“Performance audit with enhancing effectiveness of collecting and spending toll fee

Introduction

1. The necessaries of the topic.

Audit work is the type of audit will be developed in the world recently. The development

was started from 70 years of XX century in the public area and then spread to the private sector.

In the U.S., Canada and some European countries such as Sweden, Germany ... members of

parliament in this country required to provide information on the effective and efficient in the

expenditure of funds. They show not satisfied with the role of traditional audit- only focus on

the compliance with the regulations on the expenditure- they want to know has the "value for

money" been implemented only for the funds. They also want the people who has responsible

for revenue, expenditure management the public funds to explain more for its.

The request has created challenges to for the auditor must try to respond by expanding the

scope of their activities. Therefore, they started implementing performance audit, then in that

countries the audit law and other laws related was issued, in which the state auditor and the

internal auditor must consider for the value of money when implement audit by themselves.

In Vietnam, the concept of "performance audit" is only known in the early years of the 90

decade through documents from foreign countries. Until now, the number of people who has

good knowledge and has conditions to apply and practice performance audit is limited

compared to the financial audit.

The State Audit is established to improve the effective macro-management of the

government in use the resources of the country. Until now, the State Audit has implemented

many specific activities. In the past years has contributed to clean up the national finance,

increase the national budget income and reduce the national budget spending thousands billion

dongs. Currently in the implementation tasks process, audit activities mainly focus on financial

audit and compliance audit, but what happened to our country has shown the status of public

resources wasting in the using national budget units. According to the general trend, we actually

implement performance audit to remove that situation. Performance audit only implemented

through the "Audit of collecting and using toll" Although it has good results of the audit but this

still has some bad results. Therefore, the research “Performance audit with enhancing

effectiveness of collecting and spending toll fee” is necessary.

2. Research purposes

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Based on researching the argument issues about performance audit and practices of the

"Audit of collecting and using toll" propose the solutions to improve performance audit to

enhance economic, efficiency and effectiveness in administer public resources in using national

budget.

3. Research objectives and scope

This is a very new theory and practice issue, because performance audit just has applied

in our country in a short time, so maybe there are some mistakes in searching. Therefore, we

only focus on some issues of performance audit and process auditing in our country now. The

objectives of the research are:

- Forming the scientific basis which is the base of performance Audit.

- Analyzing, estimating, making clear the issues about performance audit in "Audit of

collecting and using toll"

- Investigating and giving opinions, solutions and petitions in order to improve the

performance audit in audit the using national budget units.

4. Research methods.

The essay mainly research on performance audit and performance audit process in the

using national budget units, so the main methods are organizing, analysis and synthesis…

The essay include 58 pages, besides the introduction and conclusion, the researching has

3 chapters.

Chapter I: The theoretical framework of Performance Audit in using national budget units

Chapter II: The real situation of Performance Audit with regard to collection and

spending toll fees in viet nam

Chapter III: Solutions to improve performance audit with regard to collection and

spending toll fees

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Chapter I

The theoretical framework of Performance Audit in

using national budget units

1.1. The basic problems of performance Audit

1.1.1. Definition of performance audit?

The term “Audit” includes financial audit, compliance audit and performance audit. It

further adds that in pursuance of the constitutional responsibility, The SAI is empowered to

decide the nature, scope, extent and quantum of audit to be conducted by it or on its behalf.

INTOSAI Audit standard 1.0.40 defines the performance audit as under:

“Performance audit is concerned with the audit of economy, efficiency, effectiveness, and

embraces:

Audit of the economy of the administrative activities in accordance with sound

administrative principles and management policies;

Audit of the efficiency of utilization of human, financial and other resources, including

examination of information systems, performance measures and monitoring arrangements and

procedures followed by audited entities for remedying identified deficiencies;

Audit of the effectiveness of performance in relation to the achievement of the

objectiveness of the audited entity and audit of the actual impact of activities compared with the

intended impact.”

Performance auditing is an independent assessment or examination of the extent to which

an entity, program or organization operates efficiently and effectively, which due regard to

economy.

