Topic: Public Sector Auditing

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  • 10 Marks

AA – Nov 2024 – L2 – Q5c – General Principles of Public Sector Auditing

Explain five general principles of public sector auditing under ISSAI.

There are general principles that guide the practice of auditing in the public sector in accordance with International Standards of Supreme Audit Institutions (ISSAI). The principles of auditing are not very different from auditing and assurance in the private sector.

Required:
In relation to the statement above, explain FIVE general principles of public sector audit.

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  • 20 Marks

PSAF – Nov 2014 – L2 – Q3 – Public Sector Audit

Explanation of financial fraud types and calculation of revenue loss within EFCC operations.

Fraud is described as an intentional act involving deception to obtain an unjust or illegal advantage. It involves the presentation of a statement or representation made recklessly or without the belief in the truth or suppression of facts.

The Economic and Financial Crime Commission (EFCC) is a criminal investigation organisation in charge of investigating financial crimes involving politicians, economic saboteurs, and electoral fraudsters. EFCC’s “modus operandi” is such that any suspect or ‘accused’ must deposit all his money and other belongings with the exhibit section headed by Mr. Oripipe, a cashier, who is expected to pay all cash receipts collected by him to the Banking officer. The banking officer issues a revenue receipt to the Cashier.

Mrs. Innocent, the resident auditor, conducted a physical cash survey and discovered that the total amount on the duplicate receipt book with the banking officer is N4,550,000, which does not agree with the actual cash paid in. It was suspected that the organisation has been defrauded.

The following information relates to the deposits collected from January to December 2013:

  1. Cash from Honourable Talaka: N12,500
  2. Cash from a container with five suitcases, each containing N250,000: N1,250,000
  3. Cash recovered from Anine, a criminal that raided Ifako bank: N4,000,000
  4. Cash sales of impounded lace: N425,000
  5. Five boxes containing consumable items earlier disposed of for N16,000, mistakenly kept in Mr. Oripipe’s drawer, were later discovered by the auditor.
  6. On investigation, it was discovered that the banking officer was illegally removing N500 from every N2,500 paid to him by the cashier.

Required:

a. Explain briefly FOUR types of financial fraud. (4 Marks)

b. Prepare the correct statement of deposits from detainees as it should be in Mr. Oripipe’s records and identify the shortfall due to his negligence. (10 Marks)

c. Calculate the amount of cash lost by the government as a result of the fraud. (6 Marks)

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  • 10 Marks

AA – July 2023 – L2 – Q4b – Internal Audit and Its Relationship with External Audit, Public Sector Auditing

Short notes on value for money audit and best value audit in public sector auditing.

b) Modern approach to Internal Auditing has broadened the scope of the function of the Internal Audit. The focus has shifted from pure financial audit to cover other important areas of operation. These include performance audit, Value for Money audit, and performance information audit.

Required:
Write short notes on the following:
i) Value for money audit. (5 marks)
ii) Best value audit. (5 marks)

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  • 10 Marks

AA – May 2016 – L2 – Q5b – Public Sector Auditing

This question identifies operational strengths in Okunka hospital and suggests ways to improve value for money.

(b) Okunka hospital is located in a country where healthcare is free, as the taxpayers fund state-owned hospitals. Two years ago, management reviewed all aspects of the hospital’s operations and instigated several measures aimed at improving overall ‘value for money’ for the local community. Management has asked you, an audit manager in the hospital’s internal audit department, to perform a review over the measures which have been implemented.

Required:

(i) Identify and explain FOUR strengths within Okunka’s operating environment. (6 marks)

(ii) For each strength identified, describe how Okunka might make further improvements to provide best value for money. (4 marks)

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  • 10 Marks

AA – Nov 2024 – L2 – Q5c – General Principles of Public Sector Auditing

Explain five general principles of public sector auditing under ISSAI.

There are general principles that guide the practice of auditing in the public sector in accordance with International Standards of Supreme Audit Institutions (ISSAI). The principles of auditing are not very different from auditing and assurance in the private sector.

Required:
In relation to the statement above, explain FIVE general principles of public sector audit.

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  • 20 Marks

PSAF – Nov 2014 – L2 – Q3 – Public Sector Audit

Explanation of financial fraud types and calculation of revenue loss within EFCC operations.

Fraud is described as an intentional act involving deception to obtain an unjust or illegal advantage. It involves the presentation of a statement or representation made recklessly or without the belief in the truth or suppression of facts.

The Economic and Financial Crime Commission (EFCC) is a criminal investigation organisation in charge of investigating financial crimes involving politicians, economic saboteurs, and electoral fraudsters. EFCC’s “modus operandi” is such that any suspect or ‘accused’ must deposit all his money and other belongings with the exhibit section headed by Mr. Oripipe, a cashier, who is expected to pay all cash receipts collected by him to the Banking officer. The banking officer issues a revenue receipt to the Cashier.

Mrs. Innocent, the resident auditor, conducted a physical cash survey and discovered that the total amount on the duplicate receipt book with the banking officer is N4,550,000, which does not agree with the actual cash paid in. It was suspected that the organisation has been defrauded.

The following information relates to the deposits collected from January to December 2013:

  1. Cash from Honourable Talaka: N12,500
  2. Cash from a container with five suitcases, each containing N250,000: N1,250,000
  3. Cash recovered from Anine, a criminal that raided Ifako bank: N4,000,000
  4. Cash sales of impounded lace: N425,000
  5. Five boxes containing consumable items earlier disposed of for N16,000, mistakenly kept in Mr. Oripipe’s drawer, were later discovered by the auditor.
  6. On investigation, it was discovered that the banking officer was illegally removing N500 from every N2,500 paid to him by the cashier.

Required:

a. Explain briefly FOUR types of financial fraud. (4 Marks)

b. Prepare the correct statement of deposits from detainees as it should be in Mr. Oripipe’s records and identify the shortfall due to his negligence. (10 Marks)

c. Calculate the amount of cash lost by the government as a result of the fraud. (6 Marks)

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  • 10 Marks

AA – July 2023 – L2 – Q4b – Internal Audit and Its Relationship with External Audit, Public Sector Auditing

Short notes on value for money audit and best value audit in public sector auditing.

b) Modern approach to Internal Auditing has broadened the scope of the function of the Internal Audit. The focus has shifted from pure financial audit to cover other important areas of operation. These include performance audit, Value for Money audit, and performance information audit.

Required:
Write short notes on the following:
i) Value for money audit. (5 marks)
ii) Best value audit. (5 marks)

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  • 10 Marks

AA – May 2016 – L2 – Q5b – Public Sector Auditing

This question identifies operational strengths in Okunka hospital and suggests ways to improve value for money.

(b) Okunka hospital is located in a country where healthcare is free, as the taxpayers fund state-owned hospitals. Two years ago, management reviewed all aspects of the hospital’s operations and instigated several measures aimed at improving overall ‘value for money’ for the local community. Management has asked you, an audit manager in the hospital’s internal audit department, to perform a review over the measures which have been implemented.

Required:

(i) Identify and explain FOUR strengths within Okunka’s operating environment. (6 marks)

(ii) For each strength identified, describe how Okunka might make further improvements to provide best value for money. (4 marks)

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