AUDITING IN THE PUBLIC SECTOR: WHAT DOES IT MEAN?

Auditing is an independent appraisal procedure for analyzing, researching, and confirming an organization’s financial statements by a competently authorized individual, which is frequently governed by statute.

It is the process of studying and evaluating records that are meant to illustrate the financial state and outcome of operations in order to offer a foundation for an opinion on the records’ credibility and authenticity.

An audit aims to form a judgment on the truth, accuracy, validity, dependability, and fairness (or lack thereof) of the statements and the underlying records on which the statements are based, as well as whether they meet any statutory or other requirements.

In the public sector, auditing is the process by which the legislature holds the executive branch accountable. As a result, it acts as a watchdog for accountability, with the task of investigating and reporting on the responsibility assumed by executives, as well as whether the executives’ report on the discharge of obligation is accurate.

What is the main difference between public sector auditing and private sector auditing?

	PUBLIC SECTOR AUDITING	PRIVATE SECTOR AUDITING
APPOINTMENT	The government appoints the public sector auditor, often known as the auditor general, in accordance with Ghanaian law and the Ghana Audit Act, 2000.	The Ghana Companies Code 1963, Act 179, provides for the appointment of a private sector auditor by the shareholders at the annual general meeting.
Legal and ethical basis of operations.	Ghana’s constitution, finance administrative act, Ghana Audit Act, 2000, and International Organization of Supreme Audit Institutions Auditing Standard	Ghana companies Code, International Accounting Standards, International Auditing Standard.
Audit Approach	Financial and Operational Audit, Value for money Audit	System bases audit Risk base Audit
Remuneration	Under the provisions of Ghana’s 1992 Constitution, the parliament decides. The Auditor General’s compensation is deducted from the consolidated fund.	Determine by the shareholders and is treated as part of administrative expenditure.

AUDITING IN THE PUBLIC SECTOR OBJECTIVES

The fundamental goal of public sector audit is to ensure that government departments, ministries, and agencies are operating and accounting for their performance in line with the Act of Parliament, relevant rules, and the public interest.

The following three sub-objectives must be met in order to fulfil these primary goals:

Compliance with the law and regulations

To reassure parliament that the government reporting organization’s transactions complied with the appropriation law and, more precisely, the regulations established for the organization’s concern

Reliability

To reassure parliament that the reported accounting resulting from organizational transactions with the allotted fund is accurate.

Money well spent

To determine the degree of economy, efficiency, and effectiveness that emerged from the organization’s utilization of the resources it was allocated.

The audit work of the external auditors helps the parliament achieve these goals. The Ghana Audit Service, a government audit body, is primarily responsible for this in Ghana.