Supreme Audit Institutions Research Articles

Enhancing Accountability in Public Resources: Legal Protection of Supreme Audit Institution Heads in Africa – A Study of Tanzania, Kenya, South Africa, Sierra Leone, and Gambia

Enhancing Accountability in Public Resources: Legal Protection of Supreme Audit Institution Heads in Africa – A Study of Tanzania, Kenya, South Africa, Sierra Leone, and Gambia

An examination of Pacific nations ‘legislatures’ interactions with Supreme Audit Institutions and the impact on audit quality

Purpose The purpose of this paper is to report a study of public accountability within the political and economic structures that characterise Pacific nations. The authors examine audit quality with respect to Pacific Island nations’ governmental reporting to investigate ways to improve accountability in a region that is economically and environmentally challenged. Design/methodology/approach The authors examine whether audit quality in Pacific Island nations is associated with the practical arrangements of Supreme Audit Institutions (SAIs), taking into account external factors. The “practical arrangements” include the independence of a SAI (regarding its staffing and funding) and also the requirement for it to report to the Executive. The financial setting in each jurisdiction has been seen to impact the quality of financial reporting and auditing. The authors examine mediating factors such as income, political stability and education that may also impact audit quality. This study uses publicly available databases as well as jurisdictional annual reports and the associated audit opinions and management letters (where available). Jurisdictional reports on public financial management were also analysed. Findings The authors find that public sector audit quality is low in many Pacific countries, concluding that public accountability is impaired. While the authors recommend changes to the practical arrangements that can improve audit quality, the mediating factors also impact audit quality. They argue that a renewed focus on financial capability could enhance public accountability in these nations, but there are limiting factors that are difficult to overcome. Practical implications There are problems in providing accountability for public sector activities in Pacific nations. The authors suggest that improvements to the appointment and funding of SAIs to enhance their independence will help to reduce these issues. Originality/value The authors present a framework for analysing SAIs’ practical arrangements and audit quality that includes variables that may mediate the effects of these practical arrangements. They apply the model to 20 Pacific jurisdictions, showing that the practical arrangements of a SAI directly impact audit quality. Nevertheless, there are instances where audit quality is poor despite good practical arrangements, implying that mediating factors also play a substantial role in determining audit quality of a SAI.

External Audit Quality and its Factors in Palestinian Municipalities: Moderating Effect of Supreme Audit Institutions

Objectives: The study aims to investigate the relationship between external audit quality and its factors (i.e., auditor characteristics, audit firm attributes, and effectiveness of municipal internal control), as well as the moderation effect of supreme audit institutions between external audit quality and its selected factors, as perceived by accountants and internal auditors in Palestinian municipalities. Methods: To achieve the objectives, questionnaires were distributed to 309 accountants and internal auditors in 155 Palestinian municipalities. They have firsthand knowledge of the financial statements under audit and are in constant communication with external auditors. Smart PLS 3 was used for statistical analysis. Results: The results revealed that the direct relationships between audit quality, auditor characteristics, and effectiveness of municipal internal control were positive. These relationships were also positively moderated by supreme audit institutions. The relationship between audit quality and audit firm attributes was also positive, but it was negatively moderated by supreme audit institutions. Conclusion: Audit firms, audit profession regulators, and municipality administrators can use these findings as useful guidelines in determining the factors of audit quality required in municipal audit engagements. This study encourages future research to examine other moderators, such as politics and public elections.

New development: Assurance on public sector sustainability reporting—time to be proactive

IMPACT This article highlights the relevance of assurance of sustainability reporting (SR) in the public sector, discussing who can develop the assurance process and what standards can be used for this purpose. It provides a contribution in an original and new area that will be of interest to standard setters, supreme audit institutions, practitioners and scholars in the field of public sector accounting and auditing. The article contributes to the creation of a legitimate space for SR for public sector entities.

