Performance Audit Scope and the Independence of the Australian Commonwealth Auditor‐General

McCrae, Michael; Vada, Henni

doi:10.1111/1468-0408.00034

Cited by 11 publications

(8 citation statements)

References 5 publications

(11 reference statements)

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“…Given that: (a) the VfM audit has begun to be used, not only as a means to carry out a financial audit, but as a powerful tool with which managers, politicians, regulators and consultants can reform public sector bodies in order to improve performance and accountability (Power, ); (b) the similarity across private and public sectors of the audit's broad aim (McCrae & Vada, ; Chowdhury et al ., ); and (c) the literature still lacking empirical research on the practice of the VfM audit and its impact on the audited bodies (Glynn, ; Guthrie & Parker, ; Bowerman et al ., ; Chowdhury et al ., ), there is a clear need to examine auditor and client expectations and perceptions of the performance of the VfM audit in public organisations. This is likely to help in identifying a potential perception performance gap between the two parties.…”

Section: Literature Reviewmentioning

confidence: 99%

Value for Money and Audit Practice in the UK Public Sector

2015

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Summary: This paper uses both role theory and audit expectations gap theory to critically evaluate the ability of Value for Money (VfM) audit procedures to improve performance in UK public sector organisations. The paper reports on an empirical study of seventeen auditors and twenty two representatives of VfM client organisations. Specifically, the study has the following objectives; to examine auditors" and clients" expectations and perceptions about the ability of the VfM audit to improve public sector organisations" performance;  to examine, from both auditors" and clients" perspectives, the impact of the interplay of personal (the VfM auditors" competence relevance of skills, experience and knowledge of the public bodies" activities), interpersonal (task interdependence between the external VfM auditors and the clients) and external factors (the ambiguity of the VfM audit process) on the VfM audit performance; and  to identify the nature of potential role conflicts in the VfM audit environment along with the causes and consequences of such potential conflicts.The results show that the VfM audit was perceived as an important potential means with which to improve institutional performance in the public sector, but had been poorly implemented in the audited bodies. While the majority of the VfM auditors interviewed took an extremely positive view of their own achievements in terms of improving public institutions" performances and delivering VfM services, the majority of the clients that we interviewed were not convinced of their auditors" competence to carry out a VfM audit effectively, and to provide them with valuable recommendations.Our results show that differences in expectations and perceptions of role between the external VfM auditors and the auditees give rise to significant conflict. Three types of role conflict

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Section: Literature Reviewmentioning

confidence: 99%

Value for Money and Audit Practice in the UK Public Sector

2015

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“…The main task of the performance audit, as one of the types of public audit is a constant and comprehensive audit of three "E" -economy, efficiency and effectiveness (McCrae & Vada, 1997) of public procurement is carried out by all higher institutions of public audit.…”

Section: Independent Journal Of Management and Production (Ijmandp)mentioning

confidence: 99%

Audit Assessment of the Effectiveness of Public Procurement Procedures

Drozd

Pysmenna

Pohribna

et al. 2021

Ind. Jour. Manag. & Prod.

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The article seeks describing the benefits and challenges faced by auditors in assessing the effectiveness of public procurement procedures in terms of applying the methodology for calculating efficiency, economy and effectiveness, taking into account the risks of procurement in e-auctions. Quantitative risk parameters are calculated using data of probabilistic indicators of procurement risk assessment according to the ratio of the number of relevant procedures (sub-threshold and above-threshold) to the total number of procurement procedures. Statistical valuation methods are used for the cost risk assessments and calculation of the aggregate risk indicator of public procurement. The calculations are performed using the data of the open e-procurement system ProZorro for all announced procurements in 2018-2019. We analyzed the methods, indicators and the extent to which the study of the public procurement effectiveness via bibliographic and case studies is performed. As a result, the majority of methods cover four components of assessing the public procurement efficiency - targeted efficiency, cost-effectiveness, organizational efficiency, efficiency of budget expenditures for public procurement. This does not provide an assessment of the automated systems’ impact on the procurement procedures results and on possible savings due to the use of certain procurement procedures. To comprehensively assess the procurement efficiency in e-bidding, the authors propose considering four key risks: the risk of cancellation of the procurement procedure, the risk that the procurement procedure will not take place, the risk of appealing the procurement, the risk of disqualification. As a result of risks calculations under the sub-threshold and above-threshold procurement, individual values of risks and their aggregate indicator are determined. This will adjust the scope of audit procedures to verify individual procurements and identify weaknesses in the procurement management system. We believe that the methodology of auditing the procurement effectiveness, taking into account the quantitative and qualitative parameters of procurement risks, will be a useful audit tool to determine the effectiveness of the use of public funds under individual procurements and identify areas of cost-effectiveness for the state budget funds.

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“…Several researchers have claimed that the government is accountable to the public through oversight bodies such as the SAI/OAG or the Accounting General's Office in most jurisdictions (Barton, 2009;Funnell, 1997;Funnell and Cooper, 1998;Hamburger, 1989;Lee, 2008;Norton and Smith, 2008;Persaud andMcNamara, 1993/1994;Radcliffe, 1998Radcliffe, , 2008. This accountability is established by an evaluation of management's decisions on the use of an entity's resources to achieve its specified objectives (Funnell and Wade, 2012;Funnell and Cooper, 1998;McCrae and Vada, 1997). The SAI and the Auditor-General are independent of the executive in jurisdictions that follow a Westminster system of governance.…”

Section: Literature Reviewmentioning

confidence: 99%

“…The SAI and the Auditor-General are independent of the executive in jurisdictions that follow a Westminster system of governance. This independence is enshrined by common law and in national Audit Acts, but cannot be taken for granted (Funnell and Wade, 2012;Funnell and Cooper, 1998;McCrae and Vada, 1997).…”

Section: Literature Reviewmentioning

confidence: 99%

External performance audit in New Zealand public health: a legitimacy perspective

Nath

Othman

Laswad

2019

QRAM

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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.

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Performance Audit Scope and the Independence of the Australian Commonwealth Auditor‐General

Cited by 11 publications

References 5 publications

Value for Money and Audit Practice in the UK Public Sector

Value for Money and Audit Practice in the UK Public Sector

Audit Assessment of the Effectiveness of Public Procurement Procedures

External performance audit in New Zealand public health: a legitimacy perspective

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