Impact of Private Sector Review Audit Firms on the Public Sector Government - Admission/Application Essay Example

The Impact of Private Sector Review "Audit Firms" On the Public Sector "Government" In the Maintain Of Public Funds Introduction Auditing firms play an important role towards the assessment of accounting records of both private and public organisations. In this regard, audit firms develop effective governance principles and standards based on which the values of public funds are to be maximised. These values provide an effective governance framework for managing public funds. The key principles of audit firms are to manage public funds on local, national and international level. Public funds are raised from different taxation policies of the government to be used for the development of the society as a whole. In this context, audit firms are entrusted with the responsibility of seeking that public funds are raised as well as utilised in an appropriate manner. The focus is on the responsibilities of auditing firm towards the government for managing public funds. Subsequently, an effective audit activity is needed to be developed in the public sector i.e. towards the government for effective management of funds (The Institute of Internal Auditors, 2012). The aim of this essay is to build a new era in the government accounting and reporting procedure in relation to the value of public funds. Thus, the measures of this essay have to mention about the growth of responsibilities for the audit firm towards the government. The objectives of the study are to ensure legality, economy, regularity, efficiency and effectiveness in the financial statement for the management of public funds. The audit firms are required to obey laws and regulation of the government for ensuring efficacy in the management of public funds. Responsibilities of Auditing Firms towards the Government The responsibilities of the auditing firm towards the government are related to the internal and the external examination of the public funds. Activities and reporting of public funds is identified to be based on different forms of jurisdiction of the government. In this respect, the activities of audit firms are to configure appropriately to fulfil the duties of managing public funds in a transparent and accountable way. The activities of the audit firms are to ensure that the public sector entity manages funds with credibility and determines the appropriate behaviour based on which public funds are to be utilised. Governance of public funds will be defined as an arrangement of processes and have to structure the implementation by the board to direct, inform, manage and monitoring through the activities of audit firms for ensuing that the objectives of public sector is accomplished successfully. The responsibilities of the auditing firms towards the government have to look forward about the development of the public funds. Public funds play an important role for meeting the current requirement of a community and for the development of a society at large in terms of infrastructure and employment among others. An effective audit firms’ activity strengths the governance by holding the entities of the public funds. The audit firms have important functions in this aspect, which is crucial for equity, promoting credibility, and managing spending behaviour of the government for reducing the risk of public exploitation (Bouckaert, 2008). Consequently, it is crucial that the activities of the audit firms are organised suitably and develop standards for achieving the objectives of the government towards the management of public funds. The responsibilities of the audit firms towards the government are based on various spheres that include monitoring records and entry of funds, and ascertaining that financial statements are maintained with integrity. In auditing, good governance is needed to be established for management of funds in an effective manner. A good governance policy includes ethical values based on which objectives and strategies relating to internal control are ensured. Ethical values should also align procedures and policies for encouraging the employees and to develop their behaviour for ascertaining that financial information are managed responsibly. Good governance is required to ensure that the auditing policies are implemented for effective management of internal operations relating to financial areas. The overall performance of public funds is based on the management of audit firms, as audit firms follow laws and regulation of the government. For good governance in public funds, audit firms require performance reporting and regular financial statement validation. In this respect, regular monitoring of the accounts and financial data would ensure that the funds generated by the government are used for benefit of the public. When the public sector does not achieve the goals of financial performance or when problems are faced during the process of managing the funds, a good governance mechanism is required to be implemented by audit firms. Respectively, an audit firm entitled with the responsibility to manage financial operations of public sector is needed to identify the causes of the problems and to formulate corrective actions for the management of public funds (Bouckaert, 2008). Auditing Impacts on Public Funds Audit firms are required to devise principles for the governance of public funds, which are to be exclusive in the nature. Exclusiveness of the public sector has an importance on the political forces, which is non-profit in nature and the final purposes of the public funds are towards meeting the public requirement. At the same time, the entities associated with public sector holds power for improving economic growth and thus, audit firms must endorse protection to ensure fairness and to use the power, which is to be delivered for effective public services. The protection that is being focused is fundamental in the political system from which the public can donate their earning to the public funds entities. Overall, the public auditing entities have benefits in the measures to confirm the resources and authority to meet the goals and objectives of the funds generated by the government. Moreover, it is important to mention that good public governance is required for fair and independently enforced laws and regulations. The absence of good governance in public funds structures is a risk for the public sector, as it may lead towards misuse and wastage of public funds. Therefore, in terms of this basis, governance principles of public auditing firms describe transparency, accountability, equity and integrity, which are essential in the management of public funds (Harris, 2011). The principles of transparency are identified to be related to public auditing entities and their constituents. Good governance includes a suitable disclosure of key evidence to the