42'490 Class Number Six

1
42.490 Class Number Six

• Objectives of This Class
• Public Sector/Comprehensive Auditing (PSAAC)

2
PSAAC

• The Public Sector Accounting and Auditing
  Committee (PSAAC) was established in March 1981
  by the Board of Governors of The Canadian
  Institute of Chartered Accountants (CICA)
• Mandate is to develop public sector accounting
  and audit theory, practice and literature
• For purposes of applying the Committees
  Recommendations, Public Sector refers to
  Federal, Provincial, Territorial and local
  government entities, such as government funds,
  agencies and corporations.

3
Why PSAAC?

• Public sector employs resources to achieve a
  variety of social and economic goals, therefore,
  F/S users are interested in information relating
  to
• compliance with legislation and related
  authorities
• accounting for and safeguarding assets
• adequacy of management control systems
• economy and efficiency in the administration of
  resources and
• effectiveness of programs.

4
Comprehensive Audits

• Comprehensive audits cover all three areas of
  interest to public sector F/S users
• financial statements (performance)
• compliance
• value for money
• In general terms, comprehensive auditing is
  concerned with accountability for the discharge
  of assigned responsibilities.

5
Public SectorFinancial Statements

• The objective of an audit of F/S is to express an
  opinion as to whether the F/S are presented
  fairly in accordance with an appropriate
  disclosed basis of accounting. Because the audit
  objective is the same, the standards for audit
  should be the same. Therefore, GAAS still
  applies to audits of the F/S of governments and
  other public sector entities.

6
Planning the VFM Audit

• Auditing Guideline 1 discusses planning
  considerations related to the following elements
  of VFM audit planning
• the audit mandate
• knowledge of the entity (further details in
  Auditing Guideline 2)
• audit objectives and scope (including
  significance and risk)
• criteria to evaluate against
• audit evidence (nature, source and availability)
• audit plan (documenting key information and
  decisions)

7
Knowledge of the Entity

• Auditing Guideline 2 deals with obtaining
  information on the entity, its environment and
  its interrelationships
• Nature of the entity
• Accountability relationships
• Programs, operations and activities
• Performance
• Resources
• Systems, controls and practices
• Government priorities
• Risks
• Constraints and
• Constituents.