Printer Friendly

Value-for-Money Audit Evidence.

Toronto, Ontario: The Canadian Institute of Chartered Accountants, 1992. (128 pp)

Reviewed by Peter P. Fernandes, chief corporate budget officer for the City of Edmonton, Alberta, and chairman of the Government Finance Officers Association CAnFR Certificate Program.

Fiscal realities of the past decade have forced public sector entities to look at ways to deliver "more for less." A number of professional bodies have been directing their efforts in developing and promoting value-for-money (VFM) concepts, necessary for evaluating performance and for establishing accountability. This research study, issued by the Public Sector Accounting and Audit Committee (PSAAC), has as its purpose the study of the concept of audit evidence and practice for obtaining and assessing it in value-for-money auditing.

The result of in-depth work on the topic of VFM audit philosophy and evidence conducted by a study group, the study is developed through an extensive literature review (Appendix A) and by obtaining input from practitioners through questionnaires and interviews (Appendices B and F). This book deals primarily with the concept of evidence and the specific application of evidence in value-for-money auditing. This thrust toward evidence as a necessary tool for VFM audit is seen in every chapter.

In chapter 1, the reader is introduced to the basic premise that evidence is the basis of auditing and that the theoretical framework of "evidence" must have practical application in VFM auditing. Chapter 2 familiarizes the reader with definitions used for the purpose of the study.

Chapter 3 takes the reader deeper into the concept of evidence and touches upon logic theory and the use of mathematical probability measures to support audit conclusions. Specifically, it attempts to compare the audit evidence required for financial statement audits and VFM audits. Some distinctions noted are the following: 1) VFM audits emphasize qualitative measures, resulting in a long-term report that is tailored to the particular circumstances of each audit; 2) standards in both cases refer to evidence obtained "to afford a reasonable basis to support the content of the auditor's report," but the "content of the report" is dissimilar in almost all respects; and 3) financial statement audits emphasize the requirement for quantitative evidence, while VFM audits require more qualitative evidence.

Chapter 4 narrows the definition of evidence for the purpose of VFM audits and elaborates on the type of evidence that can support an auditor's report--support the facts, the findings and the conclusions.

Chapter 5, "Sufficient and Appropriate Audit Evidence," provides the most practical aspects of this book. It provides a flow chart outlining the stages in the VFM audit process. The highlight of the book is the VFM audit evidence logic model presented here. This model provides the VFM auditor with a conceptual framework and techniques that can help to justify audit conclusions in a logical and reasoned manner.

Chapter 6 not only details the types of evidence, such as physical, documentary, oral and analytical, but also suggests ways of obtaining evidence.

Chapter 7 discusses the need to evaluate evidence for its relevance to objectives, scope and criteria set for the audit and should further expound on the requirement for different types of audit evidence in different VFM audit mandates.

How is the reader going to use the information from this authentic and scholarly work? In general, a finance professional would be interested in implementing VFM concepts. This book is not intended for that purpose, however; rather it equips the VFM auditor with the theoretical background required for conducting and defending the results of a VFM audit. Also, it helps the VFM auditor to fulfill accountability requirements that come with VFM audits.

This is an excellent "guidebook" for audit professionals (both in the U.S. and Canada), as it refers to procedures of collecting, verifying and presenting audit evidence. Academics and researchers are another group who would find this study extremely beneficial. The author and the CICA are to be commended for their contribution and research in enhancing the credibility of VFM auditing.

Value-for-Money Audit Evidence is available for $35 (Canadian) from the CICA, 150 Bloor Street West, Toronto, Ontario M5S 2Y2 (416/962-1242).
COPYRIGHT 1993 Government Finance Officers Association
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:Fernandes, Peter P.
Publication:Government Finance Review
Article Type:Book Review
Date:Feb 1, 1993
Previous Article:The Hidden Wealth of Cities: Policy and Productivity Methods for American Local Governments.
Next Article:Property taxation in British Columbia and the city of Vancouver: averaging and phasing options for land valuation.

Related Articles
New York clarifies privity requirements.
The implications of electronic evidence.
Achieving Accountability in Business and Government: Managing for Efficiency, Effectiveness, and Economy.
Auditing interpretations.
Helping the nation spend wisely.
Fraud risk assessment; building a fraud audit program.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters