- 10 Marks
AA – L2 – Q13 – Audit of Public Sector Entities
Question
Public Sector Auditing
Identify the key differences between audits in the private sector and audits in the public sector in Ghana.
Answer
Public Sector Auditing
Key differences between private and public sector auditing in Ghana are as follows:
| Private sector auditing | Public sector auditing |
|---|---|
| Auditors report to shareholders. | Auditors report to legislative or oversight bodies, or those charged with governance of the audited entity, or the general public. |
| The financial reporting framework is International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). | The financial reporting framework is International Public Sector Accounting Standards (IPSAS) published by the International Public Sector Accounting Standards Board (IPSASB). |
| Financial statements are audited using International Standards on Auditing (ISAs) which are published by the International Auditing and Assurance Standards Board (IAASB). | Financial statements are audited using ISSAIs (International Standards of Supreme Audit Institutions) which are published by the International Organization of Supreme Audit Institutions (INTOSAI). |
| Audits are performed by firms in the private sector. | Audits are performed by the Ghana Audit Service. |
| Auditors report on whether the financial statements are true and fair (financial audit). | Auditors report on whether the financial statements are true and fair (financial audit). They also carry out compliance audits (to check government policies are being followed) and performance audits (which look at the efficiency and effectiveness of how the public entity has spent their funds and whether this can be improved). |
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