Public Financial Management: Audit and Compliance
- Module Code:
- Year of study:
- Year 1
Audit is an evolving function in the public sector. It has evolved from simply checking that money has been spent in the ways that governments intended and ensuring that none was stolen or misappropriated. Now it is also concerned with evaluating whether the application of funds represents good value for the taxpayer and, more recently, to evaluating whether government policies have been effective. The early functions of audit (i.e the detection of fraud and technical errors in accounting) still remain but have now been overlain with new, more evaluative, functions.
The institutions carrying out audit have also evolved. All governments have some form of national auditing body or Supreme Audit Institution. These institutions are often very old, but some, such as China’s Audit Administration, established in 1983, are more recent. As with the evolution of the audit function, these national audit bodies have also expanded their role over time, and many, as you will see in this module, now include policy evaluation in their remit. At the same time, there is internal audit, offering an independent assessment of an organisation’s risk management, control and governance processes.
Objectives and learning outcomes of the module
On successful completion of this course a student will be able to:
- Describe the role of the external auditor within the public sector
- Explain the requirements for internal audit within public sector organisations, and how it is different from external audit
- Distinguish between the public sector and private sector models
- Outline the corporate governance requirements and their applicability to the public sector
- Discuss how the different aspects of governance impact on audit activity
- Carry out an assessment of risk and be able to measure and manage it, and provide assurance to management
- Explain the role of forensic accounting within the organisation
- Discuss the role, purpose and importance of value-for-money audits
- Explain the contribution of audit to policy evaluation
- Analyse the key stages of the contract audit process taking a systems-based approach
- Assess the issues arising from outsourcing and their contractual importance
- Discuss the potential for citizen involvement in audit
This module consists of a 1-hour weekly lecture over 10 weeks of term plus a revision lecture in term 3 as preparation for the final examination. Students will be supplied with a syllabus with a breakdown week by week of required and additional reading. Reading materials are usually accessed electronically from the BLE and students should come to class prepared.
This module also has a weekly 1-hour tutorial where the questions posed by the tutor relevant to the lecture are explored and discussed by the students. Students also prepare and deliver a short presentation.
Total Work load:
Students on this module will have 2 taught hours each week. Additionally, adequate personal study time should be allocated for reading and class preparation.
Method of assessment
Assessment for this module is in three elements:
- One tutorial presentation at 10%
- One essay of 2,500 words at 30%
- One unseen 2-hour written examination at 60%
All elements except the presentation may be resubmitted.