Auditing of Educational Institutions

Only available on StudyMode
  • Download(s) : 1613
  • Published : January 26, 2012
Open Document
Text Preview
INTRODUCTION;2
DEFINITIONS3
Auditing3
Financial statements:4
Educational institutions4
FINANCIAL AUDITING:5
Objectives of auditing:5
Primary objects6
Subsidiary objects:6
General Principles Governing an Audit of Financial Statements6
Qualities of an auditor:7
Types of audit:7
Statutory audits:7
Private audits7
Internal audits:7
Required procedures:8
Auditors report:9
AUDITING OF EDUCATIONAL INSTITUTIONS9
INTRODUCTION:9
Background of auditing educational institutions:9
Reasons and purposes of auditing school accounts:10
Expectations of the schools’ accounts auditor:12
Types of auditing13
Internal auditing14
External auditing:15
Records and books of accounts for external auditing.17
Audit report21
CONCLUSION22
Reference23

INTRODUCTION
Since schools are public agencies, their raising and spending of money must be reviewed on a yearly and needs basis. This paper reviews auditing in educational institutions and specifically Kenyan Educational institutions. The paper starts by giving detailed definitions of key words which are essential in the discussion of auditing. However, a background to financial auditing is first discussed to give an insight on the same. Areas of general auditing covered include: need of auditing, objectives and general principles of auditing, qualities of an auditor, required procedures and the auditor’s report. Having discussed auditing in general, the paper goes further to discuss auditing in educational institutions and starts by giving a background to the same, reasons and purposes of auditing school accounts, expectations of the school accounts auditor, types of school auditing, records and books of accounts used for auditing and finally the audit report.

DEFINITIONS
Auditing

The Auditing Practices Board (APB), (2002), defines audit of financial statements as an exercise whose objective is to enable auditors to express an opinion whether the financial statements give a true and fair (or equivalent) of the entity’s affairs at the periods and of its profit or loss or income and expenditure for the period then ended and have been properly prepared in accordance with the applicable reporting framework.( for example relevant legislation and applicable accounting standards ) or where statutory or other specific requirements prescribe the term present fairly. Okumbe (1998), states that auditing deals with the investigation of the financial records of an educational organization in order to ascertain the objectivity and accuracy of the financial statements. Okumbe further suggest that auditing is an activity which appraises the accuracy and completeness of the accounting system applied by the educational organization. According to Millichamp.A (2006), auditing is an activity carried on by the auditors when he verifies accounting data determines the accuracy and the reliability of accounting statements and reports and then reports upon his efforts. Millichamp asserts that, it is an activity carried out by an independent person with the aim of reporting on the truth and fairness of financial statement. Wango (2007) defines auditing as the assessment of accounting records and procedures of a business or government unit by a trained accountant for the purpose of verifying the accuracy and completeness of records. Wango illustrates that auditors generally want to determine whether the correct procedures are followed and whether embezzlement or other illegal activity occurred. Nyongesa (2007) defines auditing as a systematic method of determining whether or not school funds and property have been used in a proper way. According to him, audits are proposals of school finances and property practices and records. Auditing therefore is a detailed study of the control of books and accounts such as subsidiary records. The study determines legality, accuracy, accounting and application...
tracking img