auditor's opinion. An audit of consolidated financial statements requires you to approach the study of the group as if it were a single company. At the same time, the subject of the auditor’s research is the same areas of reporting as in the audit of the Russian statements of companies included in the group, with the exception of additional emerging areas related to transformation and consolidation and due to the peculiarities of the methodology and technology for preparing consolidated statements. Thus, the subject matter is duplicated, as are the audit procedures, the process of documenting them, and the audit evidence collected.
In case of overlapping audits of the Russian statements of the companies belonging to the group and the consolidated financial statements of the same group, duplication of audit procedures is eliminated to the extent that the audit evidence collected during the audit of the Russian statements will be appropriate for the purposes of the audit of the consolidated financial statements.
Intra-company analysis of the effectiveness of audits should be carried out using the following performance indicators:
Profitability of the project (the ratio of the financial result to the total cost of the project - P):
Productivity of the personnel (the ratio of the price of the contract to the cost of labor for the project - P);
Labor intensity of the project (the ratio of labor costs for the project to the price of the contract - T).
The project performance indicator is defined as the average value of the performance indicators involved in the calculation, according to the proposed formula.
For the purposes of the analysis, it is important to compare individual projects of both the current and previous years with each other. Having determined the average actual performance indicator (P, P, T) of the previous year, calculated for all projects of the previous year, it can be taken as the planned one for the current year. The analysis can also be carried out in respect of audit projects for the same client completed over a number of years, for which the actual indicator for the project completed in the previous year for the same client will not be used . When conducting an analysis in relation to dynamic changes in the project performance indicator, it is necessary to make an adjustment for the inflation index in the current year.
We believe that a certain indicator of the project's effectiveness must be adjusted for the quality and efficiency coefficient, which is defined as the arithmetic average of the coefficients taken into account according to the following formula.
Such an adjustment makes it possible to take into account quality indicators along with indicators of the economic efficiency of the project.
The overall indicator of the quality and effectiveness of the audit (EIC) is proposed to be determined by the following formula: .
The effect of combining ESP audits in this case will be determined as the deviation of the efficiency and quality indicator of the audit of the combined project from the total planned indicator of efficiency and quality, which can be taken as the average efficiency and quality indicator for projects completed in the previous year: .
It is assumed that by reducing the cost of audit procedures for the audit of consolidated financial statements, the effect of combining audits will be higher than the target. Analysis of the effectiveness and quality of individual audits allows you to identify the internal reserves of the audit organization to optimize the ratio of these important categories.
Bibliography
1. Arens A., Lobbek J. Audit / Per. from English; ch. ed. a series of prof. I'M IN. Sokolov. M.: Finance and statistics, 2001. 560 p.
2. Audit: Textbook / Ed. M.V. Miller. Moscow: Economist, 2005. 282 p.
3. Barngolts S.B., Melnik M.V. Methodology economic analysis activities of an economic entity: Proc. allowance. M.: Finance and statistics, 2003. 240 p.
4. Brovkina N.D. Fundamentals of financial control: Proc. allowance / Ed. M.V. Miller. M.: Master, 2011.384 p.
5. Bulyga R.P. Fundamentals of Audit / Ed. e. n., prof. R.P. Bulygi. Rostov n / D .: Phoenix, 2010. 317 p.
6. Richard J. Audit and analysis economic activity enterprises / Per. from French; ed. L.P. White. M.: Audit; UNITI, 1997. 375 p.
7. Sukharev O.S. Theory of economic efficiency. M.: Finance and statistics, 2009. 368 p.
Performance audit
Performance audit is a type of financial control of economic and social outcomes. The results are determined by conducting audits of budget execution at the objects of the control measure. The purpose of the performance audit is to determine the economy (savings based on the results achieved (Art. 34 of the budget code)) productivity (cost-benefit ratio, i.e. how much was spent per unit of result) and effectiveness (final socio-economic effect).
Performance audit dates back to 1977, when the Lima Declaration was adopted at the Congress of the International Organization of Supreme Audit Institutions. This declaration defined the basic principles of internal and external financial control, where internal audit meant performance audit.
