PUBLIC SECTOR AUDITING - NEW OPPORTUNITIES FOR CPAS (CERTIFIED PUBLIC ACCOUNTANTS)

• NCJ Number: 64654
• Journal: Journal of Accountancy Volume: 145 Issue: 3 Dated: (MARCH 1978) Pages: 48-54
• Author(s): F POMERANZ
• Date Published: 1978
• Length: 7 pages
• Corporate Author: American Institute of Certified Public Accountants
• Publication Format: Article
• Publication Type: Program/Project Evaluation
• Language: English
• Country: United States of America

Annotation

DEVELOPMENTS IN GOVERNMENT AUDITING AND TECHNIQUES WHICH MAY HELP PUBLIC ACCOUNTANTS IN THEIR REVIEWS OF GOVERNMENT PROGRAMS ARE EXAMINED.

Abstract

RAPID GROWTH IN PUBLIC-SECTOR SPENDING AND GROWING REQUIREMENTS FOR ACCOUNTABILITY ARE OPENING NEW OPPORTUNITIES FOR PUBLIC ACCOUNTANTS. IN 1972, THE GENERAL ACCOUNTING OFFICE ISSUED STANDARDS FOR AUDITS OF GOVERNMENT PROGRAMS AND ACTIVITIES. THE STANDARDS' GOAL IS TO IMPROVE AUDITING AT ALL LEVELS OF GOVERNMENT. THE STANDARDS INCORPORATE THE GENERALLY ACCEPTED AUDITING STANDARDS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS. THEY ALSO EXPAND THE DEFINITION OF AUDITING TO INCLUDE COMPLIANCE WITH LAWS AND TO MEASURE PROGRAM EFFICIENCY, ECONOMY, AND EFFECTIVENESS. THE STANDARDS INCLUDE THREE AUDIT LEVELS. LEVEL ONE INCLUDES BASIC FINANCIAL AUDIT AND TESTING FOR COMPLIANCE WITH LAWS AND REGULATIONS. LEVEL TWO INCLUDES TESTING FOR EFFICIENCY AND ECONOMY. LEVEL THREE CALLS FOR EVALUATION OF PROGRAM RESULTS BY MEASURING EFFECTIVENESS IN ACHIEVING SPECIFIC GOALS. LEVEL THREE REPRESENTS THE MOST DRAMATIC CHANGE IN THE NATURE OF AUDITING. THE U.S. COMPTROLLER GENERAL EXPECTS THE FOLLOWING FUTURE DEVELOPMENTS: (1) COOPERATIVE AUDITS OF LARGE PROGRAMS BY ALL LEVELS OF GOVERNMENTS; (2) FINANCIAL AUDITS OF ALL GRANTS, COUPLED WITH LEVELS TWO AND THREE AUDITS OF STATISTICAL SAMPLES OF AUDITS; AND (3) REGULAR CONSIDERATION OF AUDIT REPORTS BY LEGISLATORS PRIOR TO PROGRAM REAUTHORIZATION. FOR LEVEL ONE AUDITS, INSTRUCTIONS ARE USUALLY CONTAINED IN AUDIT GUIDES ISSUED BY AGENCIES INVOLVED. A REFERENCE BOOK PRESENTING PREFERRED PRACTICES WILL AID THE LEVEL TWO AUDIT. A LEVEL THREE AUDIT INCLUDES EVALUATION OF MEASUREMENT CRITERIA AND OF SUCCESS IN ACCOMPLISHING INTENDED RESULTS. AN AUDIT OF ONE STATE'S HEALTH CARE PROGRAM ILLUSTRATES THE POTENTIAL BENEFITS OF LEVEL THREE AUDITS. PROPOSED LEGISLATION WOULD ESTABLISH INSPECTOR GENERAL OFFICES IN CERTAIN DEPARTMENTS. FOOTNOTES AND A BIBLIOGRAPHY ARE INCLUDED. (CFW)