Financial Statement Audit


The Financial Statement Audit, also known as the Financial Audit, is one of two parts of the Regularity Audit process. It determines whether the County Government’s financial information is presented in accordance with the applicable financial reporting and regulatory frameworks as mandated by the National Treasury in accordance to International Public Sector Accounting Standards. The audit of financial statements is necessary to verify that they fairly and accurately reflect the financial position of the institution and the reported use of funds. In its report, the Auditor General draws conclusions on the “truth and fairness” of the County government’s accounts and financial statements. The Auditor-general is expected to publish an audit report and submit it to the County Assembly and the Senate within six months of the end of the financial year. Typically, the Financial and Compliance Audits are submitted as a single report.


Upstream: Budget Estimates and Appropriation, Revised Budget Estimates and Appropriation, Annual Financial Statement

Downstream: Legislative Oversight


The financial audit purpose is achieved by obtaining sufficient and appropriate audit evidence to enable the auditor to express a reasonable assurance-based opinion on whether the financial information is free from material misstatement, whether due to fraud or error. Audits generally involve a four-phase process. In the case of the financial audit, the planning (phase 1) involves communication, scheduling and entry meeting with the auditee (County Government) and initial technical preparations to set out the audit scope and strategy. Execution (phase 2) involves the conduct of audit procedures and obtaining and evaluating audit evidence to support any findings and observations. A two-way communication and feedback process allows the auditee to respond before any outstanding issues are documented for further response. Reporting (phase 3) includes the crafting of an audit opinion for the auditee’s response, prior to submission to the County Assembly (and Senate). The audit report is then published for the benefit of stakeholders and the general public. Feedback (phase 4) involves review and deliberation of the report by the County Assembly (and Senate), with responses and clarifications provided by the County Executive. This is also the Legislative Oversight phase, during which conclusions will be documented for subsequent follow-up the Auditor-General.

For a more detailed description, follow this link: Financial Audit - step by step


Laws and Regulations

Public Audit Act 2015

Public Finance Management Act, No 18 of 2012

Public Finance Management (County Government) Regulations 2015