Chapter 6

Applying the Principles, Policies, and Practices of Program Auditing

1. Basic Principles of P-Auditing

In a P-audit, the auditor places primary emphasis on programs where opportunities for improvement
exist. The indication of significant ineffectiveness in the operation of a program is only one aspect of
that program.
The principles of P-auditing have been condensed into three :
a. The definition of auditing
b. Evidence and audit objectives
c. The phases of a program audit

2. Definition of P-Auditing
A P-audit is the planning for, the obtaining of, and the evaluation of sufficient relevant, material, and
competent evidence by an independent auditor on the objectives of whether an entity's management,
employees, or delegated agents have or have not accepted and carried out appropriate standards for
effectively achieving the result desired by the program's higher level authority.
This definition brings out three general attributes of P-Audit that do not necessarily apply to other types
of program analysis :
a. The auditor must be independent
b. The auditor must have standards to measure from, based on a statement of the end result ot
objectives of the program
c. The auditor must report in a third party.

3. Evidence and Audit Objectives

Audit evidence is the facts and information used to come to a conclusion on the audit objective. The
audit objective for a P-Audit is a statement or question proposing the answer to an audit inquery as to
the effectiveness of the outputs of the program fulfilling the program's desired results.
The audit objective is always composed of three essential element, yaitu :
a. The criteria
b. The causes
c. The effects

4. The phases of a P-audit

Each P-audit has four identifiable phases.
a. The preliminary survey
b. The review and testing of management control
c. The detailed examination
d. Report development
Because of the dimensions of many P-audits, some organizations require the auditors to prepare an
analysis of what they expect to find upon the conclusion of the review and testing of management
control phases.