Copyright 2006 McGraw-Hill Australia Pty Ltd Revised PPTs t/a Auditing and Assurance Services in Australia 3e by Grant Gay and Roger Simnett Slides prepared by Roger Simnett Chapter 1
Trang 1Copyright 2006 McGraw-Hill Australia Pty Ltd
Revised PPTs t/a Auditing and Assurance Services in Australia 3e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
Chapter 16
Audit and Assurance Services in the Public
Sector
Trang 2Australian System of Government
Trang 3Copyright 2006 McGraw-Hill Australia Pty Ltd
Revised PPTs t/a Auditing and Assurance Services in Australia 3e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
Accountability
• Parliament approves the use of various resources.
• The management of public sector entities is entrusted with public resources on a stewardship basis.
• Reports are prepared showing the use of resources
• Public sector auditors provide assurance on reports.
Learning Objective 2:
Trang 4Cycle of Accountability
Trang 5Copyright 2006 McGraw-Hill Australia Pty Ltd
Revised PPTs t/a Auditing and Assurance Services in Australia 3e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
Trang 6Public Sector Audit Requirements
• Commonwealth Auditor-General, through Australian National Audit Office (ANAO), is responsible for the
audit of Commonwealth government departments,
statutory authorities and government corporations.
• Each State and Territory has an Auditor-General, who has similar responsibilities at the State and Territory level.
Learning Objective 4:
Trang 7Copyright 2006 McGraw-Hill Australia Pty Ltd
Revised PPTs t/a Auditing and Assurance Services in Australia 3e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
Trang 8Audit standards in the public sector
• Audits should be performed in accordance with
Australian auditing standards.
• Standards should be applied to the extent that they are not inconsistent with or unnecessary to public sector audit mandate.
Trang 9Copyright 2006 McGraw-Hill Australia Pty Ltd
Revised PPTs t/a Auditing and Assurance Services in Australia 3e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
Trang 10Additional reporting matters
• Administrative operations;
• Significant breaches of legislation;
• Public money not correctly accounted for;
• Accounting and other records not properly maintained;
• Propriety and probity of transactions;
• Recommendations to improve administrative
processes; and
• Economy, efficiency and effectiveness of
administration.
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Revised PPTs t/a Auditing and Assurance Services in Australia 3e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
Independence
• Critical to the audit function.
• Auditor-General is appointed by Governor-General for a period of 5-7 years and can only be removed by a
recommendation from both Houses of Parliament in the same session.
Trang 12Performance Audits
• A performance audit is an independent, expert and
systematic examination of the management of an
organisation, program or function for the purposes of: – assessing performance;
– identifying opportunities for improvement; and
– developing recommendations for improvement or further action.
Learning Objective 5:
Trang 13Copyright 2006 McGraw-Hill Australia Pty Ltd
Revised PPTs t/a Auditing and Assurance Services in Australia 3e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
Objectives of the audit performance
• To provide Parliament with assurance of the quality of management of public resources.
• To assist public sector managers by identifying,
promoting and protecting better management practices.
Trang 14Performance audit
• Might include a review of:
– the use of human, financial and other resources.
– information systems, performance measures and
monitoring arrangements.
– procedures followed by audited bodies for remedying
identified deficiencies.
• Emphasis is on the economy, efficiency and
effectiveness of management and procedures.
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Revised PPTs t/a Auditing and Assurance Services in Australia 3e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
• Examples of economy include whether the entity has:
– followed sound procurement practices; and
– acquired the appropriate type, quality and amount of
resources at the right time and for the lowest cost.
Trang 16Efficiency defined
• Efficiency: Use of a given set of resource inputs to
maximise outputs, or the use of minimum input
resources for a predetermined level of output It is
essentially a resource usage concept (Ref AUS
806.04)
• Examples of efficiency include whether the entity has:
– prevented idleness and overstaffing; and
– prevented duplication of effort by employees.
Trang 17Copyright 2006 McGraw-Hill Australia Pty Ltd
Revised PPTs t/a Auditing and Assurance Services in Australia 3e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
Effectiveness defined
• Effectiveness: The achievement of objectives or other intended effects of activities It focuses upon the results
or outcomes of resource usage and organisational
operations Therefore, effectiveness is ends oriented rather than means oriented
• (Ref AUS 806.05)
• Examples of effectiveness include:
– an audit of a program to determine whether it has
achieved its objective.
– an analysis of the relevance of an entity's activities to its objectives.
Trang 18Relationship between economy, efficiency
and effectiveness
Trang 19Copyright 2006 McGraw-Hill Australia Pty Ltd
Revised PPTs t/a Auditing and Assurance Services in Australia 3e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
Stages of a performance audit
Trang 20Conceptual framework for stages in a
performance audit
Trang 21Copyright 2006 McGraw-Hill Australia Pty Ltd
Revised PPTs t/a Auditing and Assurance Services in Australia 3e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
Analysing evidence, developing findings
and recommendations
Trang 22Regularity Audits
• Involves attestation of financial accountability and
includes elements of both:
– Financial report audits (already discussed); and
– Compliance audits.
Learning Objective 6:
Trang 23Copyright 2006 McGraw-Hill Australia Pty Ltd
Revised PPTs t/a Auditing and Assurance Services in Australia 3e by Grant Gay and Roger Simnett
Slides prepared by Roger Simnett
Compliance audits
• Two primary forms:
– to express an opinion on whether an entity has complied with relevant requirements or a specific requirement, such
as legislation, regulations, directives or municipal by-laws; and
– to report instances of non-compliance with relevant
requirements observed during the course of discharging other audit responsibilities.