According to The Lima Declaration of Guidelines on Auditing Precepts, auditing is “an integral part of the regulatory system, the purpose of which is to uncover deviations from accepted standards and violations of the principles of legality, efficiency and economy of expenditure of material resources.”
The priority development of performance audit in the system of state control is today a strategic task of the control bodies of Russia for the following reasons:
- need improving the effectiveness, efficiency and effectiveness of state financial control;
- the need for significant improving the activities of executive authorities and other organizations using state resources;
- need enhance transparency activities of organizations using budget funds;
- prospects for transition to performance budgeting .
Financial audit and performance audit.
Among the factors contributing to the emergence and rapid development of performance audit, one should first of all include an increase in the economic potential of society, in which the role of higher bodies naturally increases. financial control and the effectiveness of their activities. In addition, in developed countries, generally accepted norms for the preparation of a draft budget, its execution, as well as international financial reporting standards and audit. The result of this is an increase in the degree of transparency and publicity budget process which prevents abuses and violations in the spending of budgetary funds. At the same time, in foreign countries, the functions of external control carried out by independent and accountable only to the parliaments of their countries by the supreme financial control bodies are legally delineated, and internal control operating within the executive branch through the system of the treasury and various control bodies of ministries and departments. As part of the reform of the Russian budget system, performance audit is being introduced as a new form of state financial control, carried out by conducting audits of the activities of public authorities, as well as other managers and recipients of public funds in order to determine the effectiveness of their use. An analysis of the main characteristics of financial and performance audits allows us to identify the advantages of the latter:
| State financial control | Financial audit | Performance audit |
|---|---|---|
| Control system | Dominated by external control over the activities of ministries | Dominated by internal control over the activities of ministries |
| Purpose of control | Target (by type of expenditure) use of budgetary funds | Achievement of planned results, their correct measurement |
| Main objects of external control | Expenditure | Socio-economic impact and total costs, quality of the internal control system |
| Budget execution | Actual costs vs. approved | Emphasis on achieving socio-economic results, reasons for deviations |
Functions and objectives of performance audit.
According to the auditing standards adopted by the International Organization of Supreme Audit Institutions (INTOSAI), performance auditing includes:
- economy audit(English) economy) administrative activities for ensuring the program is in line with sound administrative principles and practices;
- performance audit(English) efficiency) the use of human, financial and other resources, including the verification of information systems, systems of performance measurement and monitoring indicators, as well as procedures for elimination of detected inconsistencies and shortcomings;
- performance audit(English) effectiveness) activities in terms of achieving the specified goals by the audited program, as well as auditing the impact, that is comparison of the actual impact of a program or policy with the planned.
The INTOSAI standards of the Lima Declaration of Control Guidelines recommend that performance auditing be used in parallel with traditional control of the intended use of public funds, evaluating the final results of public spending. Performance audit is designed to improve the qualitative characteristics of the process of functioning of the state and municipal sectors of the economy and, as a form of financial control, is aimed at creating mechanisms for assessing the effectiveness of managing financial flows in the economy of the public sector. Thus, the main performance audit functions are:
- control(checking the activity of controlled objects),
- analytical(search and determination of cause-and-effect relationships of the work of executive authorities and its results)
- synthetic(formation, determination of recommendations to improve the efficiency of the object of control).
Basic goal performance audit can be considered a quality improving the process of managing public resources by providing complete, reliable and objective information about the effectiveness of the functioning of organizations involved in the budget process.
Benefits of Performance Auditing.
The benefits of a performance audit include:
- expansion of the boundaries of financial control beyond the limits of formal assessments of the distribution of resources to the improvement of the economic objects of their development;
- a comprehensive analysis of the reasons for the inefficient use of budgetary funds in the context of their recipients;
- creation of conditions for combating corruption in government bodies by providing information on the use of budgetary funds;
- providing legislatures the power of the opportunity to assess the effectiveness of decision-making on the regulation of the budget process;
- providing executive authorities with information and recommendations to improve the efficiency of resource use;
- influence on the development of strategic decisions in the field of financial policy.
What is a performance audit?
