IDEAS home Printed from https://ideas.repec.org/a/eee/crpeac/v83y2022ics1045235421001039.html
   My bibliography  Save this article

Fighting or supporting corruption? The role of public sector audit organizations in Brazil

Author

Listed:
  • Lino, André Feliciano
  • Azevedo, Ricardo Rocha de
  • Aquino, André Carlos Busanelli de
  • Steccolini, Ileana

Abstract

Public sector audit organizations are usually expected to fight corruption. Yet they may also end up being involved in, and contributing to, sustaining corruption. Relying on multiple interviews, this paper sheds new light on the concrete mechanisms through which corruption is sustained by Brazilian regional Courts of Accounts and their members. Our findings show how politico-economic elites’ private interests infiltrate the Courts via the appointment of high-ranked officials and how those officials may resort to a variety of actions to perpetrate forms of selective justice and to weaken the audit findings of these organizations – which ends up strengthening and supporting corruption. Additionally, we provide evidence of collective action emerging to challenge the current situation and reinforce the role Courts could play as watchdogs of the public interest. We contribute to the literature by highlighting the deleterious role of the interface between political and economic interests and the functioning of audit organizations. Moreover, relying on the literature of first- and second-order corruption, we discuss the specific conditions and mechanisms which enable corruption in public audit organizations. Finally, we present practical implications providing alternative views to the status quo.

