The supreme audit institutions readiness to uncertainty

Zbyslaw Dobrowolski

doi:10.9770/jesi.2020.8.1(36)

Abstract

The inefficient fight against the COVID-19 pandemic and earlier insufficient readiness to counteract terrorist attacks raise the question about the role of the supreme audit institutions (SAIs) in the situation, in which decision-makers take decisions in uncertainty conditions. The states did not prove themselves in conditions of uncertainty. In all countries, the situation is the same, too late decisions regarding anti-epidemic quarantine, lack of necessary measures to protect doctors and patients, too few respirators. Based on the analysis of several randomly selected SAIs from different parts of the Globe, this study found that the audit methodology tailored to a predictable environment became inappropriate in uncertainty conditions. Most of analysed SAIs did not find weak signals and wild cards related to pandemic. Those who found such signals did not use them in foresight, which results that parliaments, governments and the public are not ready for global threats. It creates risks for entrepreneurs.

Highlights

In most countries, modern SAIs started their activities at the beginning of the 20th century
Analysed SAIs have statutory rights to determine audit topics and audited entities. They use audit methodology based on risk assessment and ex-post audit approach
They publish audit results informing stakeholders which areas of government activities are proper against established audit criteria. 29 out of 33 analysed SAIs did not provide any information about their analysis of pandemic threat on their webpages

Summary

Introduction

Modern SAIs started their activities at the beginning of the 20th century. SAIs carried out only financial audits, and after II World War performance and compliance audits. The environment has changed from predicable to uncertainty. There is a research gap do SAIs ready to carry out their audit service in uncertainty conditions. Based on the analysis of several randomly selected SAIs, it was found that the audit methodology tailored to a predictable environment became inappropriate in uncertainty conditions. The research method is discussed, followed by the analysis of several SAIs from all inhabited continents. Based on study results one may offer the potentially radical suggestion that SAIs should change their current auditing methodology; otherwise, they will be useless for states, firms and societies; This paper ends conclusion and opportunities for further research

Objectives

Methods

Results

Conclusion