Digital transformation in public sector auditing: between hope and fear

ABSTRACT This paper explores the imaginaries of public sector auditors on public value creation due to digital transformation (DT). The study is based on the case of the Supreme Audit Institution (SAI) in Norway – the Office of the Auditor General (OAG). We find diverging imaginaries regarding the potential impact of DT on creating public value through enhancing public accountability that represent the gap between technological hopes and human fears regarding DT for public value creation. This gap highlights the need to properly explore the downsides of DT in the theory and practice of public sector auditing.

TURKISH COURT OF ACCOUNTS: ANALYZING FINANCIAL AUDIT, DIGITALIZATION, AI IMPACT

Countries’ audit institutions play a critical role in financial management and accountability. These institutions perform tasks such as financial accountability, detection of corruption and errors, evaluation of government performance, accountable public administration, transparency and legal oversight, and prevention of legal violations, contributing to public trust. The Court of Accounts Presidency is the supreme audit institution of the Republic of Türkiye. This study sequentially addresses the audit process and procedure of the Court of Accounts, the impact of digitization, information technologies, and artificial intelligence on the audit process. Additionally, an evaluation of the institution’s technology and information infrastructure is conducted. A detailed assessment is presented regarding the Court of Accounts’ use of the Court of Accounts Data Analysis System (VERA), Unified Data Transfer System (BVAS), and Audit Management Program (SayCap). The institution’s technology and information infrastructure related to big data and big data analytics are evaluated based on the institution’s reports and documents. Finally, evaluating the potential integration of artificial intelligence into these systems is considered highly beneficial. For human resources in the field to be more proficient in current technologies, implementing artificial intelligence, big data, and big data analytics in the audit domain of public institutions is seen as highly advantageous. Additionally, it is strongly recommended that educational institutions training audit professionals incorporate courses on data analytics, big data, big data analytics, machine learning, and artificial intelligence into their curricula.

The impact of risk management implementation on the effectiveness of SAI’s internal audit function

Internal audits play an important role in monitoring the achievement of organizational objectives. However, research on the factors influencing the success of internal audits remains limited. This study aims to investigate the effectiveness of BPK’s Itama (The Inspectorate General of the Audit Board of the Republic of Indonesia) functions, hypothesized to be influenced by risk management policy implementation. This study employs quantitative methods; data were collected via surveys and analyzed using structural equation modeling (SEM) to test theory-based hypotheses. Results reveal a significant positive correlation between risk management policy implementation and the effective functioning of Itama. Additionally, the study identifies key factors determining the success of risk management policy implementation: economic, social, and political conditions. Therefore, internal auditors of supreme audit institutions must consider these external factors when implementing risk management policies. This study contributes to understanding internal audit effectiveness by highlighting the impact of external economic, social, and political conditions.

The limited scope of BPK audit and comparison with other supreme audit institutions

The role of BPK is to audit state finance management and accountability in all entities that manage state finances freely and independently. However, the BPK's authority to conduct audits of state finances is debatable and limited when some laws and regulations are inconsistent. This study uses legal doctrinal and comparative legal research to explore improvements/harmonization of regulations and comparisons with SAI in other countries regarding the scope of audit that can be carried out to strengthen BPK's authority further. The results of this study indicate that there is still a conflict of norms regarding the scope of BPK's audit, as well as a conflict of interpretation of what it means to audit the management and accountability of state finances in Indonesia. Improving the legal instruments that regulate the scope of BPK audits can avoid conflicting norms and multiple interpretations of legal norms, allowing BPK's role to be more optimal in the future.

Analysis of the Role of BPK RI in Promoting Organizational Capacity Development of ASEANSAI in the Period 2018-2023

