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Auditing in the Public Sector - Essay Example

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Auditing in the Public Sector

Auditors often provide added value by noting an opportunity for cost-efficient improvements which may arise from the auditors' investigation and bring these issues to the attention of the management. Thus, it is expected that public auditors should endeavor to promote better decision making and management wherever possible, in order to effect a more efficient use of public resources.
Proper auditing in the public sector is essential for maintaining the confidence of the general public during any tenure of managing public funds, and should be carried out to ensure accountability of those entrusted with public funds. On their own part, Malaysian public sector auditors should be accountable for their performance, and it is the duty of public sector auditors to undertake their auditing work in an objective, cost-effective and professional manner, with due regard to the needs of the public sector bodies that they audit. The primary audience of the public sector auditors includes the local electorates, the taxpayers and the parliament, as their statutory functions are executed on behalf of the taxpayers. It is essential for public sector auditors to thoroughly plan each audit with a good understanding of the operational environment.
The major value of financial statement auditing comes from the assurance provided to taxpayers due to objective and rigorous auditing. The service provided by public sector auditors also provides value by causing an improvement of financial management. It is important for auditors to endeavor to promote better decision making and management whenever possible, so as to enable better and more effective use of public resources (Kamaruzaman Jusoff 2010). This can be achieved by the dissemination and highlighting of good practice and the provision of technical assistance which will help to promote efficiency in corporate governance arrangements in the public sector in Malaysia. As set down by the statement of auditing 100, "professional auditors are required to observe the ethical guidance of the particular professional bodies to which they belong" (The statement of auditing 100). "The uniform accounting system for Government organizations sets out reporting requirements" (Rohana Othman, Husein Zakaria, Norlaili Nordin, Zamzam Shahidan and Kamaruzaman Jusoff 2010) and there are also some specific ethical issues in public sector auditing. "Public sector bodies are required to maintain a high standard of probity in the execution and management of their affairs. These include the 7 principles of public life which are integrity, selflessness, openness, accountability, objectivity, honesty and leadership." (Committee on standards in Public Leadership, 2003) Another service to be expected from public sector auditors is that public sector auditors must seek to ensure that the reports they produce for the public are clear, objective, reliable, persuasive, and balanced in content. The work of public sector auditors should also be provided to the audited public sector bodies through the auditing process, and "the auditors should furnish the public sector bodies with drafts of reports about them that are intended for publication, and give them opportunities and sufficient time to agree the facts contained within them and comment on the opinions reached." ...Show more


This paper will discuss the service that public sector bodies may expect to receive from auditors in Malaysia. The paper will investigate how value can be added by reporting in a fair and appropriate manner, how mutual understanding can be achieved in the planning process and observing professional ethics…
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Auditing in the Public Sector essay example
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