Suggested Citation

  • Lino, André Feliciano & Azevedo, Ricardo Rocha de & Aquino, André Carlos Busanelli de & Steccolini, Ileana, 2022. "Fighting or supporting corruption? The role of public sector audit organizations in Brazil," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 83(C).
  • Handle: RePEc:eee:crpeac:v:83:y:2022:i:c:s1045235421001039
    DOI: 10.1016/j.cpa.2021.102384
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1045235421001039
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.cpa.2021.102384?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Blume, Lorenz & Voigt, Stefan, 2011. "Does organizational design of supreme audit institutions matter? A cross-country assessment," European Journal of Political Economy, Elsevier, vol. 27(2), pages 215-229, June.
    2. Markus Seyfried, 2016. "Setting a fox to guard the henhouse? Determinants in elections for presidents of supreme audit institutions: Evidence from the German federal states (1991–2011)," Managerial Auditing Journal, Emerald Group Publishing, vol. 31(4/5), pages 492-511, April.
    3. Grajzl, Peter & Silwal, Shikha, 2020. "Multi-court judging and judicial productivity in a career judiciary: Evidence from Nepal," International Review of Law and Economics, Elsevier, vol. 61(C).
    4. Isaksson, Ann-Sofie & Bigsten, Arne, 2012. "Institution Building with Limited Resources: Establishing a Supreme Audit Institution in Rwanda," World Development, Elsevier, vol. 40(9), pages 1870-1881.
    5. Filgueira, Fernando & Avritzer, Leonardo, 2011. "Corrupção e controles democráticos no Brasil," Textos para Discussão - CEPAL/IPEA, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 28145 edited by Cepal.
    6. Reichborn-Kjennerud, Kristin & González-Díaz, Belén & Bracci, Enrico & Carrington, Thomas & Hathaway, James & Jeppesen, Kim Klarskov & Steccolini, Ileana, 2019. "Sais work against corruption in Scandinavian, South-European and African countries: An institutional analysis," The British Accounting Review, Elsevier, vol. 51(5).
    7. Maria Gustavson & Bo Rothstein, 2013. "Can Auditing Generate Trust? The Organization of Auditing and the Quality of Government," Palgrave Macmillan Books, in: Marta Reuter & Filip Wijkström & Bengt Kristensson Uggla (ed.), Trust and Organizations, chapter 0, pages 41-63, Palgrave Macmillan.
    8. Edgardo Buscaglia, 2011. "On Best and Not So Good Practices for Addressing High-level Corruption Worldwide: An Empirical Assessment," Chapters, in: Susan Rose-Ackerman & Tina Søreide (ed.), International Handbook on the Economics of Corruption, Volume Two, chapter 16, Edward Elgar Publishing.
    9. Abu Shiraz Rahaman, 2009. "Independent financial auditing and the crusade against government sector financial mismanagement in Ghana," Qualitative Research in Accounting & Management, Emerald Group Publishing Limited, vol. 6(4), pages 224-246, October.
    10. Sikka, Prem & Lehman, Glen, 2015. "The supply-side of corruption and limits to preventing corruption within government procurement and constructing ethical subjects," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 28(C), pages 62-70.
    11. Eric A. Posner, 2010. "Professionals or Politicians: The Uncertain Empirical Case for an Elected Rather than Appointed Judiciary," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 26(2), pages 290-336.
    12. Caramanis, Constantinos & Lennox, Clive, 2008. "Audit effort and earnings management," Journal of Accounting and Economics, Elsevier, vol. 45(1), pages 116-138, March.
    13. Dean Neu & Jeff Everett & Abu Shiraz Rahaman & Daniel Martinez, 2013. "Accounting and networks of corruption," Post-Print hal-00980294, HAL.
    14. Everett, Jeff & Neu, Dean & Rahaman, Abu Shiraz, 2007. "Accounting and the global fight against corruption," Accounting, Organizations and Society, Elsevier, vol. 32(6), pages 513-542, August.
    15. Dean Neu & Jeff Everett & Abu Shiraz Rahaman, 2013. "Internal Auditing and Corruption within Government: The Case of the Canadian Sponsorship Program," Contemporary Accounting Research, John Wiley & Sons, vol. 30(3), pages 1223-1250, September.
    16. Benjamin Saunders & Julius Sim & Tom Kingstone & Shula Baker & Jackie Waterfield & Bernadette Bartlam & Heather Burroughs & Clare Jinks, 2018. "Saturation in qualitative research: exploring its conceptualization and operationalization," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(4), pages 1893-1907, July.
    17. Lee J. Alston & Marcus André Melo & Bernardo Mueller & Carlos Pereira, 2016. "Brazil in Transition: Beliefs, Leadership, and Institutional Change," Economics Books, Princeton University Press, edition 1, number 10745.
    18. Neu, Dean & Everett, Jeff & Rahaman, Abu Shiraz & Martinez, Daniel, 2013. "Accounting and networks of corruption," Accounting, Organizations and Society, Elsevier, vol. 38(6), pages 505-524.
    19. Rick Stapenhurst & Jack Titsworth, 2001. "Features and Functions of Supreme Audit Institutions," World Bank Publications - Reports 11363, The World Bank Group.
    20. Neu, Dean & Everett, Jeff & Rahaman, Abu Shiraz, 2015. "Preventing corruption within government procurement: Constructing the disciplined and ethical subject," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 28(C), pages 49-61.
    21. DeAngelo, Linda Elizabeth, 1981. "Auditor size and audit quality," Journal of Accounting and Economics, Elsevier, vol. 3(3), pages 183-199, December.
    22. Elisa Bonollo, 2019. "Measuring supreme audit institutions’ outcomes: current literature and future insights," Public Money & Management, Taylor & Francis Journals, vol. 39(7), pages 468-477, October.
    23. Anna Samsonova-Taddei, 2013. "Social Relations and the Differential Local Impact of Global Standards: The Case of International Standards on Auditing," Abacus, Accounting Foundation, University of Sydney, vol. 49(4), pages 506-538, December.
    24. repec:gig:joupla:v:3:y:2011:i:2:p:141-172 is not listed on IDEAS
