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11010 Studies
Nov-2016

Overview

Studies are carried out on occasion by the Office. A decision to do a study may be made, for example, when the nature of the subject matter is not well understood or when there is an absence of suitable criteria for future audits, or both.

Unlike audits and reviews, studies are not assurance engagements. In assurance engagements, a practitioner expresses a conclusion in a report designed to enhance the degree of confidence of the intended users about the outcome of the assessment of a subject matter against criteria. In contrast, a study communicates the nature of the work carried out with respect to a subject matter and the factual results or observations from this work.

This section outlines both general requirements and requirements related to the planning, conduct, and reporting of studies.

CSAE 3001 Requirements

There is no CSAE 3001 requirement or related application material that applies directly to studies.

OAG Policy

All sections of the Direct Engagement Manual applicable to performance audits and the Office’s System of Quality Control shall apply to studies unless specified in the policies set out below. The terminology and language used in the Direct Engagement Manual shall be adapted to the context of a study.

General

The Canadian standard on assurance engagements set out by the Chartered Professional Accountants of Canada shall not be applied to studies (OAG Audit 1011).

Team members shall not be required to have an understanding of generally accepted auditing standards appropriate to their role on the team (OAG Audit 3065).

An engagement quality control review shall not be required for studies (OAG Audit 1081, OAG Audit 1163, and OAG Audit 3063).

Planning

  • The team shall determine the purpose, scope, and approach of the study, and shall provide to the Performance Audit Practice Oversight Committee, for approval, a proposal to carry out the study on the basis of its significance, planned value added, and interest to Parliament.

The team shall not be required to

Examination

The team shall obtain sufficient appropriate evidence to provide a basis to support the factual statements expressed in the report.

The team shall use the official OAG template for drafting the study report.

Reporting

The study report shall not include a conclusion (OAG Audit 7040).

The study report shall not include management recommendations (OAG Audit 8020). However, as indicated below, studies may inform a path forward—for example, by identifying good practices, expectations, or methods, or by drawing attention to areas of concern or leading thinking.

Studies and audits on the same subject matter shall not be combined in the same report unless approved by the Performance Audit Practice Oversight Committee.

OAG Guidance

Direct engagements and annual financial audits are the predominant forms of examination used by the Office to fulfill its legislative mandate. However, studies provide a form of inquiry that may be appropriate in some circumstances. Although studies are not assurance engagements, they are performed with the same degree of professionalism, quality, and rigour as other Office products. Teams therefore must apply systematic, disciplined, evidence-based approaches. Because readers of our reports may not make the distinction between an audit and a study, there is a risk that a study report may be misinterpreted. By applying most of the Direct Engagement Methodology to studies and the Office’s System of Quality Control, the Office reduces its reputational risk to an acceptable level.

Differences between an audit and a study

There are three main differences between an audit and a study:

  1. Purpose. In a direct assurance engagement, an audit objective and pre-established criteria guide an examination of management performance. Audit reports are intended to provide assurance on whether the underlying subject matter has been managed with due regard to aspects of economy, efficiency, effectiveness, and environmental effects. Audit reports provide findings relative to suitable criteria and a conclusion against a pre-established audit objective. By contrast, studies carried out by the Office do not involve an examination of, or assurance on, management performance.

    Studies carried out by the Office should have a well-defined purpose. Examples include

    • to describe a subject;
    • to develop an information base;
    • to develop a common understanding of a subject;
    • to identify lessons learned and good practices;
    • to draw attention to a certain area of concern or leading thinking; and
    • to identify expectations, methods, or criteria to use in future examinations.

    When determining whether a study should be carried out by the Office, consideration should be given to whether the Office will be recognized as a qualified or authoritative source of information on the subject matter; and whether the Office’s statutory rights of access to government information is important for the conduct of the study. If the answer to one or both of these questions is no, serious consideration should be given to engaging outside experts to carry out the study.

  2. Assessment. Because studies are not used to assess management performance, criteria are not needed to conduct a study.

  3. Reporting. Because studies carried out by the Office do not involve an assessment of, or assurance on, management performance, they do not include conclusions about management performance or recommendations to management. Also, studies do not necessarily include management’s comments.

    Except in rare circumstances, studies and audits concerning the same subject matter should not be combined in the same report, in order to reduce the risk that readers will not recognize their distinct purposes. A specific OAG report template has been established for studies.

Methods and tools to be used

Because Office policies related to the System of Quality Control and direct engagements also apply to studies, teams should use the audit working paper software to document their work, and adapt its content to the circumstances.

It is strongly recommended that teams make use of expert advisory committees. However, if the team believes that such a committee is not necessary, it needs to document the decision in the audit file.

Teams should develop a detailed study plan to guide the work and to ensure that the study remains within budget and timelines.

Teams are expected to substantiate the study report. Studies typically rely extensively on evidence obtained indirectly from other sources. For example, studies often refer to a compilation of third-party research papers or academic studies. Because this evidence is not used to support findings and conclusions about management performance, as would be the case in an audit, teams are not required to directly test the information to obtain assurance about its reliability, accuracy, or completeness.

However, to use the information or data source to support factual statements in the report, teams need to consider

  • whether the source of the information or data is reliable and reputable,
  • whether the information or data source is subject to quality assurance standards or controls,
  • the extent to which the source is widely used or cited, and
  • whether other information sources support the same factual statements.

Teams should apply citation rules for academic writing to identify the source, or sources, of information used in the study.