Audit Process in Philippine Public Fiscal Administration: Harold Ian G. Rala Bpa - 3A

AUDIT PROCESS IN PHILIPPINE PUBLIC FISCAL ADMINISTRATION
As we all know, audit process is essential in any administration, agency or
department especially in public fiscal administration. The goal of the audit
process is to promote effective program administration and financial
management, and to ensure integrity in governance. The primary purpose of
an audit is to evaluate operations with a view towards improving future
performance.
The state audit cycle consist of seven phases:
Phase I. Preliminary survey of the agency or audited entity;
Phase II. Review of the legal and policy framework within which the agency
operates, and the plans, policies, objectives, and standards it has adopted;
Phase III. Review and evaluation of the agency’s internal, and evaluation;
Phase VI. In-depth examination of critical areas, analysis, and evaluation;
Phase V. Preparation of Draft report and presentation to agency officials;
Phase VI. Finalization of report; and
Phase VII. Follow - up on the implementation of audit recommendations.
In the preliminary survey is conducted to acquire a working knowledge of the
audit agency and its legal, policy, and administrative environment. The
auditors gather general background information on the agency and its
operations after which he defines the scope of his/her audit.
HAROLD IAN G. RALA

BPA - 3A
The information gathered from the preliminary survey are reviewed in order to
obtain a general knowledge of the legislation and policies applicable to
agency objectives, policies, programs, and operating standard. In the courses
of his/her review, the auditor notes, among others, any failure on the part of
the agency exercise a delegated authority or any exercise of authority which
exceeds the limitations imposed on it. In any cases, the auditor has taken into
account the spirit or intent of the law then the auditors review the procedures
and practices actually applied by the agency in processing its transactions.
At the end of the phase, the auditor is expected to have identified any problem
areas which need further examination in detail. A draft audit report is prepared
based on the findings and recommendations formulated in the previous
phase. The report is then presented to agency officials for their review and
comments. After the meeting, the auditors finalizes the audit report, in writing
the final report, he/she has to observe certain principles or standards of report
writing. The scope of the audit should be stated clearly and concisely in the
report and any limitations should be explicitly mentioned. Audit
recommendations, such as suggested improvements, proposed adjustments
in the accounts, correction or discontinuance of malpractices, solution to exist
problems, etc. should be followed- up there is always room for improvement in
an agency’s resources which consist of manpower, material resources, and
management methods and systems it is such improvement that will lead to a
full attainment of its objectives and goals, or in other words the realization of
the 3 E’s of agency management – economy, efficiency and effectiveness.
HAROLD IAN G. RALA

BPA - 3A
Also there are many objective of state audit and all these relate to the concept
of public accountability. Public accountability is central to government audit as
it is anchored on the tenet that public officials, as stewards of public office,
must give full and public accounting of the manner with which the utilize the
power and expended the resources entrusted to them. State auditing thus
occupies as a central role in its enforcement for it must verify, examine,
evaluate, review and attest to such stewardship. Establishing accountability
for compliance with applicable laws, policies, rules and regulations is another
objective of state audit. Accountability for compliance means the
accountability of government officials to higher authorities for adherence to
laws, policies, and rules and regulations. Through financial and compliance
audits, state audits aims to determine whether public officers have utilized
their powers, authorities, and funds in accordance with legal, policy, and
elementary requirements and limitations. The specific objective of state
auditing also include the following, as enunciated in the Lima Declaration of
Guidelines on Auditing Precepts: (Annex I)
a. Proper and effective use of public funds;
b. Development of sound financial management ;
c. Orderly execution of administrative activities; and
d. Communication of information to public authorities and the public
through publication of public reports.
HAROLD IAN G. RALA

BPA - 3A
Government audit by virtue of its critical and sensitive functions is necessarily
bound by strict principles and standard of application. Audit principle and
standard serve to guide the auditor in conducting his audit with integrity,
objectivity, independence, and efficiency. Audit standards deal with the quality
with which the audit is performed based on the professional and ethical
qualifications of the auditor and his/her exercise of judgment in the course of
audit. Professional audit standards also serve as guidelines to measure the
quality of audit procedures used in the course of audit. Deviation from such
standard result to unsatisfactory audit .On the other hand, audit procedures
are the various methods used in obtaining evidence and the steps followed in
accomplishing the audit. audit techniques are ways and method of gathering
evidence and information; in a sense, a combination of procedures comprise
an audit technique. Audit procedures and techniques from part of an audit
program which is a program of action specifying the audit objectives, the
scope or coverage, and the audit procedures and techniques to be used.
HAROLD IAN G. RALA

BPA - 3A

Audit Process in Philippine Public Fiscal Administration: Harold Ian G. Rala Bpa - 3A

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AUDIT PROCESS IN PHILIPPINE PUBLIC FISCAL ADMINISTRATION

As we all know, audit process is essential in any administration, agency or

department especially in public fiscal administration. The goal of the audit

process is to promote effective program administration and financial

management, and to ensure integrity in governance. The primary purpose of

an audit is to evaluate operations with a view towards improving future

The state audit cycle consist of seven phases:

Phase I. Preliminary survey of the agency or audited entity;

Phase VI. In-depth examination of critical areas, analysis, and evaluation;

Phase V. Preparation of Draft report and presentation to agency officials;

Phase VI. Finalization of report; and

Phase VII. Follow - up on the implementation of audit recommendations.

In the preliminary survey is conducted to acquire a working knowledge of the

auditors gather general background information on the agency and its

operations after which he defines the scope of his/her audit.

HAROLD IAN G. RALA

obtain a general knowledge of the legislation and policies applicable to

agency objectives, policies, programs, and operating standard. In the courses

the agency exercise a delegated authority or any exercise of authority which

and practices actually applied by the agency in processing its transactions.

based on the findings and recommendations formulated in the previous

report and any limitations should be explicitly mentioned. Audit

recommendations, such as suggested improvements, proposed adjustments

in the accounts, correction or discontinuance of malpractices, solution to exist

problems, etc. should be followed- up there is always room for improvement in

an agency’s resources which consist of manpower, material resources, and

management methods and systems it is such improvement that will lead to a

the 3 E’s of agency management – economy, efficiency and effectiveness.

HAROLD IAN G. RALA

of public accountability. Public accountability is central to government audit as

it is anchored on the tenet that public officials, as stewards of public office,

occupies as a central role in its enforcement for it must verify, examine,

evaluate, review and attest to such stewardship. Establishing accountability

objective of state audit. Accountability for compliance means the

accountability of government officials to higher authorities for adherence to

elementary requirements and limitations. The specific objective of state

auditing also include the following, as enunciated in the Lima Declaration of

Guidelines on Auditing Precepts: (Annex I)

a. Proper and effective use of public funds;

b. Development of sound financial management ;

c. Orderly execution of administrative activities; and

d. Communication of information to public authorities and the public

through publication of public reports.

HAROLD IAN G. RALA

bound by strict principles and standard of application. Audit principle and

qualifications of the auditor and his/her exercise of judgment in the course of

audit. Professional audit standards also serve as guidelines to measure the

evidence and information; in a sense, a combination of procedures comprise

an audit technique. Audit procedures and techniques from part of an audit

program which is a program of action specifying the audit objectives, the

scope or coverage, and the audit procedures and techniques to be used.

HAROLD IAN G. RALA

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