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Finance in the Public Sector

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1. What is the purpose of an audit in the public sector?
2. Why is public financial management important?
3. Outline and discuss the six key principles around which we have developed the American tax system. Provide examples of each principle.
4. What is the difference between an audit and program evaluation in the public sector?

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Answer 1
Purpose of Audit in Public Sector
The main purpose of an audit in the public sector is to ensure transparency and accountability in government programs and projects by evaluating their financial statements and other information. The auditing is useful to assess whether public sector organizations related to healthcare, education and charities are meeting their mission or objectives or not. To assist economic decision makers by providing an independent assessment of government programs, policies and operations is also a reason behind auditing in the public sector. Additionally, to identify trends and emerging challenges is also a purpose of a public sector audit (Coombs & Jenkins, 2002).
Answer 2
Importance of Public Financial Management
The public financial management (PFM) is an important element of development process that ensures accountability, aggregate control, effective management of public resources and macro-economic stability. It covers several important functions such as planning, collection, spending, reporting and auditing of public taxes. PFM is significant for government to deliver macroeconomic stability as well as efficient and effective services like basic education and health services (McKinney, 2004).
Along with this, it is also important to effectively monitor and evaluate performance of public sector ...

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