1. Project Audit Initiation This step involves starting the audit process, defining the purpose and scope of the audit, and gathering sufficient information to determine the proper audit methodology.
2. Project Baseline Definition This phase of the cycle normally consists of identifying the performance areas to be evaluated, determining standards for each area through benchmarking or some other process, ascertaining management performance expectations for each area, and developing a program to measure and assemble the requisite information. Occasionally, no convenient standards exist or can be determined through benchmarking. For example, a commodity pricing model was developed as part of a large marketing project. No baseline data existed that could serve to help evaluate the model. Because the commodity was sold by open bid, the fi rm used its standard bidding procedures. The results formed baseline data against which the pricing model could be tested on an “as if” basis. Table 12-3 shows the results of one such test. CCC is the firm and the contracts on which it bid and won, together with the associated revenues (mine net price  tonnage), are shown. Similar information is displayed for Model C, which was used on an “as if” basis, so the Model C Revenue column shows those bids the model would have won, had it actually been used. 3. Establishing an Audit Database Once the baseline standards are established, execution of the audit begins. The next step is to create a database for use by the audit team. For example, consider the database required by the CCC pricing model test in Table 12-3. Depending on the purpose and scope of the audit, the database might include information needed for assessment of project organization, management and control, past and current project status. schedule performance, cost performance, and output quality, as well as plans for the