The performance audit is an independent, objective, and reliable examination of the Government of the RS, government, and other institutions of the public sector, i.e. programs, activities, and processes under the jurisdiction of the Government of the RS and government institutions in terms of economy, efficiency and effectiveness. The principles of economy, efficiency, and effectiveness, according to the International Auditing Standards for the Public Sector, can be defined as follows:
- the principle of the economy implies reducing resource costs to the lowest possible extent. The used resources should be available in a timely manner, in the appropriate quantity and with the appropriate quality, and at the best price.
- the principle of efficiency implies the best possible use of available resources. It is related to the ratio of used resources and output values achieved in terms of quantity, quality, and deadlines.
- the principle of effectiveness refers to the fulfillment of set goals and the achievement of expected results.
In addition to the term performance audit, other terms appear in audit theory and practice, such as performance review, economy, efficiency, and effectiveness audit (3E audit), and value for money audit. The mentioned terms in audit terminology have essentially the same meaning.
Basically, a performance audit answers the following questions:
- whether the right jobs are being done;
- whether jobs are done the right way.
The audit of effectiveness gives an answer to the question of whether the right jobs are being done, and the audit of economy and efficiency is whether the jobs are being done in the right way.
The performance audit in the Supreme Audit Office is carried out on the basis of the Annual Audit Plan, which is adopted by the Auditor General and considered by the Audit Committee of the National Assembly of the Republic of Srpska, through the implementation of certain audit procedures and procedures through the preliminary study and through the main study, and the results of the performance audit by the Supreme Audit Office presents through the final report on the conducted performance audit.
Performance audit reports, as the basic product of the audit process, are a good basis for changes in the organization, way of functioning, and resource management, then for better quality and user-oriented services, as well as for raising public responsibility to a higher level. Performance audit reports are also in the function of promoting good management and publicity of the work of public sector institutions.