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…
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 sector auditing can be expected to be valuable. It shows that there are a number of complementary explanations that can be applied to examine the value of public audit, including agency, signaling, insurance, management control, governance and confirmation 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 is also potentially relevant. Reviewing the history of the development of public sector auditing functions shows that at least some developments were consistent with explanations such as agency theory and management control. Auditing in the public sector is an area where more research is valuable. The paper concludes with a discussion of issues for further investigation.
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Ken McPhail and Carolyn J. Cordery
The purpose of this paper is to reflect on the 2004 AAAJ special issue (SI): “Accounting and theology, an introduction: Initiating a dialogue between immediacy and eternity,” the…
Abstract
Purpose
The purpose of this paper is to reflect on the 2004 AAAJ special issue (SI): “Accounting and theology, an introduction: Initiating a dialogue between immediacy and eternity,” the relative immediate impact of the call for papers and the relevance of the theme to address issues in accounting today and in the future.
Design/methodology/approach
The paper is a reflection and is framed around three different modes of engagement with new perspectives as identified by Orlikowski (2015). These are religion as phenomenon, as perspective and as a worldview. The authors draw on Burrell and Morgan’s (1979) framework in order to explore the ontological and epistemological blinkers that have limited the attempts to explore accounting from a theological perspective.
Findings
The paper argues that historical and current structures can limit the manner in which accounting research uses theological perspectives. Indeed, the concerns of the initial SI remain – that the contemporary economic and knowledge system is in crisis and alternative ways of questioning are required to understand and respond to this system.
Research limitations/implications
As a reflection, this paper is subject to limitations of author bias relating to our beliefs, ethnicities and culture. The authors have sought to reduce these by drawing on a wide range of sources, critical analysis and the input of feedback from other scholars. Nevertheless, the narrative of impact remains a continuing story.
Originality/value
In drawing on both an original SI guest editor and a scholar for whom the 2004 SI has become a touchstone and springboard, this paper provides multiple viewpoints on the issue of accounting and theology.
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Ikenna Elias Asogwa, Maria Estela Varua, Rina Datt and Peter Humphreys
The purpose of this study is to present an in-depth examination of stakeholder engagement processes in non-governmental organisations (NGOs) from the perspective of NGO managers…
Abstract
Purpose
The purpose of this study is to present an in-depth examination of stakeholder engagement processes in non-governmental organisations (NGOs) from the perspective of NGO managers to enhance accountability and the effectiveness with which aid services are delivered. Specifically, demand-side (downward) accountability and the implications of an accountability system that is predominantly supply-side (upward) focused are explored.
Design/methodology/approach
This study draws on evidence gathered from 25 in-depth interviews with representatives of leading NGOs in Nigeria to explore and uncover the nature of stakeholder engagement and accountability processes in their respective organisations. This study shows prospects for entrenching organisational reform that balances power and influence that benefits the less economically powerful demand side of the stakeholders. A relevant aspect of stakeholder theory was used to frame the analysis.
Findings
The study reveals an overlay of a blanket engagement system and a seeming reluctance of NGOs to disclose critical information to the demand-side stakeholders (DSS), and suggests ways to meet sustainability demands and address the militating concerns. A perceived lack of understanding and prospects or outcomes of demand-side accountability are central to this; however, engagement outcomes that account for impact rather than output are explored and reported. The findings suggest that proper accountability involves adequate stakeholder engagement which is a prerequisite and paramount for sustainability.
Research limitations/implications
This study primarily delineates NGO managers’ views on NGO engagement and accountability dynamics. Future research may explore the perspectives of downward stakeholders themselves. The study highlights the concern for NGOs to maintain a defined stakeholder engagement process that resists external forces that may impact on their operations and derail their mission, resulting in duplication of services.
Practical implications
The study shows the implications of donors’ influence on accountability practices which can be improved by re-structuring supply-side stakeholders to significantly include DSS accountability requirements in the key performance indicators of NGOs in developing countries. The authors present a nuanced perspective to aid delivery and access that ensures improved services and more effective, impactful and sustainable aid which is of practical relevance to NGOs and their accountability mechanism.
Originality/value
This study deepens the understanding of the dynamics of stakeholder engagement and accountability processes and shows that the most effective way to deploy aid funds to meet sustainability goals is to draw on the experiences and local knowledge of the DSS. This would require an effective and results-driven dialogue among all the stakeholders involved. The proposed engagement and management framework contribute to theory and practice by fostering multi-stakeholder cooperation, DSS accountability and the advancement of sustainable development
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Dewan Mahboob Hossain and Md. Saiful Alam
The main objective of this article is to explore the discourses on social inequality in the annual reports of Bangladeshi NGOs.
Abstract
Purpose
The main objective of this article is to explore the discourses on social inequality in the annual reports of Bangladeshi NGOs.
