The Value of Public Sector Audit: Literature and History

39 Pages Posted: 10 Jan 2017

See all articles by David Hay

David Hay

University of Auckland - Business School

Carolyn J. Cordery

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

Date Written: November 2016

Abstract

This paper explores the value of financial statement auditing in the public sector. The study applies theory about auditing from the private sector as well as the public sector to explore ways in which public auditing sector can be expected to be valuable. It finds that there are a number of complementary explanations for the value of public audit, including agency, signaling, insurance, management control, confirmation and governance explanations. The evidence from research and history is generally consistent with the agency and management control explanations. There is some support for the signaling and insurance explanations, while research evidence suggests that governance has differing impact in the public sector compared to the private. The confirmation hypothesis and governance explanations are also potentially relevant. Auditing in the public sector is an area where more research is valuable. The paper concludes with issues for further investigation.

Suggested Citation

Hay, David and Cordery, Carolyn J., The Value of Public Sector Audit: Literature and History (November 2016). Available at SSRN: https://ssrn.com/abstract=2895809 or http://dx.doi.org/10.2139/ssrn.2895809

David Hay

University of Auckland - Business School ( email )

12 Grafton Rd
Auckland, 1010
New Zealand

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

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
227
Abstract Views
1,511
rank
154,898
PlumX Metrics