The answer for CNO 599.2 is not correct. Question is about performance audit and answer is with respect to comprehensive audit. So, I guess CNO 599.2 should merge with CNO. 600
There are 2 types of questions related to Performance Audit
1st Factors to be considered in Performance Audit Planing Covered by Concept No 599.20
2nd Issues Addressed, Considered while doing Performance Audit Covered by Concept No 600.0
Correct Answer for 599.20 Factors to be considered in Performance Audit Planing
Right now given in 600.00
Factors to be considered while planning Performance Audit:
— Obtaining understanding of the program to be audited.
— Identify significant findings and recommendation from previous audits that could affect the current audit objectives
— Legal and regulatory requirements.
— Identifying the criteria needed to evaluate matters subject to audit.
— Significance and the needs of potential users of the audit report.
— Management controls.
— Potential sources of data that could be used as audit evidence and consider the validity and reliability of these data.
— Providing sufficient staff and other resources to do the audit.
— Preparing a written audit plan.
Correct Answer for 600 Issues Addressed, Considered while doing Performance Audit
There is controversy in this question — answer as per May 16 RTP / Nov 18 RTP / Nov 18 Exams all are little different, i think answer of Nov 18 RTP is best and recent, answer for Nov 18 Exams is too short Below is answer as per Nov 18 RTP
According to the guidelines issued by the C&AG, Performance Audits usually address the issues of:
(i) Economy- It is minimising the cost of resources used for an activity, having regard to appropriate quantity, quality and at the best price.
Judging economy implies forming an opinion on the resources (e.g. human, financial and material) deployed. This requires assessing whether the given resources have been used economically and acquired in due time, in appropriate quantity and quality
at the best price.
(ii) Efficiency- It is the input-output ratio. In the case of public spending, efficiency is achieved when the output is maximised at the minimum of inputs, or input is minimised for any given quantity and quality of output.
Auditing efficiency embraces aspects such as whether:
(a) sound procurement practices are followed;
(b) resources are properly protected and maintained;
(c) human, financial and other resources are efficiently used;
(d) optimum amount of resources (staff, equipment, and facilities) are used in producing or delivering the appropriate quantity and quality of goods or services in a timely manner;
(e) public sector programmes, entities and activities are efficiently managed, regulated, organised and executed;
(f) efficient operating procedures are used; and
(g) the objectives of public sector programmes are met cost-effectively.
(iii) Effectiveness- It is the extent to which objectives are achieved and the relationship between the intended impact and the actual impact of an activity.
In auditing effectiveness, performance audit may, for instance:
(a) assess whether the objectives of and the means provided (legal, financial, etc.) for a new or ongoing public sector programme are proper, consistent, suitable or relevant to the policy;
(b) determine the extent to which a program achieves a desired level of program results;
(c) assess and establish with evidence whether the observed direct or indirect social and economic impacts of a policy are due to the policy or to other causes;
(d) identify factors inhibiting satisfactory performance or goal-fulfilment;
(e) assess whether the programme complements, duplicates, overlaps or counteracts other related programmes;
(f) assess the effectiveness of the program and/or of individual program components;
(g) determine whether management has considered alternatives for carrying out the program that might yield desired results more effectively or at a lower cost;
(h) assess the adequacy of the management control system for measuring,monitoring and reporting a programme’s effectiveness;
(i) assess compliance with laws and regulations applicable to the program; and
(j) identify ways of making programmes work more effectively.