Canadian Government Executive - Volume 23 - Issue 03

March/April 2017 // Canadian Government Executive / 19 Audit CommiƩed to Support the Strengthening of Performance Audit Capacity 3 Setting Overall Direction Set the Scope of the Plan Identify Criteria for Selecting Audits Identify Objectives Address Requirements Develop Audit Pr posals Identify Required Information Identify Responsibilities and Timing Choose Basis for Selecting Audits Develop a Multi-Year Audit Plan Analyze and Select Audits from Proposals Applying the Plan Report on Implementation and Outcomes Implement, Monitor and Adapt the Plan Communicate the Plan Internally and Externally Selecting Audits and Developing a Multi-Year Plan Identifying Potential Audits Phase I Phase II Phase III Phase IV Figure 1: The phases and steps of the audit selection and multi-year planning process that will guide the design of the plan- ning process. The organization will need to consider its mandate, applicable au- dit standards, the needs of the oversight body, and any objectives and priorities it may have set for itself. Critical decisions in this phase include: • How should oversight bodies’ needs in- fluence audit selection? The oversight body (e.g. Public Accounts Committee or Departmental Audit Committee) is one of the audit organization’s primary clients and plays an important role in fulfilling public sector accountability. The organization should understand the oversight body’s characteristics and needs, and then decide how to factor these into the plan, if at all. • Should certain priorities or themes be given preference in audit selection? The audit organization may establish focus areas, such as specific sectors of govern- ment, First Nations’ issues, public safety and security, government-wide (hori- zontal) initiatives. • Should audits be selected only where problems are suspected? The audit orga- nization may choose to audit only areas where performance problems are sus- pected or known to exist. Alternatively, it could audit areas that are deemed significant based on risk, whether or not there are indications of problems. • How should follow-ups of previous au- dits be incorporated? The organization will need to determine the right mix of new audits and follow-ups, so that suf- ficient attention is paid to unresolved issues it previously identified. • Should products and services other than audits be provided? The audit or- ganization may choose to offer a variety of products that will be covered by its selection process and multi-year plan, including non-audit products such as document review, analysis of perfor- mance data, or survey. In Phase 2 – Identifying Potential Audits – the audit organization determines how it will identify possible topics and assess these against selection criteria. The orga- nization should ask the following critical questions: • Which internal staff should be in- volved, and how? Different individu- als bring unique perspectives to audit selection, and involving staff can help create internal buy-in. Should all staff be engaged or just some? And what role do they play? • How should external stakeholders be engaged? The organization needs to de- termine which external stakeholders— oversight bodies, senior government offi- cials, employee associations, civil society organizations, the media, and academ- ics—it will consult and whether it will reach them through written communica- tions, direct contact, or a combination. • How to ensure enough of the right infor- mation is collected and analyzed to select audits? The audit organization should de- termine, in advance, what quantity and quality of information it will need to se- lect audits, without being excessive. In Phase 3 – Selecting Audits and Devel- oping a Multi-Year Audit Plan – attention turns to selecting among possible topics and developing the multi-year plan. Three critical questions are: • How will audit proposals be analyzed and chosen? • What is the right mix of audit topics, and how should they be timed and se- quenced for maximum effectiveness? • Will there be sufficient resources and ca- pacity to implement the plan? Finally, Phase 4 – Applying the Plan – involves communicating, implementing, monitoring, and adjusting the plan, with an accounting after the fact. The organization will need to make the following decisions: • What should be disclosed? The organi- zation will want to communicate the plan internally, and perhaps externally, to gain support for the plan and engage key stakeholders. The organization will need to decide what to communicate about the process and resulting plan, including how much detail to present about individual audits and the ratio- nale for their selection. • How should the plan be monitored and adapted? Properly implementing the plan can require making adjustments as events unfold, stakeholders’ interests change, and lessons are learned. • How will the effectiveness of audit se- lection and multi-year audit planning be reported on? To report meaning- fully on how well audit selection has worked, the organization might report on the relevance of the audits chosen or on the achievement of objectives, both those that governed the plan and over- all objectives for the performance audit practice. CCAF’s Approaches to Audit Selection and Multi-Year Planning discussion paper is available at www.ccaf-fcvi.com. J ohn R eed is President and CEO of CCAF-FCVI Inc.