Chapter 7

Field Work - II

* Applying the Audit Techniques

*Organizational Audits (and Productivity Evalua
tions
*Management Studies and Consulting
* Program Audits
* Contract Audits
* Integrated Auditing
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* Consultants
* Outsourcing and Cosourcing
* Analytical Reviews
* Fixed Assets Maintenance
* Audit Evidence
*Field Work in a High Technonogy Environment
* Continuous Auditing
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 Chapter 7
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* Applying the Audit Techniques

Observing
Questioning

Analysing
Verifying
Investigating
Evaluating

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* Applying the Audit Techniques

Observing
An item of evidence found during an audit that relates to the
quality of the product, process, or quality system. Observations
may or may not require corrective action.

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* Applying the Audit Techniques

Questioning

Questioning techniques are a heavily used, and thus widely

researched, audit strategy. Research indicates that asking
questions is second only to auditing. Teachers typically spend
anywhere from 35 to 50 percent of their doing time asking
questions. But are these questions effective in raising information
achievement? How can auditors ask better questions of their
audit? How can current auditing research inform practice?

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* Applying the Audit Techniques

Analysing

1. to examine in detail in order to discover meaning, essential

features, etc.
2. to break down into components or essential features to
analyse a financial structure
3. to make a mathematical, chemical, grammatical, etc.,
analysis of
4. (Psychoanalysis) another word for

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* Applying the Audit Techniques

Verifying

1. To prove the truth of by presentation of evidence or testimony;

substantiate.
2. To determine or test the truth or accuracy of, as by comparison,
investigation, or reference: experiments that verified the
hypothesis.
Investigating

To observe or inquire into in detail; examine systematically.

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* Applying the Audit Techniques

Evaluating
Evaluation is a systematic determination of a subject's merit, worth
and significance, using criteria governed by a set of standards. It can
assist an organization to assess any aim, realisable concept or
proposal, or any alternative, to help in decision-making; or to ascertain
the degree of achievement or value in regard to the aim and objectives
and results of any such action that has been completed. (1) The primary
purpose of evaluation, in addition to gaining insight into prior or
existing initiatives, is to enable reflection and assist in the
identification of future change.(2)
Evaluation is often used to characterize and appraise subjects of
interest in a wide range of human enterprises, including the arts,
criminal justice, foundations, non-profit organizations, government,
health care and other human Tambun
services.
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*Organizational Audits (and Productivity Evalua-

tions
Management is responsible for establishing and maintaining a system
of internal controls within an organization. Internal controls are those
structures, activities, processes, and systems which help management
effectively mitigate the risks to an organization's achievement of
objectives. Management is charged with this responsibility on behalf of
the organization's stakeholders and is held accountable for this
responsibility by an oversight body (e.g. board of directors, audit
committee, elected representatives).
A dedicated, independent and effective internal audit activity assists
both management and the oversight body (e.g. the board, audit
committee) in fulfilling their responsibilities by bringing a systematic
disciplined approach to assessing the effectiveness of the design and
execution of the system of internal controls and risk management
processes. Tambun Hutabarat 9
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*Organizational Audits (and Productivity Evalua-

tions
The objective assessment of internal controls and risk management
processes by the internal audit activity provides management, the
oversight body, and external stakeholders with independent assurance
that the organization's risks have been appropriately mitigated.
Because internal auditors are experts in understanding organizational
risks and internal controls available to mitigate these risks, they assist
management in understanding these topics and provide
recommendations for improvements.

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*Management Studies and Consulting

Management consulting is the practice of helping organizations to

improve their performance, primarily through the analysis of existing
organizational problems and development of plans for improvement.
Organizations may draw upon the services of management
consultants for a number of reasons, including gaining external (and
presumably objective) advice and access to the consultants'
specialised expertise.
As a result of their exposure to and relationships with numerous
organizations, consulting firms are also said to be aware of industry "
best practices", although the transferability of such practices from
one organization to another may be limited by the specific nature of
situation under consideration.

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*Management Studies and Consulting

Consultancies may also provide organizational change management
assistance, development of coaching skills, technology
implementation, strategy development, or operational improvement
services. Management consultants often bring their own proprietary
methodologies or frameworks to guide the identification of problems,
and to serve as the basis for recommendations for more effective or
efficient ways of performing work tasks.

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* Programs Audits

Program audits include both economy and efficiency. Economy and

efficiency audits determine (1) whether the entity is acquiring,
protecting, and using its resources (such as personnel, property, and
space) economically and efficiently, (2) the causes of any
inefficiencies or uneconomical practices, and (3) whether the entity
has complied with laws and regulation on matters related to economy
and efficiency. Performance audits also include reviews of selected
programs and activities to evaluate their overall effectiveness in
achieving anticipated results. Program audits determine:

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* Programs Audits

the extent to which desired results or benefits established by the

legislation or other authorizing body are being achieved,
the effectiveness of organizations, programs, activities or functions,
and
whether the entity has complied with significant laws and regulations
applicable to the program.

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