The development of international audit organizations is crucial for enhancing accountability, transparency, and integration of public sector financial management globally. In Southeast Asia, the establishment of the Association of Southeast Asian Nations Supreme Audit Institutions (ASEANSAI) is significant for fostering regional cooperation in financial auditing. The Supreme Audit Agency of the Republic of Indonesia (BPK RI) plays a pivotal role as the ASEANSAI Secretariat, supporting and developing the organization's performance. As ASEANSAI matures, organizational capacity development becomes a key challenge. This study aims to analyze BPK RI's role in enhancing ASEANSAI's organizational capacity during the 2018-2023 period, utilizing Dillen et al.'s (2019) theory of transition from managerial roles to strategic experts and Walters' (2019) theory of organizational capacity development. Employing a qualitative methodology and conducting in-depth semi-structured interviews with 18 individuals from both internal and external ASEANSAI, the study identified several suboptimal aspects in the Secretariat's role and ASEANSAI's capacity development, including human resource management, financial management, and organizational performance stability. The findings suggest that these issues stem from inadequate strategic human resource development, limited financial resources, and external environmental changes such as the COVID-19 pandemic and regional socio-humanitarian issues.

Enhancing sustainable progress: an analysis of supreme audit institutions' performance audits and information disclosure practices

Enhancing sustainable progress: an analysis of supreme audit institutions' performance audits and information disclosure practices

Oversight of financial violations in light of digital transformations

In the era of the digital revolution, the methods of financial violations that constitute an attack on public funds are changing, which places a burden on the supreme audit institutions. They must be aware of the existence of challenges that constitute an obstacle in the practice of traditional oversight, which necessitates a gradual shift towards the use of modern techniques in review and auditing that are compatible with that information revolution, which is an eye. What the Central Auditing Organization of the Arab Republic of Egypt seeks to achieve The research revealed, with its results, the connection between the digital revolution and the inevitability of improving the oversight process to develop reliable digital evidence proving the occurrence of financial violations, and then prosecuting corruption to protect public funds. It concluded with recommending the inevitability of working to intensify the provision of legislative, material, and professional capabilities that support the work of members of the oversight body

Advancing a Holistic Framework for Classifying SAI Performance Audit Impact Factors: Integrated Scientific Assumptions

The article raises the problem of the need to reconceptualize the framework of the impact factors of the performance audit performed by Supreme Audit Institutions (SAI). The research aims to identify performance audit impact factors and propose an expanded, comprehensive framework. To implement the aim, the integrative method of scientific literature analysis is employed. Throughout the study, a systematic exploration of scientific literature is conducted to identify and organize hypothetical and previously researched impact factors discussed by scholars. The identified factors are aggregated according to their characteristics, meaning, or nature, and are divided into ten pillars: accountability, context, legitimacy, political overtones, quality of the performance audit, social relations, stakeholders, logic of public administration, the multifunctional activity of performance audit, and the individual. The broader framework of performance audit impact factors created will be beneficial for further research into managing these factors, enhancing evaluation opportunities, enabling performance auditors to mitigate associated risks, and capitalizing on the positive properties of these factors.

"Action and reaction" - a new public sector effectiveness assessment methodology

The main contribution of the paper is the development of a new way of assessing the efficiency of public administration using statistical methods - multivariate regression (identification of exogenous factors) and residual analysis (identification of regression residuals). The methodology presented is intuitive, practical and, if appropriately set up, globally applicable for the evaluation of a wide range of processes taking place in the public sector on the principle of "action and reaction". Putting the methodology into practice can go some way to satisfying the "taxpayer hunger" for information about whether the money they pay in taxes is being used wisely. It makes it possible to assess efficiency in a particular institution or to compare similar processes in several institutions over a given period of time. The methodology has been developed on the basis of audit findings (prepared by the supreme audit institution for the public sector in a democratic state) and their implications. The developed methodology brings a new perspective to the traditional claim that public sector effectiveness is virtually impossible to measure and that factors for objective evaluation of public sector managers cannot be easily established.

Digital Transformation of Supreme Audit Institution (SAI) —A Mini-Review on the Case of Romanian Court of Accounts (RCA)

The present endeavor compellingly addresses the issue of the necessity and importance of IT support for the control and audit activities of the Romanian Court of Accounts (RCA), making reference to the institution's operations in the context of the digitization of central public administration and the implications for the conducted control/audit. Subsequently, we highlight the most significant strategic elements recently established regarding the digitization of the RCA' activities, as well as the potential advantages. The final part is dedicated to conclusions, the limitations of our research, and future research directions, focusing on addressing issues that have been inadequately addressed so far. The paper is intended for specialists in the field, audit professionals, the academic community, etc. In addressing the topic, we considered relevant literature, including our previous research, as well as bibliographic material provided by the RCA, indicated in the „References” section.

