Question 1:
Importance of Public Sector Auditing Standards and
Audit:
- Financial Audit: Intended to verify financial
statements, accounts and balances as per generally accepted
accounting principles. Also, to verify money expended has been
applied to the same purpose and premise for which it was obtained
and within the boundaries of acceptable vagaries.
- Audit of Legality Concordance: Intended to
verify all transactions, processes are in full accordance with the
law of the land and do not in any case harm or influence an
organization or an individual for its own means.
- Audit of efficacy or of programs: Intends to
verify the result obtained from a plan for which money was employed
is in conformance with the objective for which program was
made.
- Audit of Economy and efficiency: Intends to
verify the way resources have been managed. Whether resources have
been acquired at minimum cost and employed for maximum
benefit.
- Audit of Systems and Procedures: It is
important for every organization which follows rules and laid down
principles to verify its system and processes for improvement and
quality conformance.
Financial and Audit of Legality concordance were originally
grouped together to form Audit of Regularity and rest other audits
were termed as Operational Audit.
After audit is complete it is necessary to file a report which
has adequate representation of facts and figures, adequate content,
adequate preparation, adequate opinion for the target audience to
understand it better and enough publicity for the report.
Audit must be treated as an instrument for exercising control
over processes, systems, finances and individuals to make
governments and governing bodies more responsible towards the
public and its resources, but it cannot be considered as an end
unto itself.
Question 2:
Financial Auditing in Public sector Organizations is important
because:
- It Provides intended users with independent, objective and
reliable information, conclusions or opinions based on sufficient
and appropriate evidence relating to public entities.
- Enhancing accountability, transparencyand encouraging
continuous improvement and confidence in the appropriate use of
public funds and assetsand of public administration
performance.
- Facilitating the functions of those bodies within the
constitutional arrangement that are exercising general monitoring
and corrective functions over those responsible for the management
of publicly funded activities.
- Creating incentives for change by providing knowledge,
comprehensive analysis and well founded recommendations for
improvement