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2010 Project Management
Aug-2021

Overview

Performance audits and special examinations are considered to be projects with specific goals. Managing an audit as a project involves ensuring appropriate resources are available, breaking down the audit work into tasks, assigning these tasks to team members with clear timelines, and monitoring the work so that it is completed on time and within budget, while producing a high-quality audit report.

CSAE 3001 Requirements

44. The practitioner shall plan the engagement so that it will be performed in an effective manner, including setting the objective, scope, timing and direction of the engagement, and determining the nature, timing and extent of planned procedures that are required to be carried out in order to achieve the objectives of the practitioner. (Ref: Para. A2-A3, A85-A89)

CSAE 3001 Application Material

A85. Planning involves the engagement partner, other key members of the engagement team, and any key practitioner’s external experts developing an overall strategy for the scope, emphasis, timing and conduct of the engagement, and an engagement plan, consisting of a detailed approach for the nature, timing and extent of procedures to be performed, and the reasons for selecting them. Adequate planning helps to devote appropriate attention to important areas of the engagement, identify potential problems on a timely basis and properly organize and manage the engagement in order for it to be performed in an effective and efficient manner. Adequate planning also assists the practitioner to properly assign work to engagement team members, and facilitates the direction, supervision, and the review of their work. Further, it assists, where applicable, the coordination of work done by other practitioners and experts. The nature and extent of planning activities will vary with the engagement circumstances, for example the complexity of the underlying subject matter and criteria. Examples of the main matters that may be considered include:

  • The characteristics of the engagement that define its scope, including the terms of the engagement and the characteristics of the underlying subject matter and the criteria.

  • The expected timing and the nature of the communications required.

  • The results of engagement acceptance activities and, where applicable, whether knowledge gained on other engagements performed by the engagement partner for the appropriate party(ies) is relevant.

  • The engagement process.

  • The practitioner’s understanding of the appropriate party(ies) and its environment, including the risks of significant deviation.

  • Identification of intended users and their information needs, and consideration of significance and the components of engagement risk.

  • The extent to which the risk of fraud is relevant to the engagement.

  • The nature, timing, and extent of resources necessary to perform the engagement, such as personnel and expertise requirements, including the nature and extent of experts’ involvement.

  • The impact of the internal audit function on the engagement.

OAG Policy

Audits shall be completed in the required time frame, within budget, and in compliance with OAG policies and CPA Canada standards. [Apr-2015]

OAG Guidance

Performance audits

At the end of the audit selection phase (OAG Audit 1510 Selection of performance audit topics), the audit report submissions are discussed and approved and form the basis for conducting the audits that will be part of the report of the Auditor General or the Commissioner for the Environment and Sustainable Development. Each report submission includes the estimated total cost of the audit.

Tabling of the reports to Parliament are planned in advance and help determine the date when the audit projects should be completed.

Special examinations

A budget for a special examination is pre-approved, as part of the process of updating the 10-year special examination schedule done at least annually.

Special examination reports are submitted to the board of directors of the Crown corporation, according to a pre-determined special examination schedule. Reporting dates are established through careful consideration of the statutory date (each Crown corporation has to be examined at least once every 10 years) as well as the OAG’s available resources and in consultation with the board of directors. Each special examination report covers a range of systems and practices that have been selected for examination following a risk-assessment process performed at the planning phase of the audit.

Completing audits on time

To ensure that audits are performed in an effective manner and completed on time, the OAG establishes a timeline as guidance with interim deadlines to complete specific audit deliverables.

Performance audits

This timeline, referred to as the “T-minus” schedule, outlines the activities to be completed in order for the audits to be finalized and published in time for the tabling of the report to Parliament. T-minus dates refer to the number of weeks before tabling. The T-minus schedule is based on a typical audit. If teams are behind schedule, such as when the audit is started late, they should design the audit strategy to ensure they can complete the work to deliver the PX draft at the suggested T-minus date.

Deliverables for an audit are outlined in the performance audit “roadmap” (OAG Audit 101 Overview of Performance audits). Some of the most important dates are those that indicate when certain documents are sent to the entity being audited. These include the dates for sending

  • the audit plan summary, which includes the objectives and criteria of the audit—sent several weeks after the start of an audit (OAG Audit 4090 Audit plan summary for performance audits);

  • the principal’s draft, which is the first draft of the audit report sent to the entity—sent according to the suggested T-Minus date (OAG Audit 8019 Submitting the principal’s (PX) draft and transmission draft); and

  • the transmission draft, which is the near-final draft of the audit report sent to the deputy head of the entity—sent according to the suggested T-Minus date (OAG Audit 8019 Submitting the principal’s (PX) draft and transmission draft).

The T-minus schedule is available through a link on the Intranet’s Direct Engagement Product Tracking page. By entering the reporting date of their audit, teams should generate a T-minus schedule for their audits to be aware of the dates of upcoming deliverables.

A delay in meeting any of the key T-minus dates (especially in the Reporting Phase of the audit) has serious consequences for the remainder of the audit schedule. For example, a delay in sending the audit report for editing and translation could mean insufficient time for proper editorial review.

If tabling day is delayed because the House of Commons is not sitting—for example, if a general election has been called—the T-minus dates for audit reports to be included in the Auditor General’s report or the Commissioner for the Environment and Sustainable Development’s report do not change. The printed reports are locked up until the new tabling date.

Special examinations

This timeline, referred to as the “Key Dates for Special Examination Reports,” outlines the deliverables for a special examination. The most important dates are those that indicate when certain documents are sent to the entity being examined. These include the dates for sending

  • the special examination plan to management and the audit committee (OAG Audit 4100 Special examination plan);

  • the principal’s draft, which is the first draft of the special examination report sent to the management of the Crown corporation (OAG Audit 8019 Submitting the principal’s (PX) draft and transmission draft);

  • the transmission draft, which is the near-final draft of the special examination report sent to the audit committee (OAG Audit 8019 Submitting the principal’s (PX) draft and transmission draft); and

  • the final special examination report to the board of directors (OAG Audit 8095 Submitting the special examination report to the board of directors and making it public).

Audit teams must prepare a “Key Dates for Special Examination Reports” schedule to be aware of the dates of upcoming deliverables. To generate the schedule, engagement teams must discuss and agree upon timelines with Crown corporation officials.

Audit teams should be aware of the dates of upcoming deliverables and must allocate sufficient time to

Completing audits within budget

A global budgeted amount is included in the audit report submission for a performance audit or in the special examination schedule for a special examination. As well, each audit is allocated a certain number of hours and dollars.

Audit directors are accountable for allocating the budget for each of their audits. This is done by

  • identifying how many hours by fiscal year;
  • identifying main tasks that will need to be performed to complete the audit;
  • determining how many hours main tasks will take and who will complete the work;
  • determining travel costs for the audit; and
  • determining contract costs (e.g. consultants) for the audit.

The total of these costs determines the audit budget. Auditors who will work on the audit may have different degrees of availability, so it is important to map the hours required for the audit to the hours available.

Audit team members at all levels are expected to manage budgets with due diligence. This means that they should contribute to budget decisions and monitor audit projects using a no surprise approach.

The examination approval process (OAG Audit 4080 Examination approval) requires sign-offs to attest that the planning phase work has been completed and the budget is finalized.

Monitoring progress

Throughout the audit, the engagement leader monitors the use of resources against the budget to ensure that milestones are met and that any variances are noted and managed. The engagement leader may delegate some of these responsibilities to the director and other team members.

Audit team members must remain vigilant throughout the audit and continuously monitor work progress against the established plan and should react and adapt to situations that could arise. If the timing of any of the key milestones changes, the team needs to assess the possible impact on producing the final audit report.

Project management tools

The audit logic matrix and the associated audit programs that are developed are efficient tools used to manage audits and to help the audit team focus on what was decided during the audit’s planning phase.

The audit logic matrix is a planning tool that sets out the audit approach to be followed during the audit’s examination phase, and contributes to planning efficient and effective audits. This tool describes the logical relationship between the audit objective, criteria, audit approach, and findings that could emerge. It provides the audit questions to be answered, the evidence-gathering and analysis methods to be used, and any data limitations and potential messages for the intended users. For further information, see OAG Audit 4044 Developing the audit strategy: audit logic matrix.

Audit programs are directly linked to the audit logic matrix and contain detailed information about the audit work to be conducted. Audit programs provide detailed information in order for team members to understand what needs to be done during the audit’s examination phase, and contain an estimated budget and timeline to complete identified audit steps. Audit procedures may be documented in the ALM or in separate audit programs. For further information, see OAG Audit 4070 Audit programs.

Audit documentation and approvals

The OAG’s electronic audit working paper software provides detailed information on audit documentation that must be retained and approvals that must be obtained. Key documents and approvals include but are not limited to the following:

Key documents

  • each audit team member’s completed and signed Independence Confirmation form;

  • the audit logic matrix;

  • the audit plan summary or the special examination plan;

  • detailed audit programs specifying the work to be carried out and work completed;

  • the documentation showing the comments and advice from external advisers, Legal Services, internal specialists, the Auditor General, and the quality reviewer (if any); and the disposition of advice received (i.e., the decisions taken by the engagement leader, based on advice received);

  • the documentation showing entity management comments on the draft audit reports and how they have been addressed;

  • a list of hard copy controlled documents sent to the entity; and

  • letters related to the engagement and respective responses.

Key approvals

  • the approval of the audit (as appropriate),
  • examination approval,
  • report content approval, and
  • publication approval.

General project management considerations

Audits must be completed in compliance with OAG policies and CPA Canada standards (OAG Audit 1011 CPA standards in the context of a direct engagement and OAG Audit 1012 Audit quality, including roles and responsibilities for audit quality).

In addition to completing the audit on time and within budget, effective project management involves

  • allocating work to team members so that they are not underutilized or overloaded;

  • allocating work to team members to help them develop expertise, or to benefit from their expertise, as required;

  • motivating and coaching team members, and keeping them focused and aware of progress;

  • encouraging team members to bring concerns forward so that problems can be discussed and solved in a timely manner;

  • planning for contingencies so that if a step does not go as expected, there is an alternative plan;

  • being aware of potential bottlenecks in the audit process and planning for this; and

  • being aware of how decisions on one aspect of the audit could affect other aspects (e.g., taking more time on one audit step will reduce the time available for other steps).

Related Sections

OAG Audit 1011 CPA Standards in the context of a direct engagement
OAG Audit 1012 Audit quality, including roles and responsibilities for audit quality
OAG Audit 3062 Engagement leader responsibilities for audit quality
OAG Audit 3081 Consultations
OAG Audit 3082 Differences of opinion
OAG Audit 4080 Examination approval
OAG Audit 4090 Audit plan summary for performance audits
OAG Audit 4100 Special examination plan
OAG Audit 8019 Submitting the principal’s (PX) draft and transmission draft