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Negotiating the credibility of performance auditing

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  • Funnell, Warwick
  • Wade, Margaret

Abstract

This paper reports the results of a longitudinal field study of a performance audit which used in-depth interviews and observation to examine the process by which auditees and auditors in the Australian National Audit Office (ANAO) negotiated their relationship. The findings enhance understanding of auditee reactions to both the practice of performance auditing and the auditors themselves and the impact that these have on the credibility of performance auditing. Using the lens of Oliver's typology of strategic responses, the study confirmed the prevalence of auditee responses to performance auditing by the ANAO which ranged from co-operative acquiescence and co-operation to confrontational defiance. The paper addresses recent and ongoing calls for more studies of public sector auditing in action to deepen our understanding of the responses or manoeuvring of auditors and auditees during the process of performance auditing. A key contribution of the paper is confirmation that performance auditing continues to be a contested activity and its credibility in practice remains uncertain. The empirical (and historical) evidence suggests that audits that are perceived as especially politically sensitive can provoke active forms of resistance, including avoidance and defiance.

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  • Funnell, Warwick & Wade, Margaret, 2012. "Negotiating the credibility of performance auditing," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 23(6), pages 434-450.
    • Handle: RePEc:eee:crpeac:v:23:y:2012:i:6:p:434-450
    DOI: 10.1016/j.cpa.2012.04.005
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    2. Roussy, Mélanie, 2013. "Internal auditors’ roles: From watchdogs to helpers and protectors of the top manager," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 24(7), pages 550-571.
    3. Wen-Min Lu & Qian Long Kweh & Kai-Chu Yang, 2022. "Multiplicative efficiency aggregation to evaluate Taiwanese local auditing institutions performance," Annals of Operations Research, Springer, vol. 315(2), pages 1243-1262, August.
    4. Agus Bambang Irawan & Janet McIntyre-Mills, 2016. "Application of Critical Systems Thinking to Performance Auditing Practice at the Indonesian Supreme Audit Institution: Issues and Challenges," Systems Research and Behavioral Science, Wiley Blackwell, vol. 33(1), pages 24-44, January.
    5. Muhammad Azizul Islam & Craig Deegan & Rob Gray, 2018. "Social compliance audits and multinational corporation supply chain: evidence from a study of the rituals of social audits," Accounting and Business Research, Taylor & Francis Journals, vol. 48(2), pages 190-224, February.

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