BKAL3023 PUBLIC SECTOR ACCOUNTING

QUESTION 4 (25 MARKS)

A. Recently, Datuk Aboo Baker has been appointed as a new Auditor-General of Malaysia. The appointment was announced by Chief Secretary to the Government. Datuk Aboo Baker, who has a Bachelor's degree in Accounting from the University of Ikhlas, will serve as the Auditor-General for two years from January 2020 until December 2021. Datuk Aboo Baker realizes that as the Auditor-General, he is accountable to various stakeholders and his independence is fundamental to public accountability. He also notices that Federal Constitution 1957 and Audit Act 1957 (Act 62) describe the matters on the Auditor-General in detail. This includes his power to authorize any person he deems competent to conduct on his behalf and under his direction on any audit of public entities. Based on the above statement: REQUIRED:

(a) Describe any TWO (2) approaches that enable the Auditor-General to be independent of Executive influence. (7 Marks)

(b) Discuss the TWO (2) advantages and TWO (2) disadvantages of sub-contracting audit engagements in the public sector to private accounting firms. (8 Marks)

B. A total of RM297 billion or 18.4 per cent of the Gross Domestic Product (GDP) is allocated in Malaysian Budget 2020 to fund operating and development expenditures. Through the allocation, the Government has also given an increased emphasis to the efficiency and effectiveness of various government programs to be implemented. Discuss FIVE (5) reasons for such emphasis. (10 Marks)