PUB2608 PAST
EXAM
QUESTIONS &
ANSWERS 2025
QUESTIONS WITH 100%
VERIFIED AND
CERTIFIED ANSWERS.
, lOMoARcPSD| 18998289
1
MAY/JUNE 2025 QUESTIONS WITH ANSWERS
QUESTION1
1.2 Describe the objectives and principles of auditing and demonstrate understanding
with the use of relevant public sector examples.
INTRODUCTION
Public accountability, reporting, fraud, and errors are some of the main goals and tenets that
auditing supports. Public accountability is the duty of organizations, especially those in the
public sector, to inform stakeholders about their operations and results. This promotes
openness and trust in the neighbourhood. Errors and fraud can seriously affect the auditing
process and the accuracy of financial statements. For auditors and organizations, it is
essential to comprehend these ideas. The researcher will talk about reporting and public
accountability, as well as fraud and errors.
6. Public accountability and reporting
According to Sikhakane & Reddy (2011: Employees are required to take responsibility for
their work performance results which fall within their direct authority as stated by Smit &
Cronje (2002:192) according to Sikhakane & Reddy (2011: 85). The concept of
accountability establishes a relationship between organizational results and the activities of
specific people or business segments. According to Sikhakane & Reddy (2011: Public
accountability involves holding government entities and officials responsible for their
activities and the management of public funds. Public sector audits operate on the
fundamental goal of establishing government transparency and trust. Auditing ensures
public bodies remain accountable for their financial choices. The system provides clear
insight into how government funds are utilized. It's crucial for government agencies to deliver
complete and accurate information to legislative bodies like Parliament within set
timeframes. These bodies rely on audit results to take appropriate actions and uphold
accountability standards. Auditing is the key way to ensure that government institutions
handle public money responsibly and are held accountable for their financial activities.
, lOMoARcPSD| 18998289
2
Naidoo (2017: 3) points out that one of the fundamental financial responsibilities of the state
is how the government manages public funds for its citizens. The executive branch is
required to keep lawmakers, especially Parliament, informed about their accountability
duties. Yet, the connection between approved budgets and the reporting of budgeted costs
is anything but simple. In practice, the scenario is quite different. There are many
government departments, constitutional entities, trading companies, and a variety of
transactions and transaction types, resulting in numerous potential combinations.
According to Naidoo (2017: 3), Parliament relies on the audit function to provide thorough,
accurate, and timely information, which is essential for fulfilling its accountability duties and
taking necessary actions. Upon reflection, it seems that modern governments don’t have
many other options to replace these testing functions. The aim of state examinations, which
can be seen as a distinct inquiry separate from government financial matters, is to assess
the performance of civil servants in these agencies and how their actions measure up
against standards of efficiency, regularity, and legality. It’s evident that these tests have
evolved from the cash audit process to include more complex features, as the original audits
primarily focused on cash testing, and efficiency is likely gauged based on the testing
process.
Auditors need to provide audit reports that are clear and easy for stakeholders to
understand. As outlined in the Public Audit Act (2004), the Auditor-General is tasked with
reporting on the financial management, financial statements, and accounts of all
municipalities, as well as national and provincial state departments and administrations.
This also includes any other organization or accounting entity that falls under the
AuditorGeneral's auditing responsibilities. The Auditor-General has the power to review
and report on the financial management and accounts of any organization that receives
funding from the National Revenue Fund, a Provincial Revenue Fund, a municipality, or
any legally authorized entity that accepts public funds. Additionally, the Auditor-General
must share audit findings with any authority designated by national legislation and with any
legislature that has a direct interest in the audit.
