Nama : Adhi Pramudita

NIM : 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 them.2. Organization is how resources are allocated to accomplish organizational purpose.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 objectives.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 organization’s 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 planningb. Organization of audit work.c. Directing and controlling the audit.

AUDIT UNIT MANAGEMENT

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 :

a. To maintain open communication with legislative and administrative leaders.b. To maintain organizational integrity and credibility.c. To adhere to performance audit industry standards.d. To prepare a long and a short-term schedule of audits.e. To improve the quality of analytic work performed by staff members.f. To prepare a report on each completed audit.g. To 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 personnel.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 audits?- What mix of personnel best would perform specific audits?- Which audit elements and components should be applied to auditing specific functions?

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.

MANAGEMENT OF SPECIFIC AUDITS

1. Tean LeaderResponsible for planning, directing, organizing and controlling the audit. Assigns objectives to auditors, reviews all completed work, coordinates final report.

2. AuditorResponsible 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 AssistantCarries 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 information.

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?