It is important not only to formulate expected results and develop programs aimed at achieving them, but also to regularly monitor the extent to which they are actually achieved. In addition to assessing the objectives of the policy and its practical results, performance audit should also include an analysis of the information underlying the adoption of certain decisions. Thus, the purpose of a performance audit is not to substantiate the correctness of spending budgetary funds, but to assessment of the effectiveness of expenditures made on the basis of reporting data after the implementation of the program financing. Performance audit allows you to:
- identify and eliminate program deficiencies(if program managers notice the low utilization of program resources in a timely manner, this will allow distribution of financial resources allocated for program implementation is most productive: to reconsider excessive requirements for participation in the program, to make sure that potential recipients are aware of the possibility of receiving services, etc.).
- motivate staff(Data on the work and needs of the staff, which gives a performance audit, allows you to set realistic goals for the staff and allocate responsibility for the results obtained).
- determine the most efficient use of resources(The simplest performance indicators (KPI) can be obtained by comparing the resources spent ( cash, personnel, equipment, etc.) with the products or results obtained (number of customers served, length of roads repaired). At the same time, you may find that some areas of work are very expensive, but give little positive results, while in another area much less money is spent, but it is in great demand among program recipients).
- build confidence in the program(Stakeholders can judge how successfully the program is achieving its stated goals and how the allocated resources are being spent based on the results of the performance audit. Success in achieving the goals set can gain support for the implementation of plans for the future).
Case-study: the role of performance audit in the evaluation of experiments in Russian education.
The results of the performance audit can be considered on the example of experiments conducted in 2000-2001 on the assessment of students' knowledge in the form unified state exam (USE) and the transition to financing educational institutions of higher professional education using state nominal financial obligations (GIFO). As a result of the performance audit, it was revealed that the financing of the activities of the "Modernization Russian education for the period up to 2010” was carried out mainly at the expense of the Federal Program for the Development of Education (FED), without making changes to it through federal laws and at the expense of other targeted programs. Based on the results of the audit of the effectiveness of the use of public funds for the development of education in terms of conducting the exam the following conclusions were made:
- The funds of the federal budget, aimed at conducting an experiment on the introduction of the Unified State Examination, are diverted from the activities of the FPRO, approved by the Federal Law.
- During the control measures, the opinion of the rectors was also taken into account Russian universities. Most of them believe that the assessment of students' knowledge in the form of the Unified State Examination can be used only as an alternative form of exams and also subject to its legislative registration.
- In order to conduct a qualitative result of the experiment, its implementation should not be accelerated, but for at least 10-15 years. In Russia, the experiment on the introduction of the Unified State Examination in 2001-2003 was accompanied by an accelerated rate of involvement in it of ever new subjects of the Russian Federation, schools and institutions of vocational education.
The table shows the dynamics of the experiment on the introduction of the USE in Russia:
At the same time, the conduct of any experiment provides for the development of its content on an experimental basis in order to test the hypotheses put forward, and only after conducting detailed analysis The results of the experiment can be considered the question of its dissemination.
- Work on the introduction of the USE went beyond the scope of the experiment due to the lack of an effective tool for assessing the effectiveness of experimental work.
