TUTORIAL –SOALAN LAZIM

1. What is the meaning of auditing?

Auditing can be defined as a systematic check or examination, analysis and evaluation of
financial statements, records, operational and administration of an organization to determine
adherence to the general principles of accounting, management policies, rules and
procedures.

2. Why do you need to carry out an audit?

An audit is carried out to:
1.        Ensure compliance to the laws and regulations
2.        Exposed unwarranted factor/element which leads to inefficiency, ineffectiveness and
uneconomical procedures.
3.        To give an opinion whether the financial statements prepared is true and fair and the
records are properly prepared according to the generally accepted accounting and
auditing standards.

3. What is the audit mandates to carry out the audit?

Federal Constitution 1957and the Audit Act 1957.

4. Who appoint an Auditor General?

His Majesty the Yang di-Pertuan Agong shall appoint the Auditor General on the advice of
the Prime Minister and after consultation with the Council of Rules in accordance with
Articles 105 of Federal Constitution.

5. What is the responsibility of an Auditor General?

Articles 106 of the Federal Constitution and the Audit Act 1957 outline the Auditor General’s
responsibility to audit the accounts of the Federal and State Governments, Government
Agencies, Public Authorities and other bodies as ordered by His Majesty the Yang di-
Pertuan Agong.

6. What is the power of an Auditor General?

The Auditor General has full power to request all information and explanation pertaining to
the audit. He can have access to any documents and have power to ask any individuals to
give statement under oaths as well as to empower any officers to inspect and enquire on his
behalf. The Auditor General may also seek legal advice while performing his duties. All
information obtained by the Auditor General is deemed confidential.

7. What is the scope of auditing?

Financial Statements Auditing to certify the annual financial statements submitted by the
Federal and State Governments/Government Agencies as required by law and in
accordance with accepted accounting standards. Through this audit, the Auditor General will
give his opinion whether the financial statements prepared is true and fair and that records
are properly maintained and updated.
Compliance Auditing to determine whether financial management at
Ministries/Departments/Government Agencies is in compliance with the laws and other
financial regulations and procedures.
Performance Auditing to appraise whether Government programmes/activities are executed in
an effective, efficient and economical manner and achieve their intended objectives.

8. Who gets audited?

The National Audit Department is responsible for carrying out audits on 26 Ministries and 96
Departments, 13 State Governments Agencies, 124 Financial Statements and 12
Consolidated Funds of Federal Statutory Bodies, 144 Local Authorities and 15 Islamic
 Councils, Government Agencies and 496 companies which received grants from the
Government or more than 51% of its share capital is owned by the Government.

9. What types of report produced by the Auditor General?

 i.     Public Accounts Statements and Financial Management of Federal Government
Ministries/Department.
ii.      Activities of Federal Government/Department and Federal Government Management
Companies
iii.     Financial Statements and Financial Management of State Department/Agencies
iv.     Activities and Special Research of State Department/Agencies
v.     Financial Management of Federal Statutory Bodies

10. What types of certificate that has been produced by Auditor General?

i.     Unqualified where the auditor is completely satisfied with the true and fairness of financial
statements.
ii.    Qualified where the auditor is dissatisfied with certain aspects of the financial statement in
relation to fairness of presentation. Accounting principles applied or consistency.
Qualifications resulting from restriction of scope may also be made.
iii.    Adverse where the auditor is of the opinion that the financial statements and notes thereon,
taken as a whole, do not present fairly either the financial position or results of operations or
change in financial position of an entity.
iv.    Disclaimer - where the auditor is unable to express an opinion, for some reasons or others,
including scope limitations.