Design/methodology/approach
To fulfil this objective, a discourse analysis was conducted on the latest annual reports of ten renowned NGOs in Bangladesh. The findings were interpreted from the impression management perspective.
Findings
It was found that the NGOs of Bangladesh are highlighting several social inequality issues such as poverty, gender inequality, inequality related to getting healthcare, legal and education facilities, etc. in their annual reports. Several impression management tactics were applied in the narratives of the annual reports. The NGOs portrayed themselves as “problem solvers” who are the saviors of distressed people.
Practical implications
This study will facilitate improving the understanding of NGO communication. Policymakers will be able to understand the disclosures of NGOs and consider the necessity to provide guidance that may lead to better information dissemination through reports.
Originality/value
This study will contribute to the limited literature on NGO disclosures from the context of developing economies. In the context of NGO, this research is methodologically novel as it applies discourse analysis and interprets the findings through the lens of impression management.
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Anders Dysvik, Robert Buch and Bård Kuvaas
The purpose of this paper is to investigate whether the relationship between employees’ knowledge donating and managers’ knowledge collecting is moderated by social leader-member…
Abstract
Purpose
The purpose of this paper is to investigate whether the relationship between employees’ knowledge donating and managers’ knowledge collecting is moderated by social leader-member exchange (SLMX) and economic leader-member exchange (ELMX).
Design/methodology/approach
Data were obtained from 227 employee-leader dyads from four Norwegian organizations. Hierarchical moderated regression was used to test the hypotheses.
Findings
Even though the authors observed a positive relationship between employees’ knowledge donating and managers’ knowledge collecting, the moderation analysis revealed a positive relationship only for high levels of SLMX relationships.
Research limitations/implications
The data were cross-sectional, thus prohibiting causal inferences.
Practical implications
SLMX relationships may be particularly important for the facilitation of knowledge exchange. Managers may draw on this finding to develop their relationships with employees by means of relationship-oriented behaviors.
Originality/value
Given the importance of knowledge-sharing processes, a better understanding of the conditions under which knowledge donating related to knowledge collecting is particularly important. The present study advances knowledge on SLMX and ELMX relationships by demonstrating how SLMX moderates the association between knowledge donating and knowledge collecting.
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Carolyn J. Cordery and David Hay
New public management (NPM) has transformed the public sector auditing context, although in quite different ways. Further, investigations into NPM’s impact on public sector…
Abstract
Purpose
New public management (NPM) has transformed the public sector auditing context, although in quite different ways. Further, investigations into NPM’s impact on public sector auditors and audit institutions have been largely unconnected, with the exception of the critical examination of performance audits. We investigate the question of how public sector auditors’ roles and activities have changed as a result of NPM and later reforms.
Design/methodology/approach
We examine and synthesise public sector audit research examining reforms since the year 2000. The research presented considers changes to external and internal public sector audits as well as the development of public sector audit institutions – known as supreme audit institutions (SAIs).
Findings
Considerable changes have occurred. Many were influenced by NPM, but others have evolved from the eco-system of accounting, auditing and public sector management. External auditors have responded to an increase in demand for accountability. Additional management and governance techniques have been introduced from the private sector, such as internal auditing and audit committees. NPM has also led to conflicting trends, particularly when governments introduced competition to public sector auditing by contracting out but then chose to centralise to improve accountability. There is also greater international influence now through bodies like the International Organisation of Supreme Audit Institutions (INTOSAI) and similar regional bodies.
Originality/value
NPM reforms and the eco-system have impacted public sector auditing. Sustainability reporting is emerging as an area requiring more auditing attention; auditors also need to continue to develop better ways to communicate with citizens. Further, research into auditing in non-Western nations and emerging technologies is also required, especially where it provides learnings around more valuable audit practices. Empirical evidence is required of the strengths and weaknesses of SAIs’ structural variety.
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Bronwyn Howell and Carolyn Cordery
Policy reforms to primary health care delivery in New Zealand required government-funded firms overseeing care delivery to be constituted as nonprofit entities with governance…
Abstract
Policy reforms to primary health care delivery in New Zealand required government-funded firms overseeing care delivery to be constituted as nonprofit entities with governance shared between consumers and producers. This paper examines the consumer and producer interests in these firmsʼ allocation of ownership and control utilising theories of competition. Consistent with pre-reform patterns of ownership and control, provider interests appear to have exerted effective control over these entitiesʼ formation and governance in all but a few cases where community (consumer) control pre-existed. Their ability to do so is implied from the absence of a defined ownership stake and the changes to incentives facing the different stakeholding groups. It appears that the pre-existing patterns will prevail and further intervention will be required if policy-makers are to achieve their underlying aims.
