Supreme audit institutions in a high‐impact context: A comparative analysis of performance audit in four Nordic countries

Johnsen, Åge; Reichborn-Kjennerud, Kristin; Carrington, Thomas; Jeppesen, Kim Klarskov; Taro, Külli; Vakkuri, Jarmo

doi:10.1111/faam.12188

Cited by 40 publications

(44 citation statements)

References 58 publications

(119 reference statements)

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“…Public sector performance audit (PA) activities emerged in the 1970s and have continued to be applied in various forms across government levels (local, state, and federal) to the present time (English & Skaerbaek, 2007; Guthrie & Parker, 1999; Leeuw, 1996). Today, PA work is a widely recognized and accepted feature of public administration and has become a key element in the mandate of Auditor‐General offices (AGOs) worldwide, including Australia (Parker, Jacobs, & Schmitz, 2018; English, 2007; Johnsen et al., 2019; Justesen & Skaerbaek, 2010). Australia has been described by Pollitt and Bouckaert (2011, p. 117) as member of the “core NPM group,” in which PA practice as part of the New Public Management (NPM) is highly institutionalized and the number of PAs has significantly increased over recent decades (see Table 1).…”

Section: Introductionmentioning

confidence: 99%

Auditor and auditee engagement with public sector performance audit: An institutional logics perspective

Parker

Schmitz

Jacobs³

2020

Financ Acc Manag

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In the context of contemporary public sector performance audit practice in Australia, this study provides significant insights into performance auditors’ and auditees’ apparent logics and attitudes to performance audits. Employing a documentary analysis and in‐depth semistructured interviews with senior audit leaders from all Australian Auditor‐General jurisdictions, performance auditors’ and auditees’ attitudes toward performance audits and their intentions, strategies, and responses were explored through the lens of institutional logics. Empirical evidence reveals that performance auditors’ logics have gradually moved toward greater stakeholder engagement with auditees, parliamentarians, and the media, while preserving their performance audit prerogatives. Auditees appear to become more receptive to performance auditors’ engagement strategies and consultation attempts if auditors maintain a collaborative attitude. Both parties occasionally apply bridging and buffering strategies in situations where their logics are not aligned with those of the other stakeholder group. This study discovered that competing logics held by performance auditors and auditees are in some respects drawn closer together, while differences nonetheless co‐exist, although often in an uneasy partnership.

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Section: Introductionmentioning

confidence: 99%

Auditor and auditee engagement with public sector performance audit: An institutional logics perspective

Parker

Schmitz

Jacobs³

2020

Financ Acc Manag

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“…The article also shows that media plays an important role in linking the public, which is the main audience for media, with parliaments and the national audit offices. Johnsen et al (2019) replicated a survey in Denmark, Finland and Sweden (and Estonia), which Reichborn-Kjennerud originally used for collecting data on the impact of performance audit on public administration in Norway. They then pooled the data from the four Nordic cases and analysed common determinants of how the auditees perceived four dimensions of impacts, in order to explore the mechanisms behind the assumed well-functioning Nordic accountability regime in governmental audit.…”

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confidence: 99%

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

Johnsen

2019

Financ Acc Manag

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This article gives a short review of recent research on public sector audit, and then introduces six articles in a special issue on public sector audit in contemporary society. Many countries have developed their audit institutions and expanded the audit activities in particular since the 1980s. New public management and the theory of the ‘audit society’ explain much of this development well, also in some international organizations, but some countries have also experienced a contraction in the audit activities in the public sector. Moreover, literature on public sector audit outside the Anglo‐American and North European contexts, and especially from Africa, Asia and Latin‐America, is limited. There are big variations in how audit institutions are organized, in what they produce, in their relations to stakeholders and media, and in their impacts on organizations and society. Overall, auditors are little active in the fight against corruption, and the Napoleonic court system for organizing supreme audit institutions seems to be little effective. The audit institutions in the Anglo‐American and Nordic accountability regimes seem to be relatively effective, but the recent research show that auditors' independence and relevance are persistent challenging issues in public sector audit.

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“…By analyzing the risks and benefits involved, managers might be able to affect the likelihood and the impacts. Further, echoing the views of Lapsley (2008) and Johnsen et al (2019), we expect performance audits to receive more attention in the public sector because many intangibles are not recognized. This may however lead to effort being expended in audits instead of in core operations (Olson et al, 2001).…”

Section: Discussionmentioning

confidence: 97%

“…Recently the use of social media and information technology has brought about changes in how we obtain organization-specific information (see Quattrone, 2016;Xun and Guo, 2017). Media attention may affect organizational perceptions (Johnsen et al, 2019), and especially the negative tone of social media discussion tends to have a link to decreasing performance and stock prices (Xun and Guo, 2017). However, in the public sector, the links between social media sentiment and performance may need to be assessed based on stakeholders' perceptions of performance, that is, through survey data like in this paper.…”

Section: Introductionmentioning

confidence: 99%

Reputation and financial reporting in Finnish public organizations

Rautiainen

Luoma‐aho

2021

JPBAFM

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PurposeThis article analyzes the links between financial reports and reputation in the context of Finnish public sector organizations. In general, the paper discusses the accounting treatment of intangible and tangible assets and the quality and relevance of public sector financial reporting.Design/methodology/approachFor data, we combine three data sets: financial statement information of eight anonymous Finnish public organizations, the results of a reputation survey among their key stakeholders (N = 914) and a sample of the social media sentiment around the organizations.FindingsOur findings suggest that a decrease in spending and, surprisingly in the nonprofit sector, an increase in the surplus, indicate better perceived financial performance. An increase in surplus is positively linked with the reputational factors, for example, trust. However, disclosing excessive amounts of information, for example, in financial reporting seems to contribute to negative discussions on social media.Practical implicationsWe highlight the importance of managing intangibles, including those not recognized in the balance sheet, such as reputation. We present three propositions with potential managerial relevance.Originality/valueDespite the considerable amount of financial information disclosed by public sector organizations, few studies have analyzed its relevance or connection to reputation. This first-of-a-kind paper combines intangible and tangible assets by analyzing how financial data and intangible reputation are linked in the public sector accounting context. Six reputational factors were discovered, and financial performance was found to correlate with trust in the public sector.

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Supreme audit institutions in a high‐impact context: A comparative analysis of performance audit in four Nordic countries

Cited by 40 publications

References 58 publications

Auditor and auditee engagement with public sector performance audit: An institutional logics perspective

Auditor and auditee engagement with public sector performance audit: An institutional logics perspective

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

Reputation and financial reporting in Finnish public organizations

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