One of the main activities of the FPRO was to study the possibility and conduct, on an experimental basis, the introduction of a state (social) educational loan into the education system. But during the performance audit, it was found that, in violation of federal law who approved the FPRO, a completely different event is being held in the field of education. This is an experiment on the transition to financing higher professional education using GIFO based on the results obtained during the experiment on the introduction of the Unified State Examination. GIFO is a certificate of the results of a single state exam with an appropriate entry certifying the category of financial obligation, which is the basis for providing the university with budgetary funds for the education of this citizen. The definition of GIFO is enshrined in the Decree of the Government of the Russian Federation dated January 14, 2002 No. 6 “On holding in 2002-2003. experiment on the transition to the financing of individual institutions of higher professional education using state nominal financial obligations. The procedure outlined in this document actually establishes a new mechanism for obtaining free and partially free education. But it is not provided for in the current federal legislation. In the experiment on the transition to funding using GIFO in 2002-2003. Six universities from three constituent entities of the Russian Federation took part. Since the financial content of the GIFO is directly determined by the results of the points obtained when passing exams in the form of the Unified State Examination, the GIFO experiment is carried out in conjunction with the USE experiment. And the more points the applicant has on the results of such exams, the higher the GIFO category. The GIFO values depending on the categories for 2002 were approved by the order of the Russian Ministry of Education. However, for 2003 these standards were changed. Thus, the financial resources of the university for second-year students enrolled under the GIFO system in 2002 were already established in new volumes, which actually negates the very idea of the experiment. According to the methodology for calculating the amount of financial obligation (GIFO), the student pays the difference between the cost of education and the amount of the financial obligation calculated based on the results of the USE, with the assignment of the GIFO category. It was planned that if a student of the school passed the exam and received points corresponding to the 1st category, then education at the university would be free for him. For categories 2–5, part of the money for education will come from the budget, and the difference in price will have to be paid extra. So, for example, the financial support of the 2nd category in 2002 was 7.5 thousand rubles. The experiment in three republics turned out to be costly, far exceeding the estimate. So, in 2003, the exams were taken quite well in these regions: 39% received the GIFO of the highest (1st and 2nd) categories, and 45% - the third. However, the Ministry of Education of Russia changed the size of the GIFO values:
| GIFO categories | 2002 | 2003 |
|---|---|---|
| 1 | 14,5 | 17,5 |
| 2 | 7,5 | 12,2 |
| 3 | 3,9 | 8,0 |
| 4 | 2,8 | - |
| 5 | 1,2 | - |
And taking into account the amendments to Chapter 25 of the Tax Code of the Russian Federation, as a result of which universities have lost benefits, the price of education has doubled, and for some specialties even tripled. During the audit, it was found that almost all students enrolled in the university must make an additional payment. The weighted average value of GIFO, calculated for the most massive first three categories, does not exceed 7.5 thousand rubles. Whereas the lowest real cost of education in the audited universities amounted to 15.4 thousand rubles. per year, the highest - 22 thousand rubles. (depending on the specialty). The graduates of schools in the regions where the GIFO experiment was conducted had no choice - they were forced to accept the conditions of the experiment. There are a number of problems with the implementation of the GIFO:
- it will be necessary to make changes to the current procedure for budget financing and Article 158 of the Budget Code of the Russian Federation in terms of transferring funds from the main manager to the recipient, giving the university the right to independently draw up and approve an estimate of income and expenses;
- the proposed pooling of budgetary and non-budgetary funds as university income, as well as spending funds (not all, but only received through the GIFO system) from a single account leads to a mixing of funds, which is contrary to the Civil and Tax Codes of the Russian Federation;
- when pooling funds, an unsolvable situation arises in accounting for the remuneration of teaching staff from the budget and extra-budgetary sources and dividing it into rates, which complicates accounting and statistical reporting;
- it is impossible to carry out separate accounting of GIFO funds and the amounts of additional payments made by students, as well as control over their use for their intended purpose - the principle of transparency and reliability of budget expenditures is violated.
The end result of the experiment on the introduction of state nominal financial obligations is the diversion of budget funds from students enrolled in a university free of charge and a reduction in the number of such students. Thus, when conducting an audit of the effectiveness of the use of budget funds in the implementation of federal target programs and state programs adopted by decrees of the Government of the Russian Federation, their effectiveness is considered through:
- assessment of the correctness and acceptability of the final goals of the program;
- determining the level of finding the program in terms of the final desired result;
- evaluation of its effectiveness as a whole or its individual components;
- identifying factors hindering the normal implementation of the program;
- evaluation of the activities of the management to determine the possibilities for the implementation of the program and the achievement of the desired result, that is, the use of rational methods for solving the problems provided for by the program, minimizing the means to achieve them;
- determination of the moments of duplication, or coincidence (full, partial) of the checked program with other programs related to it;
- identification of directions and measures that can improve the work on the implementation of the program;
- determining whether this program complies with applicable regulatory, legal and other legislative acts;
- establishing the reliability of the reporting on the progress of the program.
Literature
- L. Karjakina. Comparative analysis of performance audit methods in foreign countries
- Romanova T.F. Karepina A.I. Performance audit budget spending// Financial research. No. 9. 2004.
