Certified Government Auditing Professional (CGAP) Practice Exam

What is often a key component of a performance audit in terms of effectiveness?

1. Measuring the performance against set objectives.

2. Documenting all audit processes comprehensively.

3. Focusing primarily on financial audits only.

4. Implementing strict controls without evaluating outcomes.

The correct answer is: Measuring the performance against set objectives.

Measuring performance against set objectives is a fundamental element of performance audits because it allows auditors to assess whether programs and operations are achieving their intended outcomes. This form of audit emphasizes not just the efficiency of resource utilization but also the actual effectiveness of a program or service in meeting predefined goals. By comparing the outcomes to the established benchmarks, auditors can provide valuable insights into areas that may require improvements or adjustments. In contrast, documenting audit processes comprehensively, while important for maintaining transparency and accountability, does not itself evaluate the effectiveness of a program. Focusing primarily on financial audits limits the scope to financial resources without addressing the broader impacts and effectiveness of programs. Furthermore, implementing strict controls without evaluating outcomes may lead to compliance without necessarily ensuring that objectives are met, which undermines the purpose of performance auditing. Thus, the emphasis on measuring performance against set objectives is what distinguishes performance audits and highlights their role in enhancing organizational effectiveness.