ISSAI (2019: 26) indicates that the audit process includes generating a report to disseminate
the audit results to stakeholders, other governance officials, and the general public. The
intention is also to promote follow-up and corrective action. In some audit courts with
jurisdiction, this may entail issuing legally binding reports or judicial rulings. Reports should
be simple to interpret, clear of ambiguity, and complete. They should be objective and fair,
presenting only material supported by sufficient and suitable audit data and placing findings
, lOMoARcPSD| 18998289
3
in context. The structure and substance of a report will be determined by the type of the
audit, the target users, the applicable standards, and regulatory requirements. The court's
mandate, along with other relevant laws or regulations, can dictate how reports are
structured or worded, whether they’re in a short or long format. Long-form reports dive deep
into the audit's scope, findings, conclusions, potential impacts, and suggestions for
corrective actions. On the other hand, short-form reports are more concise and usually
adhere to a more standardized layout.
For example, an audit of the city of Tshwane's financial statements guarantees that taxpayer
money is spent wisely. For example, if a city declares a budget surplus, an audit can confirm
that it is accurate and not due to accounting tricks. Auditing provides intended consumers
with independent, objective, and trustworthy information, increasing accountability and
transparency in the use of public expenditures.
7. Fraud and mistakes
PWC (2017: 7) indicates that management is responsible for preventing and identifying
fraud. Preventing and detecting fraud is challenging since it is deliberately concealed and
may require collusion among several players. Even when audits are conducted by relevant
processes, they may fail to discover serious fraud. Auditors, on the other hand, must have
reasonable assurance that the financial statements have not been materially misstated due
to fraud. If auditors suspect fraud while performing their duties, several things will change,
including their risk assessment, the nature and extent of communications with those in
charge of governance, the nature and extent of audit procedures, and the evaluation of the
effectiveness of applicable internal controls and processes. The awareness that an impartial
external audit will be done serves as a disincentive to fraud.
According to ISSAI (2019: 25), the auditor should consider and evaluate the risk of various
sorts of flaws, deviations, or misstatements that could occur in respect to the subject matter.
This can be accomplished through methods that help to gain an understanding of the entity
or program and its surroundings, including any applicable internal controls. Auditors should
identify and evaluate fraud risks that are relevant to the audit objectives. Auditors should
conduct investigations and follow processes to detect and address fraud risks related to the
EXAM
QUESTIONS &
ANSWERS 2025
QUESTIONS WITH 100%
VERIFIED AND
CERTIFIED ANSWERS.
, lOMoARcPSD| 18998289
1
MAY/JUNE 2025 QUESTIONS WITH ANSWERS
QUESTION1
1.2 Describe the objectives and principles of auditing and demonstrate understanding
with the use of relevant public sector examples.
INTRODUCTION
Public accountability, reporting, fraud, and errors are some of the main goals and tenets that
auditing supports. Public accountability is the duty of organizations, especially those in the
public sector, to inform stakeholders about their operations and results. This promotes
openness and trust in the neighbourhood. Errors and fraud can seriously affect the auditing
process and the accuracy of financial statements. For auditors and organizations, it is
essential to comprehend these ideas. The researcher will talk about reporting and public
accountability, as well as fraud and errors.
6. Public accountability and reporting
According to Sikhakane & Reddy (2011: Employees are required to take responsibility for
their work performance results which fall within their direct authority as stated by Smit &
Cronje (2002:192) according to Sikhakane & Reddy (2011: 85). The concept of
accountability establishes a relationship between organizational results and the activities of
specific people or business segments. According to Sikhakane & Reddy (2011: Public
accountability involves holding government entities and officials responsible for their
activities and the management of public funds. Public sector audits operate on the
fundamental goal of establishing government transparency and trust. Auditing ensures
public bodies remain accountable for their financial choices. The system provides clear
insight into how government funds are utilized. It's crucial for government agencies to deliver
complete and accurate information to legislative bodies like Parliament within set
timeframes. These bodies rely on audit results to take appropriate actions and uphold
accountability standards. Auditing is the key way to ensure that government institutions
handle public money responsibly and are held accountable for their financial activities.
