A17 Government Audit and

Financial Statement Audit

Lao, Severino, Sian

Facts of the Case

A17 Government Audit and Financial Statement Audit

A17
Wil Stevens is an executive vice president of a major automobile manuf
acturing company. Recently, Stevens was elected mayor of the City of
Manila, Prior to assuming office, he calls on you, his independent audit
or, for advice . He asks you to explain the major similarities and differen
ces between a financial audit for a large city and a financial statement o
pinion audit for an industrial corporation.

Facts of the Case

Required Questions
A17 Government Audit and Financial Statement Audit

Required A
a. Describe the major similarities and differences between a governmental financi
al audit and a financial statement opinion audit of a business enterprise.

Required B
b. What government agency is tasked to perform government audit? What are the
functions of the said agency and its employees in performing government audit?

Required C
c. What is the significance of government audit?

Required

Required A
a. Describe the major similarities and differences between a governmental financial audit
and a financial statement opinion audit of a business enterprise.

Audits are based on standards

Deals with the fairness of financial st
atement presentation

Similarities

Differences

FS OPINION
AUDIT

GOVERNMENT
AUDIT

STANDARD GAAS
S USED

GAAS and
GAGAS

SCOPE

ONE entity only

Diff.
government
agencies

REPORT

Independent
auditors report

More elaborate
reports

Required A

Required B
b. What government agency is tasked to perform government audit? What are the fu
nctions of the said agency and its employees in performing government audit?

Commission on Audit
It has the primary function to examin
e, audit and settle all accounts and e
xpenditures of the funds and proper
ties of the Philippine government

Function 2
Examine, audit and settle all accoun
ts relating to the revenue and receip
ts of, and expenditures or uses of fu
nds and property owned or held in tr
ust by, or pertaining to, the governm
ent

Function 1
Promulgate accounting and auditing rul
es and regulations (prevention and disa
llowance of irregular, unnecessary, exce
ssive, extravagant or unconscionable ex
penditures, or uses of government fund
s and properties)

Function 3
Submit annual reports to the Preside
nt and the Congress on the financial
condition and operation of the gover
nment

Required B

Required C
c. What is the significance of government audit?

Provided by law
Perform other duties and functi
ons which may be provided by l
aw.
Keeping general accounts
Keep the general accounts of government and p
reserve the vouchers and supporting papers pert
aining to them.

Recommendation
Recommend measures to improve e
fficiency and effectiveness of operati
ons.

01

02

03

Required C