13.2 Objective and scope of public sector audit (compliance, performance, financial, value for money)

July 2, 2023

The objective and scope of public sector audit encompass various aspects, including compliance, performance, financial, and value for money audits. Here’s a breakdown of each type:

Compliance Audit:
- Objective: The objective of a compliance audit in the public sector is to assess the extent to which government entities comply with laws, regulations, policies, and procedures.
- Scope: Compliance audits focus on verifying whether public sector entities have followed applicable rules and guidelines, such as financial regulations, procurement laws, and statutory requirements.
Performance Audit:
- Objective: Performance audits aim to evaluate the economy, efficiency, effectiveness, and equity of government programs, activities, or operations.
- Scope: Performance audits assess the achievement of objectives, the utilization of resources, the effectiveness of service delivery, and the impact of government initiatives. They may examine issues such as program effectiveness, cost-effectiveness, and the management of risks and controls.
Financial Audit:
- Objective: Financial audits in the public sector are conducted to provide an opinion on the fairness and reliability of financial statements.
- Scope: Financial audits involve the examination of financial records, transactions, and controls to ensure that the financial statements of government entities present a true and fair view of their financial position, results of operations, and cash flows.
Value for Money Audit:
- Objective: Value for money audits seek to determine whether government entities have obtained the best possible outcomes in terms of economy, efficiency, and effectiveness in the use of resources.
- Scope: Value for money audits assess whether public funds have been used efficiently, whether goods and services have been acquired economically, and whether government programs and initiatives have achieved their intended outcomes.