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Nama: Adhi Pramudita


: F1314001

Akuntansi (Transfer) A
Managing The Performance Audit Unit And Its Work
Functions of management : a conceptual framework
1. Planning consists of setting objectives and determining the course to achieve
2. Organization is how resources are allocated to accomplish organizational
3. Direction is guiding, supervising and teaching subordinates to ensure that
they understand the objectives they are to accomplish them, and their
individual roles in accomplishing these objectives.
4. Controlling is closing the loop between the plan and the product.
Management By Objectives (MBO)
The methodology proposed for use in managing performance auditing is
management by objectives (MBO), which coordinates the functions of management
to achieve results. MBO is a widely accepted technique used to promote
organizational or project effectiveness. MBO consists of the following series of
actions, performed in chronological order :
a. Set Objectives. Define the purpose of the enterprise, and determine what this
means in terms of specific programs and their desired results.
b. Plan to achieve objectives. Set a course of action to accomplish desired
c. Execute the plan. Explain the plan to the staff.
d. Evaluate results and take action to correct weaknesses. Examine the work
product. Determine if objectives were achieved and if they were achieved
efficiently and effectively.
Performance Audit Work Management
Using MBO as a management system for the performance audit function, the
balance of this chapter will be divided into two types of management activities :
1. Organizational and planning issues concerning overall management of the
unit such as :
a. Defining the organizations purpose.
b. Setting organizational goals and objectives.
c. Preparing an annual audit work plan.
2. Management functions dealing with specific management of audits include :
a. Audit planning
b. Organization of audit work.

c. Directing and controlling the audit.


Management activities therefore should center on accomplishing the major
purpose of the organization-reporting on efficient, economical and effective use of
public resources in compliance with adopted rules and law. There are two
approaches that may be used, separately or together, to reach this end :
a. During the course of audit work or as a result of a special assignment,
provide information to agency management relevant to pending decisions.
b. Report agency activities after they occur, identifying areas that may be
operated more efficiently and effectively.
Supporting objectivies are manageable, discrete statements pertaining to
achieveable ends. They are developed to further elaborate the function of the
organizational unit. Objectives associated with the performance audit function
might be :


maintain open communication with legislative and administrative leaders.

maintain organizational integrity and credibility.
adhere to performance audit industry standards.
prepare a long and a short-term schedule of audits.
improve the quality of analytic work performed by staff members.
prepare a report on each completed audit.
establish a carrer development program for professional staff.

Criteria used to develop annual audit work program include :

1. Availability of skills and personnel.
2. Critical nature of audit need on agency-by-agency basis.
3. Need for audit as expressed by top-level administrative and legislative
4. Time elapsed since agency last was audited.
In developing an annual audit work program, the following questins will need to be
addressed :

What departments, agencies and programs are candidates for audit?

How much time (in terms of work weeks) should be devoted to specific
What mix of personnel best would perform specific audits?
Which audit elements and components should be applied to auditing specific

This analysis should result in preparation of a draft of the annual work program
to include a general estimate of available audit staff time. Care should be exercised

to assure the estimate is reasonable. In developing these estimates, it is important

to cinsider the following :

Paid leave.
Set aside some training time for each auditor.
Remember administrative time.
Set aside some time for miscellaneous fire fighting projects.
Remember that part-time and seasonal positions.

This information will be used to compile a proposed annual audit program consisting
of :
a. An introduction, describing the audit process and the methods used to
develop the proposed annual program.
b. A list of continuing audits in progress.
c. A list of the audits proposed for engagement during the year, including scope
and preliminary objectives, in priority order as assigned by the auditor.
d. Audits not recommended for engagement, although rated as high priorities
by the auditor.
1. Tean Leader
Responsible for planning, directing, organizing and controlling the audit.
Assigns objectives to auditors, reviews all completed work, coordinates final
2. Auditor
Responsible for planning and carrying out audit work on assigned objectives
ad tasks. Assigns tasks to audit assistants. Prepares findings related to
assigned objectives. Prepares related workpapers.
3. Audit Assistant
Carries out tasks assigned by auditors. Prepares related workpapers.
Planning Objectives
Planning objectives, by their very nature, can be predetermined and
standardized for every audit. They simply reflect the standards procedures of the
audit unit regarding required documents and the approval process.
Information Objectives
Information objectives are designed to lead the development of the
supportive data relevant to the audit scope. The key word for information objectives
is describe, as the purpose of the survey phase is to gather descriptive
Audit Planning
The two fundamental sources of information for developing an audit plan are :

1. The preliminary audit planning document.

2. Pre-audit survey documents.

Task-level Workpaper Review

The first level of quality control is the review of tasks level workpapers by the
auditor responsiblefor the relevant objective. Workpapers should be submitted
under the cover of the appropriate audit assignment sheet, which will provide the
basic criteria for review. The next step is to compare the workpapers with the
corresponding audit assignment shhets, considering the following questions :
1. Are all required workpaper sets present ?
2. Are the workpapers prepared according to specific instructions regarding
content and format?
3. Do the workpapers provide complete documentation of the work performed,
including a thorough description of the methods and procedures used as well
as the results of the work?
4. Are the methods and techniques used by the preparer consistent with the
special instructions on the audit assignment sheet?