Public Financial Management (PFM) Laws and Audit Quality in Ghana: The Moderating Role of Auditor-Client Relationship

Purpose: This study examines the extent to which public financial management (PFM) laws contribute to audit quality in the public sector and how the auditor-client relationship moderates this effect. 
 Design/Methodology/Approach: This study used a quantitative survey research design to collect data from about 400 public sector auditors working with Ghana's Supreme Audit Institution (SAI), the Audit Service, by adopting the contextual factor of the IAASB's framework for Audit Quality using the PLS-SEM method of analysis.
 Findings: The study found that in the Public Sector, Public Financial Management (PFM) laws positively influence audit quality, while auditor-client relationships also negatively contribute to audit quality. 
 Furthermore, it was also established that the auditor-client relationship negatively moderated the relationship between Public Financial Management (PFM) laws and audit quality.
 Implications/Research Limitation: The results of this study extend and add to the growing empirical studies on Public Financial Management (PFM), audit quality and the field of public sector auditing. However, the study will be limited to only public sector auditors working with Ghana's Supreme Audit Institution (SAI), the Audit Service.
 Practical Implication: The study results have the prospect of encouraging policy-makers to strengthen the independence and improve the capacity of the State Auditor (i.e. Ghana Audit Service) through appropriate PFM laws that seek to improve auditor-client relationships through relevant compliance and enforcement mechanisms.
 Originality/Value: This study is the first to directly examine how the Public Financial Management (PFM) laws contribute to audit quality in Ghana and how the auditor-client relationship moderates this effect. 
 Nevertheless, this study differs from other prior empirical research on the basis of the method employed and the context of the study.

The Influence of Work Experience and Audit Expertise on Audit Quality in the Public Sector: The Moderating Effect of Professional Qualification

Purpose: This study analyses the degree to which audit experience and expertise affect audit quality through the moderating effect of Professional Qualification. 
 Design/Methodology/Approach: The study used a survey research design from a sample of about 400 audit staff of the Ghana Audit Service. 
 A conceptual framework was developed by adopting the framework for Audit Quality (2014) instituted by the International Auditing and Assurance Board (IAASB) and tested using PLS-SEM method of analysis.
 Findings: The study found that in the Public Sector, both audit expertise and experience influence audit quality.
 Furthermore, it was also established that professional qualification did not moderate the relationships between work experience, audit expertise and audit quality. 
 Professional qualification in audit quality was also found to be significant in the study.
 Implications/Research Limitation: The results of the study extend and add to the growing empirical research studies on audit expertise, work experience, and audit quality, as well as in the area of public sector auditing. However, the study was limited to only public sector auditors working with Ghana's Supreme Audit Institution (SAI), the Audit Service.
 Practical Implication: The study results have the prospect of encouraging top management to intensify the need to consciously institute and implement strategies that incorporate people with the requisite audit expertise and experience into the public sector to maximise and enhance audit quality.
 Originality/Value: This study is the first from a public sector perspective that directly examines how audit quality is influenced by audit expertise and experience and how professional qualification moderates this effect.
 Nonetheless, this research is distinct from other empirical studies on the basis of the method used and the context of the study.

Participatory Auditing: Lessons from Philippines and South Korea and its Implementation in The SAI of Indonesia

Supreme Audit Institutions (SAI) are crucial for promoting accountability and transparency, especially in countries such as Indonesia, where corruption and government fraud are widespread. These institutions help the public monitor the government and ensure that public funds are used effectively and efficiently. Achieving good governance requires close collaboration between people and SAI. This study emphasizes the importance of people's participation in Indonesia SAI (Badan Pemeriksa Keuangan/BPK) to identify public issues for auditing purposes. Every year, the BPK conducts over 500 audits, including financial, performance, and auditing with special purposes. BPK produces over 9,000 findings that the government needs to follow. This paper highlights the success stories of participation audits in the Philippines and South Korea, and how Indonesian SAI can learn from both. By working together with the public, audit reports can benefit stakeholders and contribute to better governance.

