Depending on the objectives of audit, we can classify audits by SAI India into:
- 1. Compliance audit
- 2. Financial Attest Audit
- 3. Performance Audit
Apart from these traditional audits, we also do audits of information technology and environment audits.
Compliance audit is sometimes called transaction audit in which some selected transactions of an entity for a particular financial year are chosen for audit scrutiny. An auditor doing compliance audit would examine what has been done/not done in a transaction against rule, sanction, provision and propriety. He checks whether a transaction:
- 1. Conforms to sanction/provision of funds
- 2. Adheres to all rules and regulations
- 3. Adheres to principles of financial propriety, which go beyond mere observation of rules.
Financial Attest Audit
Financial statements are prepared by undertakings run by various departments, statutory corporations, government companies and other autonomous bodies and authorities. We certify how far the accounts are “true and fair” i.e., whether the financial statements (accounts) are properly prepared, complete in all respects and are presented with adequate disclosures. In some cases, our financial audit is a “supplementary audit” with the primary auditor usually being a chartered accountant. We also audit and certify the annual accounts of the Central and State governments.
Performance audits seek to establish at what cost and to what degree the policies, programmes and projects are working. Performance audit, apart from asking whether things are being done in the right way, goes a step further and analyses whether the right things are being done. In addition to all the financial audit checks, the Performance Audit seeks to assess whether a programme, scheme or activity deploys sound means to achieve its intended socio-economic objectives.
Information Technology Audits
As computer technology has advanced, Government organisations have become increasingly dependent on computerised information systems to carry out their operations and to process, maintain, and report essential information. As a consequence, the reliability of computerised data and of the systems that process, maintain and report these data are a major concern to audit. IT Auditors evaluate the reliability of computer generated data supporting financial statements and analyse specific programs and their outcomes. In addition, IT Auditors examine the adequacy of controls in information systems and related operations to ensure system effectiveness. IT Audit is the process of collecting and evaluating evidence to determine whether a computer system has been designed to maintain data integrity, safeguard assets, allows organisational goals to be achieved effectively, and uses resources efficiently. SAI India has carried out more than 250 IT audits till now.
According to World Bank, environment audit is a methodical examination of environmental information about an organization, a facility or a site, to verify whether, or to what extent, they conform to specified audit criteria. The criteria may be based on local, national or global environmental standards. Thus, it is a systematic process of obtaining and evaluating information about environmental aspects. The International Organisation of Supreme Audit Institutions (INTOSAI) framework definition of environment auditing is:
- 1.Environment auditing is not significantly different from normal auditing as practiced by Supreme Audit Institutions (SAIs).
- 2.Environment auditing can encompass all types of audit, i.e., financial, compliance and performance audits. With respect to performance audits, the three E’s of Economy, Effectiveness, and Efficiency can be included. The adoption of the fourth E, that is ‘Environment’, depends on the SAI’s mandate and its government’s environmental policy, which is desirable but not critical, in carrying out environment audit.
- 3.The concept of sustainable development can be a part of the definition of environment audit, only if it is a part of the government policy and/or program to be audited.
SAI India has conducted more than 200 environment audits till now on issues relating to biodiversity, waste management, water pollution etc.