Democracy, accountability and audit: the creation of the UK NAO as a defence of liberty

Abstract

PurposeThe study focusses on explaining why advocates for reform to state audit in the United Kingdom (UK) in the early 1980s, focussed on improving the links between the new National Audit Office (NAO) and Parliament, rather than on traditional notions of audit independence. The study shows how this focus on the auditor's link to Parliament depends on a particular concept of liberty and relates this to the wider literature on the place of audit in democratic society.Design/methodology/approachUnderstanding the issue of independence of audit in protecting the liberties and rights of citizens needs addressed. In this article, the authors investigate the creation of audit independence in the UK in the National Audit Act (1983). To do so, the authors employ a neo-Roman concept of liberty to historical archives ranging from the late 1960s to 1983.FindingsThe study shows that advocates for audit reform in the UK from the 1960s to the 1980s were arguing for an extension to Parliament's power to hold the executive to account and that their focus was influential on the way that the new NAO was established. Using a neo-Roman concept of liberty, the authors show that they believed Parliamentary surveillance of the executive was necessary to secure liberty within the UK.Research limitations/implicationsThe neo-Roman republican concept of liberty extends previous studies in considering the importance of audit for public accountability, the preservation of liberty and democracy.Practical implicationsPublic sector audit can be a fundamentally democratic activity. Auditors should be alert to the constitutional importance of their work and see parliamentary accountability as a key objective.Originality/valueThe neo-Roman concept of liberty extends previous studies in considering the importance of audit for public accountability, preservation of liberty and democracy.

The future of public audit

“…Free et al (2020) provide a survey of historical movement through a Canadian lens and report the work of a Canadian parliamentary committee travelling to and studying other jurisdictions, their work forming a report that was the basis of the Auditor General Act, 1977. There is a need for local histories and details to understand the formation of ideas and practices and the way in which new practices took hold and were accepted, and so practice expanded to give government auditors the audit mandates we see today (Ferry & Midgley, 2022). This could be in the contemporary period of the past 50 years or so, or at other important junctures.…”

“…The “power of the purse” was parliament's main weapon by which it was able, over many centuries, finally to wrest power from the Crown. Ferry and Midgley (2022) built on this work, showing that it is vital that the auditor is linked to the legislature, so that it functions as an independent institution within Parliament rather than an institution independent of Parliament.…”

“…Audit is fundamental to accountability. Private audit underpins accountability of corporations to uphold trust in capitalism (Mueller et al., 2015), while public audit underpins accountability of the state to ensure trust in democracy (Ferry & Midgley, 2022). Audit is therefore more than a mere technical discipline, being at the heart of trust in the institutions that shape our everyday way of life.…”

Public auditing practice in Iran: objectives and scopes

“…After the Islamic Revolution in 1979, the SACI was separated from the Ministry of Economic Affairs and Finance and integrated with the Islamic parliament (under Articles 54-55 of Constitution Act). This parallels reforms in other places which moved the Supreme Audit Institution from being a function of the executive to becoming a function of the legislature (Ferry and Midgley, 2022). The Public Audit Act was compiled in 1982 and subsequently revised in 1983, 1984 and 1991.…”

Actorhood of the European Court of Auditors: a visual analysis

“…Of the different levels of government in the public sector auditing literature, the national level is the most investigated, with a focus on national public sector audit institutions (also called Supreme Audit Institutions, SAIs), followed by the local level (Nerantzidis et al, 2020;Mattei et al, 2021). The findings show a variety of practices in national and local public sector auditing (Bonollo, 2019;Mattei et al, 2021), relating to the scope of the audit, the degree of inspection and the independence of the public auditors (Johnsen, 2019;Ferry and Ahrens, 2021;Ferry and Midgley, 2021;Cordery and Hay, 2021b). Considering the growing relevance of public sector audit institutions as guardians of the public interest (Hay and Cordery, 2018), the little-understood communication practices they enact to gain legitimacy deserve further attention.…”