- Audit of the effectiveness of the use of public resources - a modern form of financial control
- Saunin A.N. Performance audit in public financial control. Financial control. 2004.
Wikimedia Foundation. 2010 .
See what "Performance Audit" is in other dictionaries:
Financial vocabulary
Audit- (from English audit check of accounting books< лат. audīre слушать; расследовать) независимая проверка (экспертиза) финансовой отчетности и финансового положения организации, проводимая аудиторами. Зародившись как финансовый аудит (далее А.), в …
Occupational health and safety management system audit- independent verification of the situation with labor protection in the organization and determination of the compliance of activities aimed at ensuring labor safety, laws and other regulatory legal acts containing state regulatory requirements from ... Russian encyclopedia of labor protection
An information security audit is a systemic process of obtaining objective qualitative and quantitative assessments of the current state of a company's information security in accordance with certain criteria and security indicators ... ... Wikipedia
audit- A systematic, independent and documented process for obtaining audit evidence and objectively evaluating it to determine the extent to which audit criteria have been met. Internal audits, sometimes referred to as "first party audits"...
- (audit) Checking the annual accounts of the organization. External audit (external audit) is carried out by a qualified accountant auditor (accountant) in order to get an idea of the reliability of the reports. Company laws require... Glossary of business terms
performance audit- Inspection to assess the productivity and efficiency of business operations. Wed c Compliance Audit. Topics accounting EN performance audit … Technical Translator's Handbook
Examination of the state of affairs in terms of personnel management, including a system of measures for collecting information, analyzing it, and evaluating, on this basis, the effectiveness of the organization's activities, assessing the conformity of the structural and personnel potential ... ... Glossary of business terms
value of money audit- Studies of the effectiveness of the use of resources by an organization whose main goal is not profit. They may not have owners, a large number of tasks and a clear criterion for success. Topics… … Technical Translator's Handbook More
Auditors must serve the business. In this regard, professional auditors should regularly analyze how the services they offer and provide meet the expectations of consumers, i.e. organizations using their services. If auditors do not bring benefits, they become a burden, an unnecessary burden.
The effectiveness of audit work is one of the most important and, at the same time, complex issues of the researched problem. The complexity of solving the problem of the effectiveness of auditing lies, first of all, in the definition and correlation of such concepts as "efficiency", "effect", "optimum" and their place in the audit.
The effectiveness of the auditor's work is the degree of his adaptability to solving a certain problem in certain conditions, that is, his ability to perform a certain task.
The effect of an audit is the result of an audit under certain conditions that users of financial statements receive.
The audit is carried out in the interests of the Users of financial statements * and the level of its effectiveness depends on the organizers of its implementation, their security and preparedness, as a result, these are the expected circumstances.
The effectiveness of the auditor's work determines the effectiveness of audit activities, which is expressed by the degree of its profitability. Auditing is a business activity, because its purpose is to make a profit.
The effect of audit activity should be considered at two levels:
At the macro level - at the state level;
At the micro level - at the level of an individual user.
In public economic life there are cases when the effectiveness of the audit is significant, but there is no effect. It is because of this that one should pay attention not only to the effectiveness, but also to the effect of the audit.
The effectiveness of audit activity is necessary for the owner or head of an audit firm in order to know whether the audit firm is operating effectively, whether it is profitable, profitable, and to provide financial incentives for employees, set prices for services, and predict the subsequent development of the audit firm.
In order to correctly determine the effectiveness of audit work, it is necessary to dwell in more detail on the task assigned to the audit apparatus for the rapid and high-quality implementation of the audit and identify deviations in reporting that is subject to disclosure, determine the criteria by which the work of auditors should be evaluated. Unfortunately, the current legislation of Ukraine does not clearly define the content of the auditor's work, and in theory and practice this issue is interpreted differently.
The efficiency of the company's functioning largely depends on the prospects for its development. Therefore, strategic goals are developed and the task, strategy and tactics for achieving them are determined.
The audit system can be considered effective for the company only when it ensures the achievement of the set targets at the lowest cost. The criteria for the effectiveness of the audit are factors that are designed to determine the extent to which the objectives have been achieved.
