PFM5 – Public Sector Audits

PFM 5: PUBLIC SECTOR AUDITS

4.5.1. LEARNING OUTCOMES OF COURSE: Upon successful completion of this course, a student should be able to:

1. Explain the objective of Auditing in the Public Sector;
2. Apply the principles, procedures and legislation guiding audit work in the Public Sector;
3. Distinguish the types of Audit Engagements;
4. Prepare an Audit Report that demonstrates expected levels of quality control;
5. Explain the role and functions of Audit Committee; and vi. Discuss the role of the Public Accounts Committee.

4.5.2. MODULE UNITS AND WEIGHTINGS

Unit	Title	Weight %
1	Introduction to Public Sector Audits	5
2	Principles of Public Sector Auditing	15
3	Legislation governing Audits	15
4	Types of Public Sector Auditing and Engagements	15
5	Quality Control in Auditing	15
6	Confidence and Assurance in Public Sector Auditing	15
7	Audit Committees	10
8	Public Accounts Committee	10

4.5.3. COURSE CONTENT

UNIT 1: INTRODUCTION TO PUBLIC SECTOR AUDITS

• Unit Topics:

• 1.1 Public Sector Auditing and its objectives
• 1.2 Relationship between Accountability and Auditing in Public Sector
• 1.3 Importance of Auditing in Governance
• 1.4 Internal and External Auditing
• 1.5 Evaluation of Internal Controls

UNIT 2: PRINCIPLES OF PUBLIC SECTOR AUDITING

• Unit Topics:

• 2.1 Fundamental Principles of Auditing
• 2.2 General Principles
  • 2.2.1 Ethics and Independence
  • 2.2.2 Professional Judgment, Due Care and Skepticism

UNIT 3: LEGISLATION GOVERNING AUDITS

• Unit Topics:

• 3.1 Legal Framework for Public Sector Auditing Mandate

UNIT 4: TYPES OF PUBLIC SECTOR AUDITING AND ENGAGEMENTS

• Unit Topics:

• 4.1 Elements of Public Sector Auditing
• 4.2 Types of Engagement
  • 4.2.1 Financial audits
  • 4.2.2 Value for Money (VFM) auditing (Performance Audits)
  • 4.2.3 Compliance Audits
  • 4.2.4 Environmental Audits
  • 4.2.3 System Based Auditing
  • 4.2.4 Forensic Audits

UNIT 5: QUALITY CONTROL IN AUDITING

• Unit Topics:

• 5.1 Elements of a high quality audit work:
  • 5.1.1 Audit Team Management and Skills
  • 5.1.2 Audit Risk
  • 5.1.3 Materiality
  • 5.1.4 Documentation
  • 5.1.5 Communication
  • 5.2 Audit Process

UNIT 6: CONFINDENCE AND ASSURANCE IN PUBLIC SECTOR AUDITING

• Unit Topics:

• 6.1 The need for Confidence and Assurance
• 6.2 Forms of providing Assurance
• 6.3 Levels of Assurance

UNIT 7: AUDIT COMMITTEE

• Unit Topics:

• 7.1 The role and functions of the Audit Committee
• 7.2 Benefits of Audit Committees to Public Entities
• 7.3 Challenges facing Public Sector Audit Committees
• 7.4 Legislative and Regulatory requirements
• 7.5 The role of clarity, independence, knowledge, skills and experience in audit committees

UNIT 8: PUBLIC ACCOUNTS COMMITTEE

• Unit Topics:

• 8.1 The background of Public Accounts Committee.
• 8.2 Appointment and Composition of the committee
• 8.3 Functions and procedures for Public Accounts Committee
• 8.4 Powers of the Committee
• 8.5 Reports of the Committee

4.5.4 The Examination Paper Format:

Structure of the Paper	Marks
Section A: 1 Compulsory question of 40 marks	40
Section B: Any 3 out of 4 questions, 20 marks each	60
TOTAL	100

The candidates will be allowed fifteen (15) minutes reading time. 4.5.5 Recommended Readings: ZICA PFM 5 Study Materials