Supreme audit institutions and public value: Demonstrating relevance

Abstract

Supreme Audit Institutions (SAIs) have an important role in ensuring public sector accountability; their main activities being managing the audit of public sector entities’ financial statements and assessing probity/compliance, providing advice to parliamentary committees, and undertaking performance audits. Standards issued by the International Organization of SAIs encourage SAIs to recognize the value they deliver through their activities and to demonstrate that to citizens, Parliament, and other stakeholders. The recognition of the need to be democratically accountable for efficiency and effectiveness is one aspect of public value, which is also concerned with the just use of authority (Moore, 2013). The purpose of this article is to develop the components of a SAI's public value and, through a comparative international study, to analyze how SAIs’ report on the public value they deliver. Analyzing reporting against the model developed in this article indicates that SAIs reporting prioritizes critiques to increase public sector efficiency and effectiveness, rather than government policy. In addition, it finds SAIs generally fail to discuss any negative consequences of their work. SAIs are encouraged to develop new ways to demonstrate their ongoing relevance.

Public sector audit in contemporary society: A short review and introduction

“…Cordery and Hay () have analysed the components of what make the SAIs’ deliver public value. They performed an international comparison by content analysis of the reportings in English from the SAIs in 16 countries, 8 European and 7 Commonwealth countries and USA.…”

“…Whether the efforts to restore the international organisations' legitimacy by making them auditable, also have improved these big, international organisations' effectiveness, is an open question. Cordery and Hay (2019) have analysed the components of what make the SAIs' deliver public value. They performed an international comparison by content analysis of the reportings in English from the SAIs in 16 countries, 8 European and 7 Commonwealth countries and USA.…”

Are Latin American performance audits leading to changes?

“…So, the results suggest a direct relationship between the importance given to the stakeholders and the level of corruption. SAIs obtain legitimacy and support through being independent and building trust (Cordery & Hay, ) while reducing corruption through professionalization (Gustavson & Sundström, ). In Latin America, as has been shown, auditees' trust of their SAI is crucial to becoming a believer and, so, to avoid reactionary behaviors.…”

“…In Latin America, as has been shown, auditees' trust of their SAI is crucial to becoming a believer and, so, to avoid reactionary behaviors. In order to reinforce this trust, SAIs need to improve their external scrutiny through peer reviews and show exemplary operational capacity and full disclosure of their works (Barrett, ; Cordery & Hay, ). The lack of disclosure is common for developing countries, as shown by Open Budget Index 2017.…”

“…The first group includes, among others, the works of Brown and Craft () and Johnston (), focused on the US General Accounting Office, Hatherly and Parker () on Australia, and Pollitt et al () and Torres et al () on Europe. The implementation of recommendations by the auditees is a measure of client satisfaction; therefore, public value could be assessed by how many SAI recommendations the auditees accept and act upon (Cordery & Hay, ; Gendron, Cooper, & Townley, ). These papers analyze the content of the audit reports, the type of performance audits, the type of recommendations, and the changes introduced in the audited entities after the performance audit reports.…”