CPFM Module II
Public Sector Audit and Assurance cheat sheet
Every chapter's key points, formulas and definitions on one page, for the last week before the exam. Each heading links to the chapter that explains it.
Introduction to public sector audit and assurance
- An audit is an independent examination of financial or operational information to express an opinion on it, and it is the highest level of assurance a practitioner can give.
- Materiality is the threshold at which a misstatement or omission could reasonably influence users' decisions; audit risk is the risk of expressing an inappropriate opinion when the information is materially misstated.
- Audits are classified as financial (statutory), internal, performance, compliance and forensic, and each answers a different question.
- Public sector auditors give independent assurance that public resources were raised and used lawfully, effectively and for their intended purpose.
- That assurance supports an accountability chain running from accounting officers, through internal audit and audit committees, to the Auditor-General and Parliament.
Key terms
- Audit
- An independent examination of financial or operational information to express an opinion on it.
- Assurance
- The confidence a user can place in a conclusion reached by an independent practitioner, of which an audit is the highest level.
- Materiality
- The threshold at which a misstatement or omission could reasonably influence the decisions of users relying on the information.
- Audit evidence
- The information an auditor gathers to support their conclusions.
- Audit risk
- The risk that an auditor expresses an inappropriate opinion when the information is materially misstated.
- Financial (statutory) audit
- Examines whether financial statements present a true and fair view.
- Internal audit
- An entity's own independent, ongoing assurance and consulting function (see the chapter on internal audit).
- Performance audit
- Examines economy, efficiency and effectiveness of operations (see performance audits, later in this guide).
- Compliance audit
- Examines adherence to laws, regulations and policies.
- Forensic audit
- Investigates suspected fraud or financial impropriety (see the chapter on forensic auditing).
The rest of the sheet covers
- The legal framework of public sector auditing
- Internal audit in the public sector
- Forensic auditing
- The office of the auditor-general
- Parliament as an oversight body for public institutions
- Management of audit committees in public sector institutions
- Audit recommendations and other types of audits
- Computerised auditing systems
- Exam technique and revision
- Glossary