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Principles
- Audit findings should be set out in a clear and logical framework so as to allow for an easy understanding of audit criteria applied, facts established by the
[link title="evidence" link="%2Faware%2FGAP%2FPages%2FAudit-evidence.aspx" /]
, and the analysis by the audit team of the nature, significance, and causes of the problem or the better-than-expected performance. The impact in terms of economy, efficiency and effectiveness must also be considered, as this provides the basis to demonstrate the need for [link title="corrective%20action" link="%2Faware%2FGAP%2FPages%2FRecommendations.aspx" /]
.
- Audit findings should be formulated in a constructive and balanced way.
- Deriving audit findings involves combining the results from different audit procedures and weighing up arguments, including those
[link title="provided%20by%20the%20auditee" link="%2Faware%2FPA%2FPages%2FExamination%2FClearing.aspx%23Auditee's-reply" /]
.
Definition
Audit findings are the specific evidence gathered by the audit team to answer the audit questions and verify the stated hypothesis. They are the result of a comparison of the observed situation with the expected situation They should show that audit criteria are being met, partially met or that they are not being met. They consist of the following elements:
Instructions
The audit team uses the information gathered to make an objective assessment of actual performance against the audit criteria. Where performance does not meet the criteria, further investigation is needed to gain assurance that any resultant audit findings and conclusions are significant, fair and well-founded. Determining whether the deficiency is an isolated instance or represents a systematic problem may require gathering additional evidence.
The team must assess the degree of confidence in the audit finding, based upon the strength of the evidence. The assessment must be clearly reflected in the wording of the finding, with qualifying words (e.g. generally, frequently) used.
The team needs to determine auditee management's awareness of the issue; if management is aware of the problem and already taking corrective action, this needs to be recorded and taken into consideration for reporting purposes. Discussing the matter with auditee management may be necessary so as to determine whether the problem can be addressed by the auditee or is outside its control.
The team needs to identify the cause of the deficiency and assess its potential effect. In many cases, the effect of a finding may be quantifiable, e.g. expensive inputs or processes, unproductive facilities, time delays. However, qualitative effects, as evidenced in a lack of control, poor decisions or a lack of concern for service, will also be significant and need to be considered.
Performance audits should focus on providing a balanced view of the topic, presenting not only deficiencies but also, when appropriate, positive findings and indications of good practice or corrective action already taken.
Active dialogue should be maintained with the auditee and potential audit findings discussed as and when they arise to take into account different arguments and perspectives. Constructive discussion of initial findings with the auditee helps to establish the quantity and quality of evidence.
The findings are communicated to the auditee, whose written response is required, providing confirmation that the facts and findings are accurate or indicating reasons for disagreement. The auditee’s reply may well provide additional audit evidence that was not available to or understood by the audit team when it initially formulated the finding.
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