Ways to implement risk management in the fight against organised crime

The aggravation of the state of operations under martial law poses a threat to a wide range of rights, interests of individuals and society. To prevent further deterioration of the crime situation, it is necessary to find progressive mechanisms to combat organised crime. The purpose of this study was to formulate scientifically sound proposals for the development of mechanisms for combating organised crime and counteracting the establishment of corrupt ties by criminals in institutions, organisations, and enter- prises, especially those belonging to the national security system. According to the purpose and specifics of the subject under study, the historical approach, comparative legal, and systemic-structural methods were employed. The study outlined the content of the processes of organising the management of subsystems involved in ensuring national security. The need to ensure its effective implementation is evidenced by statistical data on the complication of the operational situation in certain regions, the general socio-po- litical situation and threatening trends in the criminalisation of society. The state of stagnation does not correspond to the course of the most secure development of society, and therefore the main task of the state is to actively protect citizens from dangerous anti-social, criminal, and violent manifestations. It was sub- stantiated that the success of counteracting these negative phenomena depends primarily on the unification of certain mechanisms at both the international and domestic levels, including standards. It was proved that legal forms of combating organised crime should be improved towards the betterment of standards in the risk management system, specifically, ensuring information security, and stimulating the protection of information flows. It was argued that the introduction of the term “compliance audit” into certain laws of Ukraine defining the basic principles of implementation of the state financial control, audit of financial statements, and organisation of audit activities will provide a positive effect in combating these negative phenomena. The findings of this study can serve as the basis for the preparation of forecast and programme documents by supreme audit institutions, anti-corruption bodies, and the business community to counteract manifestations of organised crime, identify and eliminate corrupt ties with criminals

Bibliometric Framing of Research Trends Regarding Public Sector Auditing to Fight Corruption and Prevent Fraud

Combating corruption is an important objective of the United Nations Sustainable Development Group, with the aim of helping public institutions to act in the interest of citizens. To ensure this objective is met, the spending of public money is controlled by the supreme audit institutions of each country. The objective of this paper is to identify trends in and approaches to the field of auditing in the public sector to combat corruption and prevent fraud. To achieve the proposed objective, a bibliometric analysis of papers published in the journals indexed in Web of Science Clarivate Analytics for the period 2003–2022 was carried out; selection criteria was based on instances of the keywords “public audit fraud”, “supreme institution”, and “fraud” appearing in a sample of 528 articles. The results showed that there was a research interest in this field, with the trend being more pronounced since 2017. The main topics addressed were those related to the performance audit and the fight against corruption, and the most relevant studies were conducted on samples from Nordic European countries. Thus, it is confirmed that the external audit in public sector is an important factor in combating the phenomenon of corruption in the public sector, both by detecting fraud and by offering recommendations aimed at making the activity of this sector more efficient.

The Effect of Whistleblowing and Professional Skepticism on Fraud Detection Fraud and Fraud Audit Training as a Moderating

Fraud detection was examined through a survey. Specifically, this research investigated the impact of whistleblowing and professional skepticism on fraud detection by using moderating variable fraud audit training. All of the respondents were auditors working for the Supreme Audit Institution Representative of Papua Province in Indonesia. Using a census sampling method. The data collection technique used an instrument through a questionnaire. A total of 40 auditors participated in this study. The application of moderated regression analysis (MRA) approach for data analysis. This study yields three key findings. Firstly, whistleblowing exerts a notable influence on fraud detection. Secondly, professional skepticism demonstrates a significant impact on fraud detection. Thirdly, the study reveals that fraud audit training does not act as a moderator in the relationship between professional skepticism and fraud detection. The implications of this results for internal and external audits of government enhance professional skepticism through fraud audit training and using whistleblowing information.