The scope of
audit has been extended to cover efficiency, economy and effectiveness audit or
performance audit, or full scope audit.
Efficiency audit looks into whether the various schemes/projects are
executed and their operations conducted economically and whether they are
yielding the results expected of them, i.e., the relationship between goods and
services produced and resources used to produce them; and examination aimed to
find out the extent to which operations are carried out in an economical and
efficient manner.
Economy
audit looks into whether the entity has acquired the financial, human and
physical resources in an economical manner, and whether the sanctioning and
spending authorities have observed economy.
Effectiveness
audit is an appraisal of the performance of programmes, schemes, projects with
reference to the overall targeted objectives as well as efficiency of the means
adopted for the attainment of the objectives.
Efficiency-cum-performance audit, wherever used, is an objective
examination of the financial and operational performance of an organisation,
programme, authority or function and is oriented towards identifying
opportunities for greater economy and effectiveness.
The
procedure for conducting performance audit covers identification of topic,
preliminary study, planning and execution of audit, and reporting. Normally speaking, the performance audit is
conducted by the government in respect of various expenditure incurred. While the trend towards a comprehensive approach
for conducting performance of full scope audit is visible, the coverage and
depth of evaluation vary according to the statutory limitations, and the
organisational constraints of C & AG.
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