Page 52 - Azerbaijan State University of Economics

Samuel Atsibha Gebreyesus: Eterminants Of Public Sector Audit Quality: The Case Of The
Office Of The Federal Auditor General, Ethiopia (OFAG)

An audit's primary aim is to increase the level of trust in the financial statements of

intended users. To provide an opinion on whether the financial statements are

prepared, in all material aspects, in compliance with the applicable financial reporting

framework, auditors must gather sufficient relevant audit evidence. This opinion
typically concerns whether the financial statements "present fairly, in all material
respects," or provide "a true and fair assessment" of the entity's financial situation as
of the period's end, as well as its performance and cash flows for the period. An
important basis for ensuring audit quality is provided by auditing standards.
Particularly, the IAASB's International Standards on Auditing (ISAs) set up the
baseline standards and outline the auditor's responsibilities. (IAASB, 2013). On the
other hand, most ISA criteria either offer a framework for the decisions taken in an
audit or require opinion to be appropriately applied. The Supreme Audit Institutions
(SAIs) are the leading public sector auditing bodies in each state. Their primary
function is to assess whether public funds are used effectively, economically and
efficiently while adhering to all applicable laws and regulations and considering the
country's needs. The effectiveness of controls can be confirmed, waste can be found,
and improvements to the performance of government organizations can all be made
with the help of well-functioning SAIs. They achieve this by generating detailed audit
reports that are objective and designed to bring about positive change in the way
governments handle public resources. They can decrease fraud, promote sustainable
national growth, and alleviate poverty by ensuring that money is used wisely (OECD,
2010).

Most developing nations have a Supreme Audit Institution as their recognized identity
for public sector auditing (Auditor-General, Comptroller General, an Audit
Commission, or a Court of Accounts). Many SAIs are members of INTOSAI, which,
with the help of donors and the United Nations, has helped its members enhance their
operations in large part by creating auditing standards and other rules (World Bank,
1995).

Problem statement
SAIs should be staffed and led by professionals, and government intervention should
be minimal (OECD, 2010). They are also important in verifying that control systems
are working properly. The main responsibilities of the Office of the Federal Auditor
General of Ethiopia are to determine if public funds are used effectively,
economically, and efficiently while adhering to all applicable laws and regulations. It
improves good governance and the functioning of government institutions by
providing independent audit services in accordance with international standards for
supreme audit institutions. However, it is not functioning, as it ought to.

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