Audit services for Public Sector organisations: Ensuring transparency and accountability

As the UK public sector struggles with the post-pandemic aftermath, there has been additional public spending due to COVID-19, the requirement to tackle NHS backlogs, and delivering government priorities including eliminating carbon emission and transitioning to net zero carbon by 2050, urged the need for solid public sector financial management like never before.

A drop in the performance of the public sector body or a weak financial position will result in severe consequences for everyone, reducing necessary services, tax rises, and more. Audit services for the public sector give assurance that the public funds are appropriately spent and restore confidence in the public finances when there is evidence of a severe loss of trust in the government.

This comprehensive guide will cover how audit services for public sector organisations ensure transparency and accountability.

Table of contents

What is auditing in public sector organisations?
What are the critical elements of an effective public sector audit?
How is a quality audit beneficial for an organisation?

What is auditing in public sector organisations?

Public sector auditing is the systematic process of independently investigating, examining and assessing evidence to identify if the information or actual conditions in the organisation conform to established criteria. It is the statutory requirement of the public sector body to ensure that their financial statements are audited annually unless eligible for smaller body exemptions.


An audit is a tool to safeguard themselves against fraud, material misstatement, and errors. Audits add credibility to the financial reporting process and help build trust and reputation.

All public sector organisation audits start with a goal that may differ based on the type of audit conducted. The primary objective of an audit service in the public sector includes:

● Offering independent, objective, and reliable information to the intended users and deriving conclusions or opinions depending on sufficient and appropriate evidence collected throughout the auditing process related to public sector entities
● Improving accountability and transparency, motivating organisations for continuous improvements and sustained confidence in the thoughtful use of public funds and assets, and maintaining good performance of the public administration
● Enhancing the efficiency of the organisations in charge of managing activities with public funds as well as those that perform general oversight and corrective action over the public sector
● Fostering motivation for change through detailed insights and knowledge, thorough analysis, and well-supported suggestions for organisational improvement

What are the critical elements of an effective public sector audit?

Public sector audit activities need:

● Organisational independence: Auditors perform their activities independently without the interference of the entity being audited.
● A formal mandate: The government must establish the powers and duties of an auditor, including the audit procedures and reporting requirements and the obligation of the entity being audited to collaborate with the auditor.
● Unrestricted access: The auditors must have unrestricted access to assets, employees, and organisation records
● Sufficient funding: The audit process can be expensive, and the organisation must ensure adequate funding related to the size of its audit responsibilities.
● Organisation support: Every organisation member must support the auditor in finding evidence and helping them effectively conclude.
● Professional audit standards: The organisation and the auditor must maintain professional audit standards to promote quality audit work that is systematic, objective, and evidence-based.

How do auditors ensure transparency and accountability?

Audit services for the public sector include:

● The evolution of risks.
● Determining controls and operations.
● Assessing compliance with policies and procedures.
● Checking the existence of assets.
● Offering opinions on the financial statements.

It ensures the audit committee enhances transparency and accountability of financial reports. Additionally, they review internal audit plans, monitor accounting processes, check if the risk management process is effective and ongoing, look into the financial reporting and disclosures, and evaluate other processes, to gather sufficient evidence for giving an opinion and preparing audit reports.

Accountability is an integral part of the public sector as citizens can ask you questions about how the taxpayers’ money has been spent. These organisations must ensure that the money is well spent transparently and acceptably. On the other hand, transparency is related to disclosing an organisation’s financial statements to reduce volatility.

Auditors perform numerous processes throughout the auditing process to detect frauds and potential risks, assess if the financial statements are accurate, and ensure the business complies with established concepts, principles, accounting standards, legal requirements, and government regulations.

They determine the priority areas for audit and plan how to execute the audit process. Auditors then examine the financial statements and relevant documents to gather sufficient evidence, give an opinion and leave feedback for improvement. Their reports can be disclosed to the public for greater transparency. Legal reformers and the public look towards the audit reports for assurance that government actions are ethical and legal and that their financial and performance reporting accurately reflects the true picture of their financial performance and position.

How is a quality audit beneficial for an organisation?

Public sector auditing is essential for good governance. By offering an unbiased, objective assessment of whether the public resources are managed responsibly to achieve intended results, auditors help organisations to achieve accountability and integrity, improve confidence among people and stakeholders, and improve organisational operations.

A quality audit can benefit public sector organisations in a few ways. Some of them are listed below:

● It ensures the organisation complies with government regulations, accounting standards, tax regulations, etc.
● It highlights potential risks in an organisation and an opportunity to manage them. An audit helps identify potential material misstatements due to error or fraud.
● It offers independent, professional judgment in affirming the effective operation of organisation procedures and controls, identifying control failures, and providing independent assurance to shareholders and the public.

The auditor must have an unbiased orientation towards the audit subject, use a systematic process to collect and analyse information, compare criteria for formulating conclusions, and use widely accepted professional audit standards.



Auditor services for the public sector ensure to minimise risks, develop a robust internal control environment, and high-quality reporting. They use expert knowledge, abilities, resources, and independence to strengthen public sector organisations, confirm that the controls are operating effectively, identify fraud and corruption, and suggest ways the government can better operate.

Experlu Editorial Team
The editorial team at Experlu is comprised of seasoned financial professionals dedicated to providing high-quality content on accounting and finance. With a wealth of experience and diverse expertise, the team produces insightful articles that have established the Experlu blog as the UK's leading financial and accounting resource. The team includes accountants, auditors, and business advisors who stay updated with the latest industry developments. Their commitment to excellence ensures that Experlu remains a trusted source of information, helping readers stay informed about audit, business, finance, and tax matters.