, lOMoARcPSD| 18998289
2
Naidoo (2017: 3) points out that one of the fundamental financial responsibilities of the state
is how the government manages public funds for its citizens. The executive branch is
required to keep lawmakers, especially Parliament, informed about their accountability
duties. Yet, the connection between approved budgets and the reporting of budgeted costs
is anything but simple. In practice, the scenario is quite different. There are many
government departments, constitutional entities, trading companies, and a variety of
transactions and transaction types, resulting in numerous potential combinations.
According to Naidoo (2017: 3), Parliament relies on the audit function to provide thorough,
accurate, and timely information, which is essential for fulfilling its accountability duties and
taking necessary actions. Upon reflection, it seems that modern governments don’t have
many other options to replace these testing functions. The aim of state examinations, which
can be seen as a distinct inquiry separate from government financial matters, is to assess
the performance of civil servants in these agencies and how their actions measure up
against standards of efficiency, regularity, and legality. It’s evident that these tests have
evolved from the cash audit process to include more complex features, as the original audits
primarily focused on cash testing, and efficiency is likely gauged based on the testing
process.
Auditors need to provide audit reports that are clear and easy for stakeholders to
understand. As outlined in the Public Audit Act (2004), the Auditor-General is tasked with
reporting on the financial management, financial statements, and accounts of all
municipalities, as well as national and provincial state departments and administrations.
This also includes any other organization or accounting entity that falls under the
AuditorGeneral's auditing responsibilities. The Auditor-General has the power to review
and report on the financial management and accounts of any organization that receives
funding from the National Revenue Fund, a Provincial Revenue Fund, a municipality, or
any legally authorized entity that accepts public funds. Additionally, the Auditor-General
must share audit findings with any authority designated by national legislation and with any
legislature that has a direct interest in the audit.
ISSAI (2019: 26) indicates that the audit process includes generating a report to disseminate
the audit results to stakeholders, other governance officials, and the general public. The
intention is also to promote follow-up and corrective action. In some audit courts with
jurisdiction, this may entail issuing legally binding reports or judicial rulings. Reports should
be simple to interpret, clear of ambiguity, and complete. They should be objective and fair,
presenting only material supported by sufficient and suitable audit data and placing findings
, lOMoARcPSD| 18998289
3
in context. The structure and substance of a report will be determined by the type of the
audit, the target users, the applicable standards, and regulatory requirements. The court's
mandate, along with other relevant laws or regulations, can dictate how reports are
structured or worded, whether they’re in a short or long format. Long-form reports dive deep
into the audit's scope, findings, conclusions, potential impacts, and suggestions for
corrective actions. On the other hand, short-form reports are more concise and usually
adhere to a more standardized layout.
For example, an audit of the city of Tshwane's financial statements guarantees that taxpayer
money is spent wisely. For example, if a city declares a budget surplus, an audit can confirm
that it is accurate and not due to accounting tricks. Auditing provides intended consumers
with independent, objective, and trustworthy information, increasing accountability and
transparency in the use of public expenditures.
7. Fraud and mistakes
PWC (2017: 7) indicates that management is responsible for preventing and identifying
fraud. Preventing and detecting fraud is challenging since it is deliberately concealed and
may require collusion among several players. Even when audits are conducted by relevant
processes, they may fail to discover serious fraud. Auditors, on the other hand, must have
reasonable assurance that the financial statements have not been materially misstated due
to fraud. If auditors suspect fraud while performing their duties, several things will change,
including their risk assessment, the nature and extent of communications with those in
charge of governance, the nature and extent of audit procedures, and the evaluation of the
effectiveness of applicable internal controls and processes. The awareness that an impartial
external audit will be done serves as a disincentive to fraud.
According to ISSAI (2019: 25), the auditor should consider and evaluate the risk of various
sorts of flaws, deviations, or misstatements that could occur in respect to the subject matter.
This can be accomplished through methods that help to gain an understanding of the entity
or program and its surroundings, including any applicable internal controls. Auditors should
identify and evaluate fraud risks that are relevant to the audit objectives. Auditors should
conduct investigations and follow processes to detect and address fraud risks related to the