stakeholders, so that the stakeholders have appropriate facts about the performance and the activities in relation to public funds. It is clearly understood about motivation and come to the conclusion about its impact of actions in public funds. According to the public audit firms, the decisions, transactions and actions must be conducted openly. The entities of the public funds are required to make a documentation of funds on the basis of law applicable. Moreover, many audit entities have a law to publish meeting notices including a precise program items. Although the interest of the public is sometimes served by protecting the information from disclosure relating to criminal investigation, securities of a private company and transparency of information and action plays a vital role towards the management of public funds. As per these concerns, accountability is the procedure whereby the audit entities and individuals in the organizations have the responsibilities on the actions and decisions included by the public sector. In this respect, auditing is an important aspect for the governance of public sector, as auditing assists public sector entities to operate operations with better integrity and improve operations for ensuring that confidence is instilled amid stakeholders as well as citizens. In addition, audit firms ascertain that auditor supports in the governance of public sector for building insight, foresight and oversight of responsibilities in accordance with which corruption can be managed (Harris, 2011). The impact of equity in public funds relates to fair management of the public funds, so that governance of public sector entities is enhanced. The public grants both power and money for carrying their responsibilities to the entities in public sector for better management of their resources. However, wastage of resources, misuse of power in the public funds or any other issues leads towards corruption and poor management is identified to have negative impacts on the services delivered to the public. Similarly, in case of principles to be followed by the public sector entities are based on ethical values, policies, outcomes and expectation of the citizen in terms of management of their funds. Audit firms conduct an assessment of the operations of the public sector entities with the aim of instilling ethics, setting direction, accountability reporting and continuous monitoring, which aids in building trust by providing credible as well as reliable information to the citizens. The social, political, environmental, and economic cost for the public is recognised to be generated from the funds raised from the citizens. In this respect, the principle of integrity is identified to be playing an important role in building confidence as well as trust amid citizens towards public sector entities. In this context, the consequences of violating the expectation of the citizen is determined to shift the confidence level, which in turn affects in generating public funds and influence the operations and leadership aspects to a large extent (MRicky, 2010). The impact of audit firms can be measured on the basis of the functional areas of the organizations associated with public sector. The performance of public sector entities is measured through service delivery, service cost, information transparency and regulatory power for the equity of public funds. Service costs are recognised to be paid on the basis of fees and taxes as are charged or applied according to the policies of entities operating in public sector. Funds are also generated through indirect taxes in accordance with the operations of public entities. Service delivery comprises direct and indirect services. Transportation infrastructure, health and education are identified as direct services and on the other hand, indirect services consist of management of human capital and stewardship in finance. Regulatory power and policies of the public entities are used for the development as well as management of the activities performed in a society. The important of auditing in public entities can be depended on the fact relating to sharing of information. Information sharing through better access to records and data of public sector can be a significant consideration for making decision in a transparent manner (The Institute of Internal Auditors, 2012). Respectively, operations of public sector entities are needed to be managed by audit firms, so that accounting information relating to public funds is managed substantially. In this context, audit activities in public entities have certain requirement that include organisational independence, competent leadership, stakeholder support, unrestricted access, competent staff and adherence of audit standards. Correspondingly, auditors performing auditing operations in public sector are able to ascertain that auditing operations are executed in a coordinated and appropriate manner. Contextually, audit firms performing assessment of internal operations of public entities are able to ensure that public funds are managed and citizens have confidence over public entities (MRicky, 2010). Conclusion From the above discussion, it can be comprehended that auditing activities in public sector is a key part for good governance and is crucial for maintaining right resources in a right time with a mandate for achieving the goals and objectives in relation to the management of public funds. Performance of audit activities in the management of public funds has a scope for developing confidence of citizens towards public entities. Management of public funds is an important consideration for the sustainability of public sector. In this respect, public funds are needed to be assessed and monitored on a continuous basis with the aim of ascertaining that transparency is maintained within operations and corrupt practices are mitigated. For the management of public funds, audit firms are identified to play an important role towards the development as well as governance of public entities. Public audit activities increase expectation of stakeholders in reporting, transparency and governance in public funds. Auditing firms review financial statement for maintaining good governance. The impact of auditing activities has on accountability, transparency, integrity, and equity in the areas which are essential for the development of the public entities in relation to public funds. References Bouckaert, G. (2008). Internal Audit Trends in the Public Sector. Public Management Institute, 1-10 Harris, S. B. (2011). The future of government involvement in public accounting. Retrieved from http://pcaobus.org/News/Speech/Pages/10252011_HarrisSpeech.aspx MRicky. (2010). Auditing in the public interest. Parliament’s Auditor-Role and Perspectives, 1-25. The Institute of Internal Auditors. (2012). The role of auditing in public sector governance. Public Sector Governance, 3-26. Read More