Accountability

GAO-03-673G Government Auditing Standards > Chapter 1 Introduction > Accountability

1.11 The concept of accountability for public resources is key in our nation’s governing processes. Legislators, other government officials, and the public want to know whether (1) government resources are managed properly and used in compliance with laws and regulations, (2) government programs are achieving their objectives and desired outcomes, and
(3) government services are being provided efficiently, economically, and effectively. Managers of these programs are accountable to legislative bodies and the public. Auditors of these programs, when they adhere to GAGAS, provide reports that enhance the credibility and reliability of the information that is reported by or obtained from officials of the audited entity.

1.12 Financial audits contribute to making governments more accountable for the use of public resources. The auditors, in providing an independent report on whether an entity’s financial information is presented fairly in accordance with recognized criteria, provide users with statements concerning the reliability of the information. Financial audits performed in accordance with GAGAS also provide information about internal control, compliance with laws and regulations, and provisions of contracts and grant agreements as they relate to financial transactions, systems, and processes.

1.13 Attestation engagements also contribute to governments’ accountability for the use of public resources and the delivery of services. In an attestation engagement, auditors issue an examination, a review, or an agreed-upon procedures report on a subject matter or on an assertion about a subject matter, based on or in conformity with criteria that is the responsibility of another party. Attestation engagements can cover a broad range of financial or nonfinancial objectives and provide various levels of assurance about the subject matter or assertion dependent upon the user’s needs.

1.14 Performance audits also contribute to governments’ accountability for the use of public resources and the delivery of services. The term performance audit is used to include a variety of objectives to meet users’ needs. Performance audits provide an independent assessment of the performance and management of government programs against objective criteria or an assessment of best practices and other information. Performance audits provide information to improve program operations, facilitate decision making by parties with responsibility to oversee or initiate corrective action, and contribute to public accountability. The term performance audit is used generically to include work classified by some audit organizations as program evaluations, program effectiveness and results audits, economy and efficiency audits, operational audits, and value-for-money audits.

1.15 Given the importance and complexity of government programs in providing a variety of public services, auditors are increasingly being called on by legislative bodies and government agencies to expand the variety of performance audits to include work that has a prospective focus or provides guidance, best practice information, or information on issues that affect multiple programs or entities already studied or under study by an audit organization. This work may also include an assessment of policy alternatives, identification of risks and risk mitigation efforts, and a variety of analytical services to aid government officials in performing their responsibilities and carrying out their stewardship of government resources. Such work, like other performance audits, (1) involves a level of analysis, research, or evaluation, (2) may provide conclusions and recommendations, and (3) results in a report.

1.16 Audit organizations may also seek to achieve improvement through cooperative engagements with affected agencies while continuing to maintain independence under the standards. Such “constructive engagement” approaches, where appropriate, can facilitate management improvements on a real-time basis without compromising the audit organization’s independence and objectivity. Efforts to provide technical advice and expertise to agencies for use in responding to current risks, correcting internal control deficiencies, or responding to the audit organization’s recommendations are examples of constructive engagements. Constructive engagement approaches will not impair independence when conducted within the framework of an audit or as technical advice to agencies. However, audit organizations need to take care to avoid making management decisions or to avoid situations that would result in the audit organization auditing its own work, such as directing agencies to undertake a specific activity in a specific manner as discussed more fully in chapter 3 of these standards. By limiting the audit organization’s role in this way, the overarching principles of independence are not violated.