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The Audit Process in Public Sector Organizations in Pakistan Involves Multiple Stages

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23 views3 pages

The Audit Process in Public Sector Organizations in Pakistan Involves Multiple Stages

Uploaded by

mhhgqqbmrk
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The audit process in public sector organizations in Pakistan involves multiple stages, ensuring

accountability and transparency in the use of public funds. Below is a detailed explanation of the process,
highlighting the roles of the DG Audit, DAC, SDAC, and PAC.

1. Role of the DG Audit (Director General Audit)

The DG Audit is responsible for conducting audits of public sector organizations. The process includes:

 Audit Planning:
The DG Audit office prepares an annual audit plan, identifying areas of focus based on risk
assessments, government priorities, and previous audit findings.
 Field Audits:
Audit teams visit organizations to review financial records, processes, and compliance with rules
and regulations.
o Document Review: Examination of budgets, financial statements, and procurement
records.
o Interviews and Inspections: Meetings with officials and physical verification of assets.
 Draft Audit Report (DAR):
The audit findings are compiled into a draft report, highlighting irregularities such as
mismanagement, non-compliance, or waste of resources. This is shared with the concerned
department for comments.

2. Departmental Audit Committee (DAC)

After the DG Audit finalizes the initial findings, the next step is the DAC meeting, where audit
observations are discussed:

 Composition:
Typically chaired by the administrative head of the audited organization, with representatives
from the audit team, financial advisors, and relevant officials.
 Purpose:
To provide the department an opportunity to clarify, defend, or resolve the audit observations.
o If explanations are satisfactory, observations may be dropped.
o Unresolved issues are escalated to the next level.
 Outcome:
A report summarizing resolved and unresolved issues is prepared.

3. Special Departmental Audit Committee (SDAC)

SDAC meetings are convened for high-priority or sensitive audit issues that require specialized attention.

 Composition:
Senior officials from the department and the audit team, along with experts if needed.
 Purpose:
To address significant or unresolved issues from the DAC meetings.
o This often includes large financial irregularities, systemic inefficiencies, or critical policy
violations.
 Outcome:
Recommendations for further investigation or corrective action.

4. Public Accounts Committee (PAC)

The PAC is a key parliamentary committee that reviews the audit reports submitted by the Auditor
General of Pakistan (AGP).

 Composition:
Members of Parliament, usually chaired by a senior parliamentarian. The AGP, DG Audit, and
departmental representatives also participate.
 Functions:
o Examination of Audit Reports: PAC scrutinizes unresolved audit observations and holds
public hearings.
o Accountability: Officials from audited departments are required to explain actions or
decisions.
o Recommendations: PAC can recommend recoveries, disciplinary actions, or systemic
reforms.
 Follow-Up:
The PAC tracks the implementation of its recommendations to ensure compliance.

Summary of Workflow

1. DG Audit conducts field audits and prepares the Draft Audit Report.
2. DAC reviews and resolves issues at the departmental level.
3. SDAC handles sensitive or high-priority issues requiring specialized attention.
4. PAC provides final oversight, holding public hearings and ensuring accountability through
actionable recommendations.

This multi-layered process ensures a robust mechanism for fiscal discipline, compliance, and transparency
in public sector organizations in Pakistan.

The above explanation of the audit process in public sector organizations in Pakistan is a generalized
framework derived from publicly available information on auditing standards, government audit
procedures, and legislative practices in Pakistan. For specific and authoritative references, the following
sources can be consulted:

1. Auditor General of Pakistan (AGP) Publications:


o The AGP's official website provides audit guidelines, annual reports, and the detailed
audit process for public sector organizations.
o Website: agp.gov.pk
2. Public Accounts Committee (PAC) Reports:
o PAC proceedings and reports are often accessible through the National Assembly of
Pakistan's website or provincial assembly records.
3. Constitution of Pakistan (1973):
o Articles 168–171 outline the role of the Auditor General and the PAC.
o Available at the official website of the National Assembly or government legal resources.
4. Public Sector Audit Guidelines (International and Local):
o Pakistan adheres to guidelines from the International Organization of Supreme Audit
Institutions (INTOSAI), adapted to local contexts.
o INTOSAI's standards are available at: intosai.org
5. Public Financial Management (PFM) Reforms:
o Documentation on PFM reforms in Pakistan often provides context for the roles of DAC,
SDAC, and PAC in financial accountability.

If you'd like, I can look up specific documents or reports related to these processes to provide direct
references. Let me know!

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