Government Auditors

This topic introduces students to the activities of government auditors. This topic also discussed operational auditing since government auditors as well as CA firms also involved in this engagement.

GOVERNMENTAL FINANCIAL AUDITING

In Malaysia, the Auditor General Office or the Jabatan Audit Negara (JAN) staff act as the external auditors to Malaysian government departments and agencies. Some of these staff is also seconded to serve as internal auditors in the government departments and agencies. However, approximately 80% of audits of governmental audits are still contracted out to Certified Accountant (CA) firms since in Malaysia CA firms still do governmental financial auditing.

Audit Manual is the primary source of authoritative literature for the performance of government audits. This is issued by the Auditor General Office and is widely used reference by all Malaysian government auditors and CA auditors. Audit manual describe financial auditing as audits of financial statements of governmental units, government contracts and grants, internal control, fraud, and other noncompliance with laws and regulations.

12.1.1 Audit Act 1957

Now, we will look into the Audit Act 1957 which provides the responsibility of the Auditor General to audit several accounts is shown in Figure 12.1.

Figure 12.1: Audit Act 1957 provides the responsibility of the auditor general to audit several accounts

The Act also requires the recipient of federal financial assistance should also be audited. This include company registered under the Companies Act 1965 which has more than half of its paid-up capital held by the Federal Government, state or public authority. However, the audit can be performed by the government auditors or by ...

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...nal audits than for financial audits because accuracy is not the purpose of most operational audits.

Reporting and Follow-Up

• The audit report is usually sent only to management for operational auditing, with a copy to the unit being audited.

• Each report will address the scope of the audit, findings, and recommendations.

• Follow-up is common in operational auditing when recommendations are made to management. The purpose is to determine whether the recommended changes were made, and if not, why.

• This topic discussed government auditors and the auditing and reporting requirements under government auditing standards.

• Operational audits of the efficiency or effectiveness of a company or government unit is also discussed since internal auditors, governmental auditors and CA firms are also increasingly asked to perform this audit engagement.