Audit Is an Evaluation of a Person

                      CHAPTER   ONE

                           Introduction

1.1Background of the study

The role of the Internal Audit traditionally has been limited to expressing Recommendations on financial statements and related issues of legality, regularity and fraud.  This involves assessments of whether transactions were properly controlled, whether care was taken in the collection and custody of revenues, whether expenditures were properly incurred and generally, whether the executives’ intentions were being met.

However, this approach does not provide information on waste, inefficiency or ineffectiveness.  Increased public expenditure, the need for more rational and informed decision making in the use of resources and the growing demand for public accountability of those who manage public resources necessitated a new and expanded scope audit–performance audit.Today, performance audit has become one of the major tasks in most developed and in some developing countries.  According to Financial administration proclamation 648/2001 (E.C) article No 7 sub article 1 (a) Internal audits in Ethiopia are already provided with mandates to undertake performance audit in the public bodies.    Traditional financial and compliance audits will continue to play an essential part; it is anticipated, however, that there will be a gradual and planned growth of performance audit work.

1. Objective of the study

1.2.1 General objective

The general objective of this study is to evaluate whether the Ethiopian public sectors applying the performance auditing.

          1.2.2 Specific objectives 

• To examining the application of performance audit in water and energy minister
• To recommend appropriate solutions
• The role of OFAG in Ethiopia performance auditing.

1.3 Scope of the study

These studies will emphasis on how performance auditing practice is applicable in practice in the public sectors particularly OFAG role on water and energy minister of Ethiopia.

In water and energy minister specifically investigate on irrigational projects.

1.4   Significance of the study

The major benefits and importance of this study are the following;

It will help the auditors in the organizations to know their role in the organization.

It will be enable the managers to be aware of the importance and use of performance audit in achieving intended objective.

It will be allowed the researcher to practice a larger similar study that could be performed in other organizational sector.

It will be used as an additional reference to the existing restructure and can be used as a spring boards for other research, who wishes to conduct a research in the same area.