Carolyn Cordery and Dalice Sim
The purpose of this paper is to analyse nonprofit regulation through comparing and contrasting mutual-benefit and public-benefit entities. It ascertains how these entities differ…
Abstract
Purpose
The purpose of this paper is to analyse nonprofit regulation through comparing and contrasting mutual-benefit and public-benefit entities. It ascertains how these entities differ in size, publicness, tax benefits and whether these differences might suggest regulatory costs should be differentiated.
Design/methodology/approach
This mixed-methods study utilises financial data, submissions and interviews.
Findings
There are stark differences in these two types of regulated nonprofit entities. Members should be the primary monitoring agency/ies for mutual-benefit entities, but financial reports should be understandable to these members. Nevertheless, the availability of tax concessions, combined with the benefits of limited liability, suggest mutual-benefit entities should be regulated and monitored by government in a way sympathetic to their size.
Research limitations/implications
As with most research, a limitation is this study’s focus on a single jurisdiction.
Practical implications
The differences in these entities’ characteristics are important for designing regulation.
Social implications
Better regulation is likely to require a standard set of financial reporting standards. Government has the right to demand disclosures due to benefits mutual-benefit entities enjoy.
Originality/value
In comparison to studies utilising only public-benefit data, this study uses unique data sets to compare public-benefit and mutual-benefit entities and presents nonprofit sector participant’s perceptions of these differences in context. This enables analysis of how better regulation could be achieved.
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Giuseppe Grossi, Ileana Steccolini, Pawan Adhikari, Judy Brown, Mark Christensen, Carolyn Cordery, Laurence Ferry, Philippe Lassou, Bruce McDonald III, Ringa Raudla, Mariafrancesca Sicilia and Eija Vinnari
The purpose of this polyphonic paper is to report on interdisciplinary discussions on the state-of-the-art and future of public sector accounting research (PSAR). The authors hope…
Abstract
Purpose
The purpose of this polyphonic paper is to report on interdisciplinary discussions on the state-of-the-art and future of public sector accounting research (PSAR). The authors hope to enliven the debates of the past and future developments in terms of context, themes, theories, methods and impacts in the field of PSAR by the exchanges they include here.
Design/methodology/approach
This polyphonic paper adopts an interdisciplinary approach. It brings into conversation ideas, views and approaches of several scholars on the actual and future developments of PSAR in various contexts, and explores potential implications.
Findings
This paper has brought together scholars from a plurality of disciplines, research methods and geographical areas, showing at the same time several points of convergence on important future themes (such as accounting as a mean for public, accounting, hybridity and value pluralism) and enabling conditions (accounting capabilities, profession and digitalisation) for PSA scholarship and practice, and the richness of looking at them from a plurality of perspectives.
Research limitations/implications
Exploring these past and future developments opens up the potential for interesting theoretical insights. A much greater theoretical and practical reconsideration of PSAR will be fostered by the exchanges included here.
Originality/value
In setting out a future research agenda, this paper fosters theoretical and methodological pluralism in the interdisciplinary research community interested in PSAR in various contexts. The discussion perspectives presented in this paper constitute not only a basis for further research in this relevant accounting area on the role, status and developments of PSAR but also creative potential for practitioners to be more reflective on their practices and also intended and united outcomes of such practices.
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Carolyn J. Cordery, David Hay and Sione Taufa
The purpose of this paper is to report a study of public accountability within the political and economic structures that characterise Pacific nations. The authors examine audit…
Abstract
Purpose
The purpose of this paper is to report a study of public accountability within the political and economic structures that characterise Pacific nations. The authors examine audit quality with respect to Pacific Island nations’ governmental reporting to investigate ways to improve accountability in a region that is economically and environmentally challenged.
Design/methodology/approach
The authors examine whether audit quality in Pacific Island nations is associated with the practical arrangements of Supreme Audit Institutions (SAIs), taking into account external factors. The “practical arrangements” include the independence of a SAI (regarding its staffing and funding) and also the requirement for it to report to the Executive. The financial setting in each jurisdiction has been seen to impact the quality of financial reporting and auditing. The authors examine mediating factors such as income, political stability and education that may also impact audit quality. This study uses publicly available databases as well as jurisdictional annual reports and the associated audit opinions and management letters (where available). Jurisdictional reports on public financial management were also analysed.
Findings
The authors find that public sector audit quality is low in many Pacific countries, concluding that public accountability is impaired. While the authors recommend changes to the practical arrangements that can improve audit quality, the mediating factors also impact audit quality. They argue that a renewed focus on financial capability could enhance public accountability in these nations, but there are limiting factors that are difficult to overcome.
Practical implications
There are problems in providing accountability for public sector activities in Pacific nations. The authors suggest that improvements to the appointment and funding of SAIs to enhance their independence will help to reduce these issues.
Originality/value
The authors present a framework for analysing SAIs’ practical arrangements and audit quality that includes variables that may