    25. Carlos Santiso, 2015. "Why budget accountability fails? The elusive links between parliaments and audit agencies in the oversight of the budget," Brazilian Journal of Political Economy, Center of Political Economy, vol. 35(3), pages 601-621.
    26. Nick Manning & Rick Stapenhurst, 2002. "Strengthening Oversight by Legislatures," World Bank Publications - Reports 11336, The World Bank Group.
    27. Souryal, Sam S. & Diamond, Deanna L., 2001. "The rhetoric of personal loyalty to superiors in criminal justice agencies," Journal of Criminal Justice, Elsevier, vol. 29(6), pages 543-554.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tiago Cardao-Pito, 2023. "How to identify norms, laws, and regulations that facilitate illicit financial flows and related financial crimes," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 27(4), pages 674-686, August.
    2. Bottausci, Chiara & Robson, Keith, 2023. "“He Hears”: An essay celebrating the 25 year anniversary of The Audit Society," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 97(C).
    3. Dunne, Neil J. & Brennan, Niamh M. & Kirwan, Collette E., 2023. "How the Big Four maintain and defend logic equilibrium at concurrent performances," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 94(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abdul-Baki, Zayyad & Uthman, Ahmad B. & Kasum, Abubakar S., 2021. "The role of accounting and accountants in the oil subsidy corruption scandal in Nigeria," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 78(C).
    2. Lassou, Philippe J.C. & Hopper, Trevor & Ntim, Collins, 2021. "How the colonial legacy frames state audit institutions in Benin that fail to curb corruption," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 78(C).
    3. Sargiacomo, Massimo & Ianni, Luca & D’Andreamatteo, Antonio & Servalli, Stefania, 2015. "Accounting and the fight against corruption in Italian government procurement: A longitudinal critical analysis (1992–2014)," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 28(C), pages 89-96.
    4. Changwony, Frederick Kibon & Paterson, Audrey S., 2019. "Accounting practice, fiscal decentralization and corruption," The British Accounting Review, Elsevier, vol. 51(5).
    5. Ferry, Laurence & Funnell, Warwick & Oldroyd, David, 2023. "A genealogical and archaeological examination of the development of corporate governance and disciplinary power in English local government c.1970–2010," Accounting, Organizations and Society, Elsevier, vol. 109(C).
    6. Pianezzi, Daniela & Ashraf, Muhammad Junaid, 2022. "Accounting for ignorance: An investigation into corruption, immigration and the state," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 86(C).
    7. Ferry, Laurence & Zakaria, Zamzulaila & Zakaria, Zarina & Slack, Richard, 2018. "Framing public governance in Malaysia: Rhetorical appeals through accrual accounting," Accounting forum, Elsevier, vol. 42(2), pages 170-183.
    8. Neu, Dean & Everett, Jeff & Rahaman, Abu Shiraz, 2015. "Preventing corruption within government procurement: Constructing the disciplined and ethical subject," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 28(C), pages 49-61.
    9. Jeppesen, Kim K., 2019. "The role of auditing in the fight against corruption," The British Accounting Review, Elsevier, vol. 51(5).
    10. Ionel Bostan & Mihaela Brindusa Tudose & Raluca Irina Clipa & Ionela Corina Chersan & Flavian Clipa, 2021. "Supreme Audit Institutions and Sustainability of Public Finance. Links and Evidence along the Economic Cycles," Sustainability, MDPI, vol. 13(17), pages 1-24, August.
    11. Sargiacomo, Massimo & Everett, Jeff & Ianni, Luca & D'Andreamatteo, Antonio, 2024. "Auditing for fraud and corruption: A public-interest-based definition and analysis," The British Accounting Review, Elsevier, vol. 56(2).
    12. Nurul Nazlia Jamil, 2020. "The Power of Political Connections: Review on the Impacts of Audit Committee and Corporate Governance," Journal of Public Administration and Governance, Macrothink Institute, vol. 10(1), pages 333347-3333, December.
    13. Norton, Simon D., 2018. "Suspicion of money laundering reporting obligations: Auditor compliance, or sceptical failure to engage?," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 50(C), pages 56-66.
    14. Mulcahy, Mark & Beck, Matthias & Carr, Michelle & Hourigan, Niamh, 2019. "Novel approaches to the regulatory control of financial services providers: The importance of cultural context," The British Accounting Review, Elsevier, vol. 51(5).
    15. Huseyin Cicek & Suleyman Dikmen, 2021. "External Audit And Fiscal Transparency: An Empirical Analysis," Public administration issues, Higher School of Economics, issue 5, pages 7-26.
    16. Hoskin, Keith, 2015. "“What about the box?” Some thoughts on the possibility of ‘corruption prevention’, and of ‘the disciplined and ethical subject’," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 28(C), pages 71-81.
    17. Di Guardo, Maria Chiara & Marrocu, Emanuela & Paci, Raffaele, 2016. "The effect of local corruption on ownership strategy in cross-border mergers and acquisitions," Journal of Business Research, Elsevier, vol. 69(10), pages 4225-4241.
    18. Kitto, Andrew R., 2024. "The effects of non-Big 4 mergers on audit efficiency and audit market competition☆," Journal of Accounting and Economics, Elsevier, vol. 77(1).
    19. Hye‐Jeong Nam, 2018. "The Impact of Mandatory IFRS Transition on Audit Effort and Audit Fees: Evidence from Korea," Australian Accounting Review, CPA Australia, vol. 28(4), pages 512-524, December.
    20. Hwang, Seokyoun & Sarath, Bharat & Han, Seung-youb, 2022. "Auditor independence: The effect of auditors’ quality control efforts and corporate governance," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 47(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:crpeac:v:83:y:2022:i:c:s1045235421001039. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/critical-perspectives-on-accounting/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.