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Article
Publication date: 1 December 2002

Christine Ryan and Chew Ng

Probity audits, real time audits which review compliance with process and conformance with guidelines, are gaining popularity in the Australian public sector. Prior…

Abstract

Probity audits, real time audits which review compliance with process and conformance with guidelines, are gaining popularity in the Australian public sector. Prior research has noted that the conduct of probity audits by auditors‐general may pose problems for their independence. This paper provides empirical evidence on the extent to which probity audits are performed by auditors‐general in Australia, and the perceptions of auditors‐general to any dilemmas posed. The study finds that approximately half of the auditors‐general conduct probity audits, and that “independence” is a key concern for those who do not perform these tasks. This in‐depth study of probity audits contributes to an understanding of the changing nature of public sector audit.

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Managerial Auditing Journal, vol. 17 no. 9
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 1 February 2002

Ruth Kiraka, Colin Clark and Michael De Martinis

Supreme audit institutions, such as the auditors‐general, are considered a crucial link in the accountability chain between parliament and the executive arm of government…

Abstract

Supreme audit institutions, such as the auditors‐general, are considered a crucial link in the accountability chain between parliament and the executive arm of government. The purpose of this study is to examine the enabling legislation of the supreme audit institutions of the Association of Southeast Asian Nations (ASEAN) member countries from a public sector accountability and independence perspective. Following on from INTOSAI (1998), English and Guthrie (2000) and De Martinis and Clark (2001), this study uses an accountability and independence framework to identify and compare the current legislation applicable to the supreme audit institutions of the ASEAN member countries with regard to independence, autonomy, mandate, funding issues, and related parliamentary powers. This study finds that while on average each jurisdiction has addressed slightly less than half the total number of issues under examination, there is considerable diversity with regard to the particular issues addressed. The study suggests policy implications to further strengthen the provisions for accountability and independence of supreme audit institutions through amendments to the enabling legislation of the various jurisdictions.

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Asian Review of Accounting, vol. 10 no. 2
Type: Research Article
ISSN: 1321-7348

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Article
Publication date: 1 October 1998

Warwick Funnell

The introduction of efficiency auditing in Australian Commonwealth state audit created a level of stress and threat for the Auditor‐General never previously encountered…

Abstract

The introduction of efficiency auditing in Australian Commonwealth state audit created a level of stress and threat for the Auditor‐General never previously encountered. Using insights from processual analysis as developed by Turner to demonstrate the pressures on state audit, the paper focuses on the principal events constituting the short life of the new Efficiency Audit Division (1978‐84) which had been established within the Australian Audit Office to develop efficiency auditing methods and to carry out efficiency audits. It documents for the first time a level of executive intrusion in state audit which contradicts the image promoted in Westminster democracies of a robustly independent state auditor and highlights the political nature of state audit.

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Accounting, Auditing & Accountability Journal, vol. 11 no. 4
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 1 August 2001

Yves Gendron, David J. Cooper and Barbara Townley

This article investigates the role of the state auditor in Alberta. An analysis of the Office of the Auditor General of Alberta’s annual reports shows that the role of the…

Abstract

This article investigates the role of the state auditor in Alberta. An analysis of the Office of the Auditor General of Alberta’s annual reports shows that the role of the Office has significantly changed to promote and encourage the implementation in the public sector of a particular type of accountability informed by new public management. The authors argue that the Office has increased its power to influence politicians and public servants about the merits of its specific understanding of what accountability should be. However, as the Office becomes more powerful, it also becomes more vulnerable to complaints about a lack of independence from the executive. Indeed, the Office is now so closely associated with new public management that we believe that it is difficult for the Office to sustain the claim that it is able to provide independent assessments of public‐sector administration.

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Accounting, Auditing & Accountability Journal, vol. 14 no. 3
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 13 September 2011

Alistair Brown

Concentrating on internal commentaries, this paper aims to consider the factors that have contributed to the resistance to the introduced reporting and accountability for…

Abstract

Purpose

Concentrating on internal commentaries, this paper aims to consider the factors that have contributed to the resistance to the introduced reporting and accountability for the whole‐of‐government of Vanuatu.

Design/methodology/approach

The view from the centre considers documentary evidence of the Auditor‐General's commentaries on the whole of Vanuatu government reporting. Textual analysis takes into account the complexity of Vanuatu's political, social, economic, cultural and historical background, together with views from the periphery about the expectations raised about Vanuatu's constitutional accountability.

Findings

In recent times, in Vanuatu, there have been no annual reports generated by the Auditor‐General and, thus, no examination and audit of the accounts of the government of Vanuatu, suggesting a resistance to the introduced Condominium concepts of parliamentary accountability of the whole of Vanuatu government reporting. In the time the Auditor‐General's Office (AGO) did produce reports that were largely ignored by parliament and its Public Accounts Committee (PAC).

