State Audit Methodology, Standards, and the Audit Process
This domain tests the standards and sequence that turn an audit mandate into a defensible conclusion, including how financial and performance audits differ.
Standards
- Kazakhstan’s supreme audit institution applies the ISSAI framework: founding principles, fundamental principles (ISSAI 100; financial 200, performance 300, compliance 400), and audit standards in the 2000, 3000, and 4000 series.
- State audit must follow standards approved within the state audit system, and the methodology must be documented.
Process
- Stages: preliminary study; planning (objectives, scope, criteria, risks, materiality, team, timetable); execution and evidence; reporting; follow-up.
- Financial audit gives an opinion on statements and compliance.
- Performance audit asks whether activities are economical, efficient, and effective; criteria may come from law, standards, benchmarks, or best practice.
Worked example
A performance audit asks: “Are road maintenance funds delivering the planned condition improvement?” Criteria are the national maintenance norms and the program target of 70% of roads in good condition. Evidence includes condition surveys, contract acceptance certificates, traffic data, and expenditure records. The finding is 60% achieved, caused by concentrating repairs on low-traffic roads, with the effect of an unmet target. The conclusion follows criteria and evidence, not merely spending irregularities.
Traps
- Starting fieldwork without written criteria.
- Importing a financial-audit “true and fair” opinion into a performance audit.
- Writing recommendations that do not address the cause.