Performance auditing in the public sector: a case study of Sri Lanka

Citation

Lalith, P. (2010), "Performance auditing in the public sector: a case study of Sri Lanka", Journal of Accounting & Organizational Change, Vol. 6 No. 4. https://doi.org/10.1108/jaoc.2010.31506dad.001

Performance auditing in the public sector: a case study of Sri Lanka

Article Type: Doctoral research abstracts From: Journal of Accounting & Organizational Change, Volume 6, Issue 4

Pathirage Lalith

Purpose – This study aims to investigate as to why the Auditor General’s Department of Sri Lanka (AGD) needs a performance auditing (PA) system to enhance the public sector accountability system of the country. Further it aims to explore the ways and means of implementing a formal PA system. In so doing this study reviews the existing role of the AGD and its contribution to the enhancement of public accountability system of the country and examines the audit management functions and process of the AGD in the social, economic and political context of Sri Lanka within which the AGD operates.Design/methodology/approach – New institutional sociological (NIS) theory framework, more specifically the institutional rational dynamic model developed by Dillard et al. (2004), was adopted to explore the broader social level criteria and forces which influence the auditing practices of the AGD. The case study research approach has been adopted as the research strategy. The data were collected through a total of 30 in-depth interviews using open-ended questionnaires and archival documents. The interviewees were selected from different management levels in the AGD.Findings – The findings indicate that the practices of the AGD had not changed substantially, along with the social, economic and public administrative changes and developments that took place in the public sector auditing profession around the world. The factors such as the foreign donor’s support for institutional developments in the AGD, lack of political support, bureaucratic influences, insufficient operational independence and traditional organisational culture of the AGD significantly affect the development of PA practices at the AGD. Also the findings reveal that the audit management failures and resource constraints affected the existing practices of the AGD. The main rationale for implementing a formal PA system in the AGD is to enhance the public accountability system of the country. The findings also suggest that to achieve PA implementation task, the AGD has to depend on international assistance and has to negotiate with the political and public administrative authorities.Research limitations/implications – This thesis makes an important contribution to the development of public sector auditing practices in developing countries by providing evidence on how organisational and institutional forces affect the public sector auditing in a developing country such as Sri Lanka.Originality/value – No prior research has attempted to examine performance auditing practice in the Sri Lankan context. This study adds to the literature on performance auditing, especially in the context of developing countries with an example from Sri Lanka.

Keywords: Public sector auditing, Performance audit, Auditor General Office, Sri Lanka, Public sector

Research type – Qualitative case study

Master of Commerce (Research)

Institution – La Trobe University, School of Accounting, Victoria, Australia

Supervisor – Professor Zahirul Hoque

Contact e-mail – sakhan@csu.edu.au; lalithkumara@hotmail.com