Research limitations/implications

Introduced ideas of accountability as reflected in the constitution of Vanuatu have an uncertain space. Introduced Westminster systems of government raise an expectation to uphold the intent and provisions of constitutional accountability through either Western‐narrow or Western‐broad government reporting. Textual analysis of the Auditor‐General's commentaries show that to develop and fully leverage ideas of imported concepts, such as accountability, those on the periphery need to understand the “centre”, their nature, characteristics and configuration.

Practical implications

Greater funding and staffing of the AGO would assist in the examination and audit of the accounts of the government of Vanuatu. Greater interest by parliamentary oversight committees, such as the PAC, in the Auditor‐General's work would help this examination and audit process.

Originality/value

The originality of the paper rests in considering Vanuatu's agency's own government reporting through internal points of reference.

Details

Pacific Accounting Review, vol. 23 no. 2
Type: Research Article
ISSN: 0114-0582

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Article
Publication date: 28 January 2020

Nirmala Nath, Radiah Othman and Fawzi Laswad

This paper aims to provide insights into how the New Zealand Office of the Auditor-General (NZOAG) legitimised the selection of topics for performance audit in the New…

Abstract

Purpose

This paper aims to provide insights into how the New Zealand Office of the Auditor-General (NZOAG) legitimised the selection of topics for performance audit in the New Zealand public health sector over a 10-year period, 2003-2013, by fulfilling the key actors’ “taken for granted beliefs” of the dual roles of the NZOAG: its independence and accountability.

Design/methodology/approach

This paper uses evidence gathered from interviews with representatives of the District Health Boards, the Ministry of Health (including Health Advisory Committee members) and NZOAG staff, along with publically available documentary evidence over a 10-year period. The authors draw on Suchman’s (1995) authority on institutional legitimacy to inform the research findings.

Findings

The New Zealand Auditors-General (NZAGs) get inputs from various sources such as their own audit teams, parliamentary deliberations, the Ministry of Health, the District Health Boards, media and public concerns and complaints. These sources initiate ideas for performance audits. Subsequently, the NZAGs use the recurring themes and risk assessment criteria while simultaneously consulting with the auditees (the MOH and the DHBs) and other actors, such as health advisory groups, to select topics for such audits. This signals to the key actors, such as the MOH and the DHBs, that the NZOAG is addressing the topics and concerns relevant to the former while discharging its public accountability role. Furthermore, the consultative approach acts as a catalyst, ensuring that the actors involved with public sector health service delivery, specifically the auditees, accept the selected topic. This leads to a lack of resistance to and criticism of the topic; the selection process, therefore, is legitimatised, and credibility is added to the audits. Because of the consultative approach taken by the NZAGs, the actors, including the performance auditors, continue to believe that the Office acts independently from third party influence in selecting their audit topics, elevating the NZAGs’ moral legitimacy with respect to their public accountability role.

Research limitations/implications

The study’s focus group does not include parliamentary representatives, only representatives from the DHBs, the MOH and the NZOAG; therefore, the conclusions on effective discharge of the NZOAG’s accountability role and Parliamentary acceptance is not conclusive – the NZOAG acts on behalf of the Parliament in discharging its accountability role and the latter is also the formal recipient of the reports.

Practical implications

The implications for practitioners and policymakers are that the use of a consultative approach to select topics for performance audit in the absence of performance auditing standards ensures auditee readiness and acceptance of such audits. This also promotes mutual benefits and “trust” between the AG and auditees. Such audits can be used to bring about efficacy in health service delivery.

Social implications

The selected topics for audits will have an impact on citizens’ lifestyles, with improved health services delivery.

Originality/value

There is a dearth of research on who initiates the ideas for performance auditing and how the Office of the Auditor-General selects topics for such audits. This study adds a new dimension to the existing performance auditing literature. The authors reveal how the NZOAG seeks to legitimise the selection of topics for such audits by consulting with the auditees and other actors associated with public sector health service delivery, while upholding its independent status and making transparent how it discharges its accountability role within the context of performance auditing.

Details

Qualitative Research in Accounting & Management, vol. 17 no. 2
Type: Research Article
ISSN: 1176-6093

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Article
Publication date: 23 October 2009

Kerry Jacobs

The purpose of this paper is to examine whether the use of commercial‐in‐confidence arrangements within the public sector allows the deliberate manipulation of accounting…

Abstract

Purpose

The purpose of this paper is to examine whether the use of commercial‐in‐confidence arrangements within the public sector allows the deliberate manipulation of accounting figures to generate support for the privatisation agenda.