The performance criteria that are accepted for calculations are indicators, according to the numerical value of which, during the audit, conclusions can be drawn about the degree of achievement of the tasks set. These criteria are units of measurement of the degree of achievement of the result of the activity of an audit firm. To use them, it is necessary to have a well-developed methodology.
Only knowing the numerical value of the criterion is not enough to draw a conclusion about the achievement of the task (general or partial). It is necessary to determine the norms (pre-established values of the criterion), which make it possible to draw a certain conclusion. At the same time, the system of criteria should be unified, that is, the indicators that are included in it, in terms of content and mathematical expression, should not contradict each other. They should be interconnected in such a way as to serve as outputs relative to more general criteria.
Increasing the effectiveness of the audit is based on compliance with the basic requirements for it. These requirements include:
1) cost-effectiveness - achieved largely due to its simplicity. The simpler and more accessible techniques and methods are used during the implementation of the audit, the higher its efficiency. The economic principle "minimum costs -" maximum result "can be represented in different forms. It can be measured and judged on the degree of implementation of this principle using indicators of productivity, profitability and profitability;
2) productivity - is a quantitative indicator and is determined by the ratio of the cost of services to the cost of resources used. This indicator is used in the study of labor processes to justify the effectiveness of rationalization measures;
3) profitability - is the ratio of income to expenses or result to expenses. This indicator is used to justify the effectiveness of rationalization measures that are associated with investments. Increasing profitability is the result of increased productivity;
4) profitability - the ratio of profit received from audit services to the cost of resources used, as well as to share capital - is calculated analytically for each audited enterprise or annually (including taxation);
5) payback - is calculated as the ratio of the amount of invested funds aimed at the provision of audit services to the amount of actual cash receipts. If the payback period is greater than one, then the provision of the service may be rejected as not bringing additional income to the auditor.
Evaluation of the effectiveness of the audit should identify:
The ability to perform an audit using existing experience and conditions that have developed in society, the company, the environment;
The level of readiness of the personnel of the audit firm for the audit and planning for its preparation;
Availability of resources in the audit firm for the provision of audit services, the possibility of their assessment, forecasting the development of the situation;
A holistic system of factors that increase the effectiveness of the audit and their purposeful consideration in the strategic and tactical management of an audit firm.
There are a number of factors that inevitably limit the effectiveness of the audit. These factors include:
1. Limited awareness of the audit organization about the activities of the economic entity within the framework of research, the costs of which must be kept within economically acceptable limits;
2. The presence in the audit work of an inevitable element of subjectivity in the process of making decisions by the auditor based on his professional judgments, in particular when determining the types, scope and schedule of audit procedures;
3. Application during the audit of a selective approach to the implementation of the audit due to the irrationality of its conduct in a continuous manner;
4. The use by the audit firm of audit evidence, which by its nature is a combination of facts and opinions, as the basis for drawing conclusions and conclusions; (For example, an audit firm can use the results of the work of an involved expert (appraiser, engineer, etc.), who provides in his opinion both objective data on the studies carried out and his own opinions and conclusions.);
5. Exposure of accounting and internal control systems of an economic entity to inherent flaws;
6. The absence of insurmountable obstacles to fraudulent conspiracy to distort information;
7. The presence of uncertainty associated with the interpretation and evaluation of certain events of economic life, as well as other circumstances that make it impossible to apply exclusively objective criteria both to the preparation of financial statements and to the assessment of their reliability.
The above factors limit (by the level of acceptable, and not absolute assurance) the provision by the audit organization of guarantees that there are no other (not discovered during the audit) circumstances that affect or may affect the financial statements of an economic entity. During the audit, due to objective and subjective reasons, it is impossible to exclude the possibility that distortions in the financial statements of an economic entity that reduce the effectiveness of the audit may go unnoticed.
The effectiveness and effect of an audit largely depend on the level of qualification of auditors, who must have good theoretical training, significant practical experience, deep life knowledge, and be able to navigate in the most difficult situations. Accounting knowledge alone is not enough for a modern auditor. In addition, he must have special knowledge, which includes knowledge of the theory of control and industry audit, theory and industry audit, theory and industry accounting, activity analysis.
