Performance Auditing
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Performance Auditing

Contributing to Accountability in Democratic Government

Edited by Jeremy Lonsdale, Peter Wilkins and Tom Ling

This state-of-the-art book examines the development of performance audit, drawing on the experience in a number of different countries, including the United Kingdom, the United States, Australia, the Netherlands, and Belgium.
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Chapter 7: Forming Judgements: How do VFM Audit Teams Know What They Know?

Justin Keen


Justin Keen Alex Scharaschkin’s chapter examined sound argument construction in performance audit, drawing on work on the nature of evidence and argument in legal reasoning. This chapter seeks to complement that contribution by looking further at the question: how do audit teams employ data and methods in arriving at their judgements? The relevance of these arguments to the themes of the book is that how audit teams decide what it is they know will directly shape the evidence and argument they produce. This evidence and argument, in turn, shape the contribution of performance audit to accountability and democratic governance. This chapter presents a descriptive framework for discussing the strategies that performance audit teams use to produce their reports. In the first section, we consider the role of judgements in audit work before commenting on the literature on performance audit methods, and then presenting and discussing the framework. JUDGEMENTS IN AUDIT WORK In the last two decades and more, the practices of auditors have extended into new fields and, as we noted in Chapter 1, the term ‘audit’ has come to be used ever more widely (Power, 1997; Strathern, 2000; Lapsley and Lonsdale, 2010). One type of judgement is probably best known – the summative judgement or opinion provided by a financial auditor on sets of financial statements. This usually indicates that these financial statements are free from material mis-statement and are fairly represented in accordance with the required accounting regulations. Many are at the level of individual organisations, but judgements are...

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