Value-for-Money Audit Evidence.

• Author: Fernandes, Peter P.

Toronto, Ontario: The Canadian Institute of Chartered Accountants, 1992. (128 pp)

Reviewed by Peter P. Fernandes, chief corporate budget officer for the City of Edmonton, Alberta, and chairman of the Government Finance Officers Association CAnFR Certificate Program.

Fiscal realities of the past decade have forced public sector entities to look at ways to deliver "more for less." A number of professional bodies have been directing their efforts in developing and promoting value-for-money (VFM) concepts, necessary for evaluating performance and for establishing accountability. This research study, issued by the Public Sector Accounting and Audit Committee (PSAAC), has as its purpose the study of the concept of audit evidence and practice for obtaining and assessing it in value-for-money auditing.

The result of in-depth work on the topic of VFM audit philosophy and evidence conducted by a study group, the study is developed through an extensive literature review (Appendix A) and by obtaining input from practitioners through questionnaires and interviews (Appendices B and F). This book deals primarily with the concept of evidence and the specific application of evidence in value-for-money auditing. This thrust toward evidence as a necessary tool for VFM audit is seen in every chapter.

In chapter 1, the reader is introduced to the basic premise that evidence is the basis of auditing and that the theoretical framework of "evidence" must have practical application in VFM auditing. Chapter 2 familiarizes the reader with definitions used for the purpose of the study.

Chapter 3 takes the reader deeper into the concept of evidence and touches upon logic theory and the use of mathematical probability measures to support audit conclusions. Specifically, it attempts to compare the audit evidence required for financial statement audits and VFM audits. Some distinctions noted are the following: 1) VFM audits emphasize qualitative measures, resulting in a long-term report that is tailored to the particular circumstances of each audit; 2) standards in both cases refer to evidence obtained "to afford a reasonable basis to support the content of the auditor's report," but the "content of the report" is dissimilar in almost all respects; and 3) financial statement audits emphasize the requirement for quantitative evidence, while VFM audits require more qualitative...