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Centre for Financial and Management Studies (CeFiMS)

Public Financial Management: Reporting & Audit

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This course covers the important topic of accounting and accountability. Accounting has traditionally been seen as highly technical and of interest only to accountants, but it is a vital area for all citizens and public sector managers and professionals to understand, at least in broad terms. It is the core part of governance, which has gained such importance in recent years, especially in developing countries. Civil society organisations have also recognised the importance of public finance, with many of them now being active in the area of budget analysis. It is also an area of considerable political controversy.

Studying this course will enable you to gain a broad understanding of the area, to appreciate the major current debates, to allow you to review and understand the accounts and financial statements produced by governments and other public entities, and to understand the role and scope of audit in the public sector. We have developed this course in association with the Association of Certified Chartered Accountants (ACCA).


Study Guide

You will receive a looseleaf binder containing eight 'course units'. The units are carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the further assigned readings. The unit files are also available to download from the Online Study Centre.

Textbooks and Reports

IMF (2001) Government Financial Statistics Manual, Washington, DC: IMF

HM Treasury (2004) Managing Resources – Case Studies (the Orange Book)

S. Schiavo-Campo and D. Tommasi (1999) Managing Government Expenditure, Asian Development Bank. 


You will receive three volumes of Readings, which contain articles and reports particularly from the major regulatory bodies in this field to supplement the information provided in the textbooks and the Study Guide.

Online Study Centre

You will have access to the OSC, which is a web-accessed learning environment. Via the OSC, you can communicate with your assigned academic tutor, administrators and other students on the course using discussion forums. The OSC also provides access to the course Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Objectives and learning outcomes of the course

By the end of the course, students should be:

  • able to appreciate current practice;
  • aware of the main debates over public sector reporting and audit reform;
  • able to undertake a high-level interpretation of a set of public sector financial statements produced on either the cash or the accrual basis.

Scope and syllabus

Course Units
Unit 1: Introduction to Public Sector Accounting
  • 1.1 Introduction
  • 1.2 Accounting in the Private Sector
  • 1.3 Differences Between the Private Sector and the Public Sector
  • 1.4 Structure of the Public Sector
  • 1.5 Public Sector Accounting
  • 1.6 Conclusion and Summary
Unit 2: Accounting Bases and Standards
  • 2.1 The Nature of Public Sector Entities
  • 2.2 What is Public Financial Management?
  • 2.3 The Accounting Bases for Public Sector Financial Reporting
  • 2.4 Workflow and the Accounting Base
  • 2.5 The Accrual Basis of Accounting in the Public Sector
  • 2.6 The Arguments for Accrual Accounting for National Government Financial Statements
  • 2.7 Conclusions and Summary
Unit 3: International Public Sector Accounting Standards Board (IPSASB) and the Cash Basis Standard
  • 3.1 The Origins and Role of the International Public Sector Accounting Standards Board
  • 3.2 Origins of IFAC's Public Sector Committee
  • 3.3 Establishment of the International Public Sector Accounting Standards Board
  • 3.4 Status of the International Public Sector Accounting Standards
  • 3.5 Financial Reporting under the Cash Basis of Accounting
  • 3.6 The Cash Basis IPSAS and the Relevance of Consolidated Accounts for the Public Sector
  • 3.7 Accounting for International Aid
  • 3.8 Budget Reporting Standards
  • 3.9 Summary and Conclusions
Unit 4: International Accrual-Based Accounting Standards for the Public Sector
  • 4.1 Application of IFRS to the Public Sector
  • 4.2 IPSAS 1 to 21 - Definitions and Broad Principles
  • 4.3 Interpretation of Financial Statements Based on the IPSAS
  • 4.4 Summary and Conclusions
Unit 5: Developing Public Sector Accounting Standards
  • 5.1 Introduction
  • 5.2 Taxation
  • 5.3 Pensions - Employees
  • 5.4 Social Policy Obligations - State Pensions
  • 5.5 PFI and PPP
  • 5.6 Heritage Assets
  • 5.7 Summary and Conclusions
Unit 6: Public Financial Management Benchmarks and Review
  • 6.1 Wider Public Financial Management Benchmarks
  • 6.2 Statistical Reporting Systems
  • 6.3 IMF Government Finance Statistics and Code of Transparency
  • 6.4 PEFA Benchmark for Public Financial Management
  • 6.5 National Accounting Standards
  • 6.6 Summary and Conclusions
Unit 7: Public Sector Audit - Standards and Guidance
  • 7.1 The Roles and Scope of Public Sector Audit
  • 7.2 The Process of Public Sector Audit
  • 7.3 Standards and Guidance for Audit in the Public sector
  • 7.4 Public Expenditure and Financial Accountability (PEFA) - Performance Measurement Framework
  • 7.5 Summary and Conclusions
Unit 8: Public Sector Audit - Practice
  • 8.1 Independence and the Auditor-General
  • 8.2 Organisation of a Supreme Audit Institution
  • 8.3 Audit Sampling
  • 8.4 Audit Reporting
  • 8.5 Value for Money (Performance) Audit
  • 8.6 Audit of IT and Information Systems
  • 8.7 Environmental Audit
  • 8.8 Summary and Conclusions

Method of assessment

You will complete two assignments, which will be marked by your course tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 5, and the second assignment at the end of the course, on the Tuesday after Week 8. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Online Study Centre. You will also sit a three-hour examination on a specified date in October, worth 70% of your total mark. An up-to-date timetable of examinations is published in April of each year.