Criteria: The Center of Your Audit

No one seems to have enough time these days to read as much as they’d like. To assist my fellow auditors, I created another reference graphic in case you ever need a quick refresher on audit criteria. Download the PDF version here to keep with your other documentation.

What exactly is audit criteria?

Not too long ago, I wrote a detailed blog post asking this very question. My answer is the same now as it was then: Audit criteria is the standard that you evaluate the subject matter against. Without firm criteria, the auditee will likely resist your audit recommendations.

The GAO describes criteria this way:

8.17 Criteria identify the required or desired state or expectation with respect to the program or operation. Criteria provide a context for evaluating evidence and understanding the findings, conclusions, and recommendations in the report. Suitable criteria are relevant, reliable, objective, and understandable and do not result in the omission of significant information, as applicable, within the context of the audit objectives. The relative importance of each of these characteristics to a particular engagement is a matter of professional judgment. In instances where laws, regulations, or policies prescribe the criteria to be used for the engagement, such criteria are presumed to be suitable in the absence of indications to the contrary.

6.25  Criteria: For inclusion in findings, criteria may include the laws, regulations, contracts, grant agreements, standards, measures, expected performance, defined business practices, and benchmarks against which performance is compared or evaluated. Criteria identify the required or desired state or expectation with respect to the program or operation. Criteria provide a context for evaluating evidence and understanding the findings, conclusions, and recommendations in the report. In a financial audit, the applicable financial reporting framework, such as generally accepted accounting principles, represents one set of criteria.

Need more guidance?

I’m here to help! Please join me for Audit Findings: An Online Workshop for the Pacific Islands – July 10-12, 2023. The timing of this course is designed for the Pacific Islands (1:00-5:00 PM Central), but anyone is welcome to register.