The key to the successful solution of the tasks that are set for the audit firm is the organization of a stable highly qualified team of specialists. At present, as practice shows, the selection and training of personnel for audit activities, strengthening this type of work with qualified personnel is an urgent problem. Today, it is allowed to hire persons without special economic education to the positions of auditors, the staff turnover is quite large.
Auditors must understand the theory and practice of management, master at least the simplest statistical methods, competently analyze documentation at the stage of preparation for the audit, and in addition, have serious psychological preparation. Such training of auditors will require, first of all, additional time. It's worth spending. The matter is that the auditor checks which are carried out in the pipeline mode, are senseless and formal. The additional time spent preparing for the audit will be fully paid off with reliable results, valuable suggestions for improving the activities of the enterprise and the formation of respect for the personality of the auditor and his work.
The training of auditors must be carried out on a different basis: from the student's bench, future auditors must master the profession. Future auditors need to be trained not for one narrow industry (for example, for trade, industry, construction), but as generalists who know the general techniques and methods of control and audit work, its features and specifics in industry, agriculture, transport, consumer services etc.
If we consider the effectiveness of a mandatory audit in relation to the customer, then in most cases it is unprofitable. Since the purpose of the auditor is to confirm the reliability of the financial statements, and not to facilitate the activities of the customer. Practical experience has shown that for a number of enterprises the auditors issued positive opinions (where it was noted that the enterprises were operating normally), but they went bankrupt.
The customer spends funds on the audit, but does not receive any proposals, except for the audit report for users. Therefore, the obvious conclusion is that enterprises do not receive any efficiency from a mandatory audit. Such audit reports are not needed by the enterprise.
And what prevents certification bodies from communicating with their clients during the intervals between audits and audits, informing them about changes in the regulatory and legislative framework of the economy?
The time spent together by auditors and auditees, as a rule, is no more than two to four weeks a year. After the next audit, all its participants are happy to forget about each other. Such a density of communication does not contribute to the establishment and strengthening of fruitful relationships between auditors and auditees. Frequent rotation of auditors also reduces the efficiency of audits.
Auditors cannot remain aloof from the activities of the enterprise and must understand that their work is viewed precisely through the prism of obtaining benefits by the organization, whose management will use the reports provided for subsequent analysis of the system. The results of the audit can and should be used as recommendations for improving processes and the entire system as a whole. In this case, we are talking about the effective use of:
The entire potential of the auditor as a specialist with rich experience and qualities inherent in his profession;
Resources (financial, time) spent on the audit;
Opportunities of own personnel of the enterprise.
Questions for self-control:
What is the information provided as a result of the audit?
Who is the management of the entity being audited?
Name the representatives of the owner of the audited entity?
What does the auditor rely on when identifying appropriate recipients of information?
What aspects regarding information can be disclosed in the contract for the provision of audit services?
What does ISA 260, Communication of Aspects of the Audit to Those Equipped with Governance, Govern?
Please provide an indicative list of aspects that the auditor communicates to appropriate recipients?
What should the auditor communicate to recipients?
When should information be communicated to recipients?
In what form is the information obtained during the audit communicated to the recipient?
How is verbal information presented?
When is it appropriate for the auditor to obtain written confirmation from the owner's representatives based on oral information?
What factors influence how information is presented to the right recipient?
What is a preliminary discussion of the auditor with the management of the audited entity on audit issues?
What are the concerns regarding the confidentiality of information?
How is the effect different from audit effectiveness?
Expand the essence of the effect of auditing.
What determines the effectiveness of the auditor?
What are audit performance criteria?
What are the criteria for evaluating the effectiveness of the audit.
What factors inevitably limit the effectiveness of an audit?
List the factors that affect the effectiveness of the audit.
What are the requirements for increasing the effectiveness of the audit?
What is performance in auditing?
What is the difference between performance and audit yield?
Describe the payback period of audit services.
What questions should be investigated in evaluating the effectiveness of the audit?
How does the level of qualification of auditors affect the effectiveness and effect of the audit?
Why is the effectiveness of mandatory audit in relation to the customer in most cases unprofitable?
What negatively affects the effectiveness of the audit?
Literature: