Performance audit: a cross-country comparison of practices of selected supreme audit institutions
Abstract
This study aims to present the conceptual framework of performance audits impact that support our investigation of the process of selection performance audit topics at Supreme audit institutions (SAIs) level. The results of the study include the technique for choosing performance audit topics used by the Lithuanian SAI and the SAI of the Netherlands. The data were gathered using case studies and semi-structured in-depth interviews with the field experts. The results of the study demonstrated a range and the complexity of the arguments underlying the selection of the topic for performance audits: there are no mandatory requirements or standards governing the process; therefore, every SAI chooses its own path. Each SAI applies specific performance audit topics selection methods determined by their original long-term practical experience. Selecting right topics for performance audit is a task of crucial importance for each SAI. Gathering information about all areas and making a decision where to perform an audit is an important part of strategic research efforts. Data collection is a lengthy process that takes place throughout the year. Each SAI has a framework for strategic and annual planning that has clearly set deadlines, uses a transparent qualified and/or quantified approach to ranking risks/audit proposals, and is based on the criteria relating to materiality, topicality, feasibility and added value.
Keyword : supreme audit institutions, performance audit, audit topics, impact, case study
How to Cite
Vasiliauskienė, M., & Daujotaitė, D. (2019). Performance audit: a cross-country comparison of practices of selected supreme audit institutions. Business: Theory and Practice, 20, 352-362. https://doi.org/10.3846/btp.2019.33
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Algemene Rekenkamer (2017) About the Algemene Rekenkamer http://www.rekenkamer.nl/Over_de_Algemene_Rekenkamer
Brans M et al. (2017) Impact of performance audit on the Administration: a Belgian study (2005–2010) Managerial Auditing Journal 32 (3): 251-275. https://doi.org/10.1108/MAJ-04-2016-1368
Bringselius L, Lemne M (2017) What qualifications does good state audit require? Statsvetenskaplig Tidskrift 119 (1): 111-136.
Carrington T (2017) Consulting or holding to account?: The Swedish National Audit Office as an agent of change in public administration. Statsvetenskaplig Tidskrift 119 (1): 91-109.
De Vries J (2014) The Netherlands and the Polder model questioning the Polder model concept. In: BMGN – Low Countries Historical Review. Royal Netherlands Historical Society 129 (1): 99-111. https://doi.org/10.18352/bmgn-lchr.9449
Funkhouser M (2011) Accountability, performance and performance auditing: reconciling the view of scholars and auditors. In: Ling T Lonsdale J, Wilkins P (Ed). Performance auditing contributing to accountability in democratic government. Cheltenham, Northampton: Edward Elgar Publishing, 175-208. https://doi.org/10.4337/9780857931801.00017
Gerring J (2004) What is a case study and what is it good for? The American Political Science Review 98 (2): 341-354. https://doi.org/10.1017/S0003055404001182
Gomes MB (2001) Performance audit argument: a public management policy analysis about supreme audit institutions role. Control by Evaluacióndel DesempeñoGubernamental. Caracas.
Haferkorn P (2018) Risk communication from an audit team to its client. In: Bieder C and Bourrier M (Ed). Risk communication for the future. Springer, Cham, 139-153. https://doi.org/10.1007/978-3-319-74098-0_10
INTOSAI (2016) Appendix to ISSAI 3100 – Building a Performance Audit Function http://www.issai.org/data/files/3B/76/AF/B3/92909510F72E9F859B59F9C2/ISSAI%203100_Ap-pendix_ingl_s.pdf
INTOSAI (2016) ISSAI 3000 – Standard for Performance Auditing. – INTOSAI Professional Standards Committee.INTOSAI (2016) ISSAI 3100 – Guidelines on Central Concepts for Performance Auditing. INTOSAI Professional Standards Committee.
INTOSAI (2013) ISSAI 300 – Fundamental Principles of Performance Auditing. Adopted by XXI INCOSAI 2013, Beijing, China.
Johnsen A et al. (2019) Supreme audit institutions in a high-impact context: A comparative analysis of performance audit in four Nordic countries. Financial Accountability & Management 35 (2), May 2019: 158-181. https://doi.org/10.1111/faam.12188
Kim et al. (2017) The strategic options of supreme audit institutions: the case of four Nordic Countries. Financial Accountability & Management 33 (2), May 2017: 146-170. https://doi.org/10.1111/faam.12118
Law on Internal Control and Internal Audit of the Republic of Lithuania No. IX-1253. Valid Consolidated Version as of 01/01/2013 created in 2002 December the 10th https://esmas.lrs.lt/portal/legalAct/lt/TAD/TAIS.197703/dYSRaZnPfI
Law on State Audit Performance of the Republic of Lithuania in 1995 May the 30th No. I-907 consolidated version as of 04/02/2015 https://www.etar.lt/portal/lt/legalAct/TAR.61BB05227699/vHVdNOBKRh
Lee et al. (2016) A comprehensive survey of government auditors’ self-efficacy and professional development for improving audit quality. SpringerPlus 5: 1263. https://doi.org/10.1186/s40064-016-2903-0
Leeuw FL (1996) Performance auditing, new public management and performance improvement: questions and answers. Accounting, Auditing & Accountability Journal 9 (2): 92-102. https://doi.org/10.1108/09513579610116385
Lonsdale J (1999a) Impacts. In: Girre X, Lonsdale J, Mul R, Pollitt C, Summa H, Waerness M (Ed). Performance or compliance? Performance Audit and Public Management in Five Countries. Oxford, New York, 171-193.
Lonsdale J (1999b) Methods. In: Girre X, Lonsdale J, Mul R, Pollitt C, Summa H, Waerness M (Ed). Performance or compliance? Performance audit and public management in five countries. Oxford, New York, 125-148.
Lonsdale J (2011a) Introduction. In: Ling T, Lonsdale J, Wilkins P (Ed). Performance auditing. Contributing to accountability in democratic government. Cheltenham, Northampton: Edward Elgar Publishing, 1-21.
Lonsdale J (2011b) The right tools for the job? Methods, choice and context. In Ling T, Lonsdale J, Wilkins P (Ed). Performance auditing. Contributing to accountability in democratic government. Cheltenham, Northampton: Edward Elgar Publishing, 95-117.
Masiulevicius A, Lakis V (2018) Differentiation of performance materiality in audit based on business needs. Entrepreneurship and Sustainability 6 (1): 115-124. http://doi.org/10.9770/jesi.2018.6.1(9)
Mul R, Pollitt C (1999) Criteria. In: Girre X, Lonsdale J, Mul R, Pollitt C, Summa H, Waerness M (Ed) Performance or compliance? Performance audit and public management in five countries. Oxford, New York, 79-104. https://doi.org/10.1093/acprof:oso/9780198296003.003.0006
National Audit Office of Lithuania (2002) Public audit requirements auditor. In: General’s order no. V-26 created in 2002 February the 21st http://www.vkontrole.lt/page.aspx?id=32
National Audit Office of Lithuania (2013) Code of service ethics of the auditor general of the Republic of Lithuania. In: The Auditor General’s order no. V-116 created on 2013 June the 7th http://www.vkontrole.lt/page.aspx?id=388
National Audit Office of Lithuania (2016) The State’s performance audit action plan 2016 https://www.vkontrole.lt/dokumentai/veikla/Valstybes_kontroles_2016_m._veiklos_planas.pdf
National Audit Office of Lithuania (2017) The strategic plan of action of the National Audit Office of Lithuania for the years 2017–2019. In: The Auditor General’s law No. V-32 created in 2016 January the 26th https://www.vkontrole.lt/page.aspx?id=1695
National Audit Office of Lithuania (2017) Regulations http://www.vkontrole.lt/page.aspx?id=6
Nederlandse Grondwet (2017) http://www.denederlandsegrond-wet.nl/9353000/1/j9vvihlf299q0sr/vgrncyzdduxq
Pina V et al. (2016) Are performance audits useful? A Comparison of EU Practices. Administration & Society. SAGE Publications, 1-32.
Pollit C (1999) The management – audit interface. In: Girre X, Lonsdale J, Mul R, Pollitt C, Summa H, Waerness M (Ed). Performance or compliance? Performance audit and public management in five countries. Oxford, New York, 56-65. https://doi.org/10.1093/acprof:oso/9780198296003.003.0004
Pollit C (1999) The changing context. In: Girre X, Lonsdale J, Mul R, Pollitt C, Summa H, Waerness M (Ed). Performance or compliance? Performance audit and public management in five countries. Oxford, New York, 30-55. https://doi.org/10.1093/acprof:oso/9780198296003.003.0003
Put V (2011) Norms used: some strategic considerations from the Netherlands and the UK. In Ling T, Lonsdale J, Wilkins P (Ed). Performance auditing. contributing to accountability in democratic government. Cheltenham, Northampton: Edward Elgar Publishing, 75-94. https://doi.org/10.4337/9780857931801.00010
Put V, Turksema R (2011) Selection of topics. In: Ling T, Lonsdale J, Wilkins P (Ed). Performance auditing. Contributing to accountability in democratic government. Cheltenham, Northampton: Edward Elgar Publishing, 51-74. https://doi.org/10.4337/9780857931801.00009
Put V, Van Loocke E (2011) The impact of performance audit: a review of the existing evidence. In: Ling T, Lonsdale J, Wilkins P (Ed). Performance auditing. Contributing to accountability in democratic government. Cheltenham, Northampton: Edward Elgar Publishing, 175-208.
Raudla R et al. (2015) The impact of performance audit on public sector organizations: the case of Estonia. Public Organization Review 16: 217-233. https://doi.org/10.1007/s11115-015-0308-0
Reichborn-Kjennerud K (2014) Performance audit and the importance of the public debate. Evaluation – SAGE Publications 20 (3): 368-385. https://doi.org/10.1177/1356389014539869
Reichborn-Kjennerud K, Johnsen A (2015) Performance audits and supreme audit institutions’ impact on public administration: the case of the office of the auditor general in Norway.
Administration & Society – SAGE Publications, 1-25. https://doi.org/10.1177/0095399715623315
Reichborn-Kjennerud K, Vabo SI (2017) Performance audit as a contributor to change and improvement in public administration. Evaluation – SAGE Publications 23 (1): 6-23. https://doi.org/10.1177/1356389016683871
Simonaityte Z (2018) Choosing a performance or compliance audit topic at supreme audit institution. International scientific conference, February 8-9 2018. Abstracts of reports – Vilnius university, 31.
Strategy of Supreme Audit Institution 2016–2020 Auditor General’s of the Republic of Lithuania order no. V-59 created on 2016 March 22 https://www.vkontrole.lt/dokumentai/2016_strategija/Auksciausiosios_audito_instituci-jos_strategija_2016-2020.pdf
Summa H (1999) The subjects of study. In: Girre X, Lonsdale J, Mul R, Pollitt C, Summa H, Waerness M (Ed). Performance or compliance? Performance audit and public management in five countries. Oxford, New York, 66-78. https://doi.org/10.1093/acprof:oso/9780198296003.003.0005
Tarasova VI et al. (2018) Methodological provision for the assessment of audit risk during the audit of tax reporting. Enterpreneurship and Sustainability Issues 6 (1): 371-397. https://doi.org/10.9770/jesi.2018.6.1(23)
The European Court of Auditors (ECA) (2014) Peer review of the National Audit Office of Lithuania, 2014.
Yin RK (2009) case study research: design and methods (4th ed). SAGE Publications.
Algemene Rekenkamer (2017) About the Algemene Rekenkamer http://www.rekenkamer.nl/Over_de_Algemene_Rekenkamer
Brans M et al. (2017) Impact of performance audit on the Administration: a Belgian study (2005–2010) Managerial Auditing Journal 32 (3): 251-275. https://doi.org/10.1108/MAJ-04-2016-1368
Bringselius L, Lemne M (2017) What qualifications does good state audit require? Statsvetenskaplig Tidskrift 119 (1): 111-136.
Carrington T (2017) Consulting or holding to account?: The Swedish National Audit Office as an agent of change in public administration. Statsvetenskaplig Tidskrift 119 (1): 91-109.
De Vries J (2014) The Netherlands and the Polder model questioning the Polder model concept. In: BMGN – Low Countries Historical Review. Royal Netherlands Historical Society 129 (1): 99-111. https://doi.org/10.18352/bmgn-lchr.9449
Funkhouser M (2011) Accountability, performance and performance auditing: reconciling the view of scholars and auditors. In: Ling T Lonsdale J, Wilkins P (Ed). Performance auditing contributing to accountability in democratic government. Cheltenham, Northampton: Edward Elgar Publishing, 175-208. https://doi.org/10.4337/9780857931801.00017
Gerring J (2004) What is a case study and what is it good for? The American Political Science Review 98 (2): 341-354. https://doi.org/10.1017/S0003055404001182
Gomes MB (2001) Performance audit argument: a public management policy analysis about supreme audit institutions role. Control by Evaluacióndel DesempeñoGubernamental. Caracas.
Haferkorn P (2018) Risk communication from an audit team to its client. In: Bieder C and Bourrier M (Ed). Risk communication for the future. Springer, Cham, 139-153. https://doi.org/10.1007/978-3-319-74098-0_10
INTOSAI (2016) Appendix to ISSAI 3100 – Building a Performance Audit Function http://www.issai.org/data/files/3B/76/AF/B3/92909510F72E9F859B59F9C2/ISSAI%203100_Ap-pendix_ingl_s.pdf
INTOSAI (2016) ISSAI 3000 – Standard for Performance Auditing. – INTOSAI Professional Standards Committee.INTOSAI (2016) ISSAI 3100 – Guidelines on Central Concepts for Performance Auditing. INTOSAI Professional Standards Committee.
INTOSAI (2013) ISSAI 300 – Fundamental Principles of Performance Auditing. Adopted by XXI INCOSAI 2013, Beijing, China.
Johnsen A et al. (2019) Supreme audit institutions in a high-impact context: A comparative analysis of performance audit in four Nordic countries. Financial Accountability & Management 35 (2), May 2019: 158-181. https://doi.org/10.1111/faam.12188
Kim et al. (2017) The strategic options of supreme audit institutions: the case of four Nordic Countries. Financial Accountability & Management 33 (2), May 2017: 146-170. https://doi.org/10.1111/faam.12118
Law on Internal Control and Internal Audit of the Republic of Lithuania No. IX-1253. Valid Consolidated Version as of 01/01/2013 created in 2002 December the 10th https://esmas.lrs.lt/portal/legalAct/lt/TAD/TAIS.197703/dYSRaZnPfI
Law on State Audit Performance of the Republic of Lithuania in 1995 May the 30th No. I-907 consolidated version as of 04/02/2015 https://www.etar.lt/portal/lt/legalAct/TAR.61BB05227699/vHVdNOBKRh
Lee et al. (2016) A comprehensive survey of government auditors’ self-efficacy and professional development for improving audit quality. SpringerPlus 5: 1263. https://doi.org/10.1186/s40064-016-2903-0
Leeuw FL (1996) Performance auditing, new public management and performance improvement: questions and answers. Accounting, Auditing & Accountability Journal 9 (2): 92-102. https://doi.org/10.1108/09513579610116385
Lonsdale J (1999a) Impacts. In: Girre X, Lonsdale J, Mul R, Pollitt C, Summa H, Waerness M (Ed). Performance or compliance? Performance Audit and Public Management in Five Countries. Oxford, New York, 171-193.
Lonsdale J (1999b) Methods. In: Girre X, Lonsdale J, Mul R, Pollitt C, Summa H, Waerness M (Ed). Performance or compliance? Performance audit and public management in five countries. Oxford, New York, 125-148.
Lonsdale J (2011a) Introduction. In: Ling T, Lonsdale J, Wilkins P (Ed). Performance auditing. Contributing to accountability in democratic government. Cheltenham, Northampton: Edward Elgar Publishing, 1-21.
Lonsdale J (2011b) The right tools for the job? Methods, choice and context. In Ling T, Lonsdale J, Wilkins P (Ed). Performance auditing. Contributing to accountability in democratic government. Cheltenham, Northampton: Edward Elgar Publishing, 95-117.
Masiulevicius A, Lakis V (2018) Differentiation of performance materiality in audit based on business needs. Entrepreneurship and Sustainability 6 (1): 115-124. http://doi.org/10.9770/jesi.2018.6.1(9)
Mul R, Pollitt C (1999) Criteria. In: Girre X, Lonsdale J, Mul R, Pollitt C, Summa H, Waerness M (Ed) Performance or compliance? Performance audit and public management in five countries. Oxford, New York, 79-104. https://doi.org/10.1093/acprof:oso/9780198296003.003.0006
National Audit Office of Lithuania (2002) Public audit requirements auditor. In: General’s order no. V-26 created in 2002 February the 21st http://www.vkontrole.lt/page.aspx?id=32
National Audit Office of Lithuania (2013) Code of service ethics of the auditor general of the Republic of Lithuania. In: The Auditor General’s order no. V-116 created on 2013 June the 7th http://www.vkontrole.lt/page.aspx?id=388
National Audit Office of Lithuania (2016) The State’s performance audit action plan 2016 https://www.vkontrole.lt/dokumentai/veikla/Valstybes_kontroles_2016_m._veiklos_planas.pdf
National Audit Office of Lithuania (2017) The strategic plan of action of the National Audit Office of Lithuania for the years 2017–2019. In: The Auditor General’s law No. V-32 created in 2016 January the 26th https://www.vkontrole.lt/page.aspx?id=1695
National Audit Office of Lithuania (2017) Regulations http://www.vkontrole.lt/page.aspx?id=6
Nederlandse Grondwet (2017) http://www.denederlandsegrond-wet.nl/9353000/1/j9vvihlf299q0sr/vgrncyzdduxq
Pina V et al. (2016) Are performance audits useful? A Comparison of EU Practices. Administration & Society. SAGE Publications, 1-32.
Pollit C (1999) The management – audit interface. In: Girre X, Lonsdale J, Mul R, Pollitt C, Summa H, Waerness M (Ed). Performance or compliance? Performance audit and public management in five countries. Oxford, New York, 56-65. https://doi.org/10.1093/acprof:oso/9780198296003.003.0004
Pollit C (1999) The changing context. In: Girre X, Lonsdale J, Mul R, Pollitt C, Summa H, Waerness M (Ed). Performance or compliance? Performance audit and public management in five countries. Oxford, New York, 30-55. https://doi.org/10.1093/acprof:oso/9780198296003.003.0003
Put V (2011) Norms used: some strategic considerations from the Netherlands and the UK. In Ling T, Lonsdale J, Wilkins P (Ed). Performance auditing. contributing to accountability in democratic government. Cheltenham, Northampton: Edward Elgar Publishing, 75-94. https://doi.org/10.4337/9780857931801.00010
Put V, Turksema R (2011) Selection of topics. In: Ling T, Lonsdale J, Wilkins P (Ed). Performance auditing. Contributing to accountability in democratic government. Cheltenham, Northampton: Edward Elgar Publishing, 51-74. https://doi.org/10.4337/9780857931801.00009
Put V, Van Loocke E (2011) The impact of performance audit: a review of the existing evidence. In: Ling T, Lonsdale J, Wilkins P (Ed). Performance auditing. Contributing to accountability in democratic government. Cheltenham, Northampton: Edward Elgar Publishing, 175-208.
Raudla R et al. (2015) The impact of performance audit on public sector organizations: the case of Estonia. Public Organization Review 16: 217-233. https://doi.org/10.1007/s11115-015-0308-0
Reichborn-Kjennerud K (2014) Performance audit and the importance of the public debate. Evaluation – SAGE Publications 20 (3): 368-385. https://doi.org/10.1177/1356389014539869
Reichborn-Kjennerud K, Johnsen A (2015) Performance audits and supreme audit institutions’ impact on public administration: the case of the office of the auditor general in Norway.
Administration & Society – SAGE Publications, 1-25. https://doi.org/10.1177/0095399715623315
Reichborn-Kjennerud K, Vabo SI (2017) Performance audit as a contributor to change and improvement in public administration. Evaluation – SAGE Publications 23 (1): 6-23. https://doi.org/10.1177/1356389016683871
Simonaityte Z (2018) Choosing a performance or compliance audit topic at supreme audit institution. International scientific conference, February 8-9 2018. Abstracts of reports – Vilnius university, 31.
Strategy of Supreme Audit Institution 2016–2020 Auditor General’s of the Republic of Lithuania order no. V-59 created on 2016 March 22 https://www.vkontrole.lt/dokumentai/2016_strategija/Auksciausiosios_audito_instituci-jos_strategija_2016-2020.pdf
Summa H (1999) The subjects of study. In: Girre X, Lonsdale J, Mul R, Pollitt C, Summa H, Waerness M (Ed). Performance or compliance? Performance audit and public management in five countries. Oxford, New York, 66-78. https://doi.org/10.1093/acprof:oso/9780198296003.003.0005
Tarasova VI et al. (2018) Methodological provision for the assessment of audit risk during the audit of tax reporting. Enterpreneurship and Sustainability Issues 6 (1): 371-397. https://doi.org/10.9770/jesi.2018.6.1(23)
The European Court of Auditors (ECA) (2014) Peer review of the National Audit Office of Lithuania, 2014.
Yin RK (2009) case study research: design and methods (4th ed). SAGE Publications.