Evidence About the Value of Public Sector Audit to Stakeholders

31 Pages Posted: 10 Jan 2017

See all articles by Carolyn J. Cordery

Carolyn J. Cordery

Aston University; Victoria University of Wellington - School of Accounting and Commercial Law

David Hay

University of Auckland - Business School

Date Written: November 2016

Abstract

We examine evidence about the value of public sector auditing to stakeholders in New Zealand. We apply models of auditing from previous research in mainstream auditing literature to identify gaps in the existing understanding of public sector audit. We obtained evidence by conducting interviews and focus groups with experts employed by the Office of the Auditor-General. We examined documents including audit reports, reports to Parliament, management letters and other documents. We observed Parliamentary Select Committees, examined news media reports about public sector auditing and reviewed social media. Of the explanations that we derived from the existing literature, there is evidence about auditing’s function in agency and management control; there is limited evidence about signaling and insurance; mixed evidence about governance; and no evidence about the confirmation hypothesis, although it is potentially valuable. We conclude that public audit is valuable to stakeholders in many ways. We also make recommendations about potential changes, and we suggest concerns about certain issues.

Suggested Citation

Cordery, Carolyn J. and Hay, David, Evidence About the Value of Public Sector Audit to Stakeholders (November 2016). Available at SSRN: https://ssrn.com/abstract=2895806 or http://dx.doi.org/10.2139/ssrn.2895806

Carolyn J. Cordery (Contact Author)

Aston University ( email )

Aston Business School
Aston Triangle
Birmingham, B4 7ET
United Kingdom

Victoria University of Wellington - School of Accounting and Commercial Law ( email )

Faculty of Commerce and Administration
PO Box 600
Wellington
New Zealand

David Hay

University of Auckland - Business School ( email )

12 Grafton Rd
Auckland, 1010
New Zealand

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