Government Audit Committees – Part 2 – Hitting your stride: Understanding internal controls, fraud and audit findings


The management of risk is an activity that flows out of the government’s audit committee provides responsibility to provide governance and accountability (see Part 1) while addressing the enhanced transparency expectations of the public which it serves. The understanding and identification of an entity’s risks include not only identification, assessment but the mature aspects of internal controls, mitigation, analysis as they relate to strategies and objectives.

As stated in the full report: “The primary responsibility of the audit committee with respect to the internal controls is the system of internal controls over financial reporting and compliance with laws, regulations, contracts, grant agreements, abuse and operations.” The ability to execute this responsibility relies upon the use of an accepted framework. In the U.S., the COSO framework is sited as an acceptable framework and is utilized in the Federal Government’s Green book. In other countries, similar frameworks are utilized, such as IFAC’s International Framework used by European governments. To assist the audit committee in executing their responsibilities a checklist is provided to assist in the demonstration of the committee’s commitment to integrity and ethics, oversight, competence and accountability.

The prevention and deterrence of fraud as well as oversite that appropriate actions are taken against those found perpetrating fraud are under the government audit committee’s responsibilities. The public’s heightened expectations regarding public sector fraud is addressed within this report with explanations of the types of fraud to be alerted to.

This article links to the full report which includes a tool of 20 best practices for developing a government audit committee charter as well as the Part 1 in the series.


Author: Lori A. Sexton, CPA, CGMA, is a Senior Technical Manager, America’s Region Management Accounting at the AICPA and the Association of International Certified Professional Accountants. She serves as staff liaison to the AICPA’s Government Accountability and Performance Committee.