Role of Auditor in Public Sector Essay Example | Topics and Well Written Essays - 2000 words

Role of Auditor in Public Sector - Essay Example It can exist in the form of direct administration through tax systems; it can also be represented by publicly owned enterprises, which have more commercial freedom. Nowadays the role of audit and audit committees in public sector plays greater and greater role. Audit is the check of accountant documentation to prove its authenticity. But in more general sense audit is just a check of any phenomenon or activity by an independent expert, who is called auditor. Speaking about the statutory role of auditor in the public sector it should be said that there is an ethic codex for the auditors in public sector. And here we will refer to this codex as the brightest statutory document which singles out the main features of auditors in public sector. An ethic codex is a detailed official list of values and principles which auditors should use as ruling in their activity. There are high demands towards auditors in public sector. The behavior of an auditor must always remain above any suspicion. The wrong behavior presents all auditors in the disadvantageous light. Honesty is the basic demand of the ethic codex. Auditors must keep to the high and worthy standards of behavior in the process of work and their relations with the checking organizations. Auditors are also to support the public trust. There are recommendations as for using auditors in checking any enterprises of public sector. And any government body should choose an audit organization to maintain and fulfill the financial oversight. The system of financial control and reporting can be increased and strengthened through using an effective audit. This can also make the audit process more integral. According to Mayhew, 'auditor is an integral part of public accountability and governance. He plays a crucial role in making all financial processes and documentation integral, and also directing the system of internal control and the control of employee management.' (Mayhew, 2001) The role of an auditor depends on the size, sphere and kind of activity of the specific establishment. The main functions of the auditor in the public sector are: approving the general audit scope, financial planning, performing audit in a cost-effective manner. Risk management is also another function of the auditor. There are the three main features which should be peculiar of the auditor in order to fulfill the necessary functions in the public sector. The first of them is independence. In the public sector, the structure of entities does not separate the governing authority and oversight responsibility from the day-to-day management. For example, a public university president may be both the chief executive officer and a board member. (Hollingsworth, 1999) The auditor must be independent, and he must provide the necessary processes for supporting this independence. He is an independent expert, first of all. Communication is another trait of auditor. He must be capable