- 10 Marks
AAA – May 2018 – L3 – Q4a – Government external audit and public accountability, Public sector audit
Discuss the Managing Director's refusal to allow auditors to verify performance agreements and the need to establish an Audit Committee under the Public Financial Management Act
Question
a) Sewerage Corporation was established by an Act of Parliament to provide water to Rural Communities. The team of auditors from the Ghana Audit Service demanded to verify the performance agreements made by the company with the state. The Managing Director refused on the grounds that the auditors were over-stepping the scope of their work.
The auditors also discovered that the corporation has not established an Audit Committee (AC), as required by the Public Financial Management Act 2016, Act 921. Management’s response was that AC was not established because it did not see its importance even though it is required by law.
Required: i) Comment on the action of the Managing Director on the performance agreement. (5 marks) ii) Advise the Managing Director on the need to establish an Audit Committee (AC). (5 marks)
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