Audit On The Project Cost And Schedule Based On Earned Value Method

Nowadays the project management is facing enormous challenges, because of theincreasing levels of technology, the complexity of modern construction projects andthe innovative requirements of large scientific research and environmental projects.Under normal circumstances, major national projects tend to be some of the highinvestment, large-scale, long duration with a high risk, difficult to manage features. Ifthe regulatory controls are not reasonable, it is likely to lead to the fact that the initialinvestment cannot be recovered, and resulting in huge losses. Government investmentoverrunning and delaying seem to have become the norm. How to effectively preventsuch problems the urgent priorityNowadays, higher authorities supervision is the main way to realizing real-timemonitoring of the project. As the third party the independent audit institutions’ traceaudit also promote the implementation and ongoing of the project. Tracking auditbreaks the limitations of post-audit and completion settlement audit for a long time,and the post-audit alters to pre-audit. However, the use of tracking audit still mainlyconcentrate on fund, and less concern about the performance of the project’s cost andschedule situation. And the current audit approach is the traditional bias analysismethods. Therefore, the introduction of the earned value analysis in project audit isvery necessary. Earned value method considering the project cost and scheduleperformance. This analysis incorporated into the audit can provide a more objectiveand authentic data for auditors and all the other information users. Thus it plays aneffect on the real-time monitoring project, and then promptly corrects the deviation ofthe project which ensures that the project is completed on time and fulfills quantityrequirements.This paper introduces the earned value method, elaborates its basic principle,analyzes the feasibility of its application in project audit and designs the specificapplications. And also showcases the GAO(General Accountability Office) projectcost and schedule performance audit practice then analyzes China’s administrativemechanism. Finally, the case of a project is given to demonstrate the project cost andschedule performance audits practices.