In practice, there can be an overlap between compliance and performance auditing and in

such a cases, classification of a particular audit will depend on the primary purpose of that

audit. Compliance audit embraces attestation of financial accountability involving expression of

opinion on financial statements, audit of financial systems and transactions, including an

evaluation of compliance with applicable statues and regulations, audit of internal control and

internal audit functions and audit of probity and propriety of administrative decisions taken

within the audited entity.

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1.1.2. The meaning of economy, efficiency and effectiveness auditing

As stated above, performance auditing is mainly concerned with the examination of

economic, efficiency, and effectiveness. According to the Auditing Standards (AS 1.0.40), an

individual performance audit may have the objective of examining one or more of these three

aspects.

Economy

Economy is minimizing the cost of resources used for an activity, having regard to the

appropriate quality. Economy issues focus on the cost of the inputs and processes. Economy

occurs where equal- quality resources are acquired at lower price, spending less.

Judging economy in itself implies forming an opinion on the resources (human,

financial and material) deployed. The central question is to assess whether- given the context￾resources have been acquired, upheld and used economically. The question to be asked by a

performance auditor is, do the means chosen represent the most or at least a reasonable

economical use of public funds?

Efficiency

Efficiency is relationship between the outputs, in terms of goods, services or other

results and the resources use to produce them. Efficiency is where the use of any given set of

resources inputs, or input is minimized for any given quantity and quality of output, spending

well.

The main question related to efficiency is whether the resources have been put to an

optimal or satisfactory use or whether the same or similar results in terms of quality and turn￾around time could have been achieved with fewer resources. The question refers to the

relationship between the quality and quantity of goods and services yielded and the cost of

resources used to product them, in order the results achieved.

A finding on efficiency can be formulated by means of a comparison with similar

activities, with other period or with a standard, which the entity has explicitly adopted,

sometimes, standards such as best practices are applicable. Assessments on efficiency might

also be based on condition which related to specific standard, when matters are so complex that

are no standards. In such case, assessment must be based on the best available information and

arguments and in compliance with the analysis carried out in the audit.

Auditing efficiency embraces aspects such as whether:

- Human, financial and other resources are efficiently used;

- Public sector programs, entities and activities are efficiently managed, regulated,

organizes and executed.

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- Services are delivered in a timely manner; and

- The objectives of public sector programs are met cost- effectively.

Effectiveness

Effectiveness is the extent to which objectives and achieved the relationship between

the intended impact and the actual impact of an activity. Effectiveness addresses the issue of

whether the program/ activity has achieved its objectives, spending wisely. When focus on

effectiveness, it is important to distinguish between the immediate outputs or products and the

ultimate impacts or outcomes. Effectiveness is achieved, for instance, where there is improved

achievement of a program’s objectives. Outcomes are important to the effectiveness of

program/ activities but may be difficult to measure and assess than the inputs and outputs.

Outcomes will often be influenced by external factors and many required long- term rather than

short- term assessment.

Effectiveness is essentially a goal- attainment concept. It is concerned with the

relationship between the objectives set up. Outputs provided and objectives met. Some of the

questions to ask in effectiveness assessment are. A the objectives of the policy being employed

and the results achieved consistent with the objectives of the policy and- perhaps the most

difficult- are the impacts really the results of the policy rather than other circumstance? The last

ones may be difficult to establish in most cases and will call for a caution approach.

Performance auditor may come across situation where the inputs stated to have been

used and outputs states to have been derived are not correctly stated. Unless the correctness of

inputs and outputs are validated with the help of appropriated audit test, the evaluation of

efficiency may be yielded incorrect results. It is, therefore incumbent upon the performance

auditor to verify correctness of the reported data of “inputs” and “outputs” while applying the

test of efficiency. For example, the money stated to have been utilized on a program might not

be used entirely on the program. Part of the inputs may have been used on other items, part

could be unutilized in the form of deposits, another part could be advances to vendors,

analyzing of inputs, particular the financial inputs with the help of a finance inverse free may

establish the resources actually utilized for the program. Similar analysis for other inputs and all

outputs may be necessary to carry out an accurate analysis for efficiency.

1.1.3. Features of performance auditing

As stated in the Auditing Standards, performance auditing is not overly subject to specific

requirements and expectations. While financial auditing tends to apply relatively fixed

standards, performance auditing is more flexible in its choice of subjects, audit objects,

methods, and opinions. Performance auditing is not a regular audit with formalized opinions,

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