Design/methodology/approach

A case study is presented of an Australian power entity, United Energy, where the privatisation was subject to commercial‐in‐confidence restrictions and differing opinions as to the accuracy of the entity's financial accounts during the privatisation process. It examines many of the key “commercial‐in‐confidence” documents, which are now available through parliamentary and official document sources, together with pre‐ and post‐privatisation financial statements.

Findings

The accounting figures were shaped to support a privatisation agenda and this was obscured by the commercial‐in‐confidence provision. Some attempts were made to use accounting arrangements to reduce federal taxes but this failed. A substantial element of the reported sale price represented internal transfers between the state‐owned entity and the government with the actual price paid by the purchaser being substantially lower than the reported price. The price paid was based on the financial statements which were openly challenged by the Auditor‐General. The paper strongly supports the contention that manipulation of accounting figures occurs under commercial‐in‐confidence privatisations.

Research limitations/implications

This was limited to one example at one time. Further work is needed on other settings.

Practical implications

The paper challenges the success claimed for the privatisation process and for the social benefits of privatisation by tender.

Originality/value

There was little evidence of a substantial improvement in financial performance following privatisation or that the pre‐privatisation performance was substantially boosted to support the privatisation agenda. It did show that the accounting served political ends.

Details

Accounting, Auditing & Accountability Journal, vol. 22 no. 8
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 25 October 2017

Monir Mir, Haiwei Fan and Ian Maclean

The paper aims to explore whether different models of public sector audit exist in China without adhering to the goals and objectives of public sector audit systems in…

Abstract

Purpose

The paper aims to explore whether different models of public sector audit exist in China without adhering to the goals and objectives of public sector audit systems in democratic jurisdictions.

Design/methodology/approach

The study is based on a single embedded case study involving multiple methods of data collection including public documents, semi-structured interviews and site visits. The research methods and the analytical framework of the study draw on the concepts of political competition, public sector accountability and audit independence.

Findings

The study finds that the Chinese National Audit Office’s (CNAO) objectives derive from the neo-classical economic discourse and not from ideas of public accountability, as is the case in democratic parliamentary jurisdictions. The study finds that public sector audit in China functions in ways which are similar to that of internal audit. The CNAO may provide limited political and public accountability for Chinese public officials indirectly by enhancing their managerial accountabilities.

Research limitations/implications

The study goes against the prevailing view that supreme audit institutions which are part of the executive will lead to poor accountability of the public sector and increased public sector corruption.

Practical implications

The study suggests that enhancing managerial accountability in non-democratic (and pseudo-democratic) jurisdictions through public sector audit can by itself be of significant benefit. Further, such enhancements may also strengthen public sector accountability.

Originality/value

This paper fills a research gap by exploring public sector audit independence in a developing country with a unitary system of government.

Details

Managerial Auditing Journal, vol. 32 no. 9
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 25 February 2014

Des Pearson

– This paper aims to talk about the changes to auditing practice in the context of broader changes in the public sector.

Abstract

Purpose

This paper aims to talk about the changes to auditing practice in the context of broader changes in the public sector.

Design/methodology/approach

A personal reflection on the issue using prior experiences as a former auditor-general of two Australian states.

Findings

The role for government audit will always mirror the change in the public sector. Whether audit fulfils this role depends on having the right legislation and the right approach. While audit legislation lags behind recent shifts in public sector approaches, government auditors are continuing to explore new ways to give parliament, as well as the sector, authoritative opinions and commentary that is relevant and valuable.

Practical implications

Increased understanding of the changing role of the Auditor-General's Office that affects the efficiency and effectives of public sector entities will help practitioners in improving strategic directions of their operations. This will also help academic researchers in developing ideas for future research.

Originality/value

Reflections presented here are based on the author's practical experiences over the past 40 years as a program manager and as a government auditor.

Details

Journal of Accounting & Organizational Change, vol. 10 no. 1
Type: Research Article
ISSN: 1832-5912

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Article
Publication date: 1 April 1992

James Guthrie

Seeks to provide an overview of the direction of change and toassess the “success” of performance auditing in Australia inthe last decade. Identifies the tension between…

Abstract

Seeks to provide an overview of the direction of change and to assess the “success” of performance auditing in Australia in the last decade. Identifies the tension between the concepts of “administrative effectiveness” and “policy”. Reviews the recent Australian National Audit Office (1991) efficiency audit of programme evaluation and identifies tensions between performance auditing and evaluation. Poses the question: who will audit the Auditor‐General?

Details

Managerial Auditing Journal, vol. 7 no. 4
Type: Research Article
ISSN: 0268-6902

Keywords

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