If a controlling standard does not exist for the service being evaluated, what should the auditor do?

If a controlling standard does not exist for the service being evaluated, what should the auditor do?

• A. Declare a potential error using persuasive standards.
• B. DO NOT declare error, but use the persuasive standards (with appropriate citations and qualifications) to identify potential post-payment risk.
• C. Wait until there is a controlling standard.
• D. Ignore potential post-payment risk.

Answer: (B)

When no controlling standard exists for the service, you can’t declare an error because there’s no fixed benchmark to judge against. Instead, you rely on persuasive standards—relevant laws, regulations, contract terms, industry practices, and professional judgment—to evaluate whether the payments and outcomes are reasonable and appropriate. Gather evidence aligned with these criteria, cite them properly, and clearly indicate the nonbinding nature of these standards in your conclusions. The emphasis is on identifying potential post-payment risk and explaining how the absence of a controlling standard affects the assessment, rather than asserting an error. This approach surfaces risk, supports remediation or further inquiry, and avoids premature or unfounded conclusions.

When no controlling standard exists for the service, you can’t declare an error because there’s no fixed benchmark to judge against. Instead, you rely on persuasive standards—relevant laws, regulations, contract terms, industry practices, and professional judgment—to evaluate whether the payments and outcomes are reasonable and appropriate. Gather evidence aligned with these criteria, cite them properly, and clearly indicate the nonbinding nature of these standards in your conclusions. The emphasis is on identifying potential post-payment risk and explaining how the absence of a controlling standard affects the assessment, rather than asserting an error. This approach surfaces risk, supports remediation or further inquiry, and avoids premature or unfounded conclusions.