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Paper PFM 22

Public Sector Audit and Assurance

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The aim of this subject is to provide the learner with the knowledge and skills required to un- dertake audit and assurance assignments in public entities. In addition, the learners will be equipped with skills to undertake forensic audits, employ audit committees and use computer- ised auditing systems.

On completion, a candidate should be able to

  • Explain key audit terminologies, classifications of audits and the role of auditors in the public sector.
  • Discuss the legal framework that guides auditing in the public sector.
  • Describe the internal audit process in the public sector.
  • Undertake a forensic audit in the public sector.
  • Explain the functions of the Office of the Auditor General (OAG).
  • Discuss the role of Parliament in the oversight of public institutions.
  • Explain the functions of audit committees in the audit of public entities.
  • Implement the recommendations of a public sector audit.
  • Undertake a public sector audit using a computerised auditing system.

Content

  1. 1

    Introduction to public sector au- dit and assurance

    Explain key audit terminologies, classifications of audits and the role of auditors in the public sector.

    1. 1.1

      Definitions and key audit terminologies

    2. 1.2

      Classification of audits and assurance

    3. 1.3

      Role of auditors in public sector entities

  2. 2

    Legal framework guiding auditing in the public sector

    Discuss the legal framework that guides auditing in the public sector.

    1. 2.1

      The Constitution

      1. f Kenya 2010

    2. 2.2

      Review of Public Financial Management Act 2012 focusing on the internal audit function

    3. 2.3

      Overview of the Public Audit Act

    4. 2.4

      Gazette notice

      1. n audit committee guidelines and procedures

    5. 2.5

      The National Treasury circulars and guidelines on matters

      1. f internal audit

  3. 3

    Internal audit in the public sector

    Describe the internal audit process in the public sector.

    1. 3.1

      Establishment and scope of the internal audit function

    2. 3.2

      Objectives and functions of the internal audit function

    3. 3.4

      The internal control system and its procedures

    4. 3.5

      Internal audit function reporting structure

    5. 3.6

      Internal audit standards and guidelines

    6. 3.7

      Qualification of and professional bodies guiding internal auditors

    7. 3.8

      International standards for the professional practice

      1. f internal auditing

    8. 3.9

      International Internal Audit Standards Board (IIASB)

    9. 3.10

      International Professional Practices Framework (IPPF)

    10. 3.11

      The role of the Public Sector Accounting Standards Board (PSASB) on matters of internal audit

    11. 3.12

      Professional code of ethics for internal auditing

  4. 4

    Definition of forensic auditing

    Undertake a forensic audit in the public sector.

    1. 4.2

      Institutional arrangements in place for fighting frauds in the public sector

    2. 4.3

      Procedures for forensic auditing

    3. 4.4

      Differences between a statutory audit and a forensic audit

    4. 4.5

      Role of forensic auditors in the public sector

    5. 4.6

      Challenges affecting forensic audits in the public sector

  5. 5

    The office of auditor general

    Explain the functions of the Office of the Auditor General (OAG).

    1. 5.1

      The establishment of the Office of the Auditor General

    2. 5.2

      The roles and functions of the Office of the Auditor General

    3. 5.3

      Appointment of the Auditor General in Kenya

    4. 5.4

      Overview of the Public Audit Act 2015

    5. 5.5

      Responsibilities

      1. f the Auditor General

    6. 5.6

      Relationship between the internal audit function and the

      1. ffice of the Auditor General

  6. 6

    Parliament as an oversight body for public institutions

    Discuss the role of Parliament in the oversight of public institutions.

    1. 6.1

      The role of Parliament as an

      1. versight body

    2. 6.2

      Parliamentary

      1. versight committees

    3. 6.3

      The role of the Office of the Auditor General

    4. 6.4

      The role of the National Treasury in relation to the parliamentary

      1. versight committees

    5. 6.5

      Challenges affecting Parliament as an oversight body

  7. 7

    Management of audit committees in public sector institutions

    Explain the functions of audit committees in the audit of public entities.

    1. 7.1

      The establishment and functions of internal audit committees

    2. 7.2

      Appointment

      1. f internal audit committees

    3. 7.3

      The scope of

      1. peration of internal audit committees

    4. 7.4

      The role of internal audit committees

  8. 8

    Audit recommendations and other types of audits

    Implement the recommendations of a public sector audit.

    1. 8.1

      Key audit recommendations from the Office of the Auditor General

    2. 8.2

      Special audits

    3. 8.3

      Performance audits

    4. 8.4

      Citizen accountability audit reports

  9. 9

    Computerised auditing Systems

    Undertake a public sector audit using a computerised auditing system.

    1. 8.1

      Introduction to computerised auditing

    2. 8.2

      Computerised audit procedures and techniques

    3. 8.3

      Application

      1. f “Teammate” in auditing processes

    4. 8.4

      Differences between auditing through the system and auditing around the system

    5. 8.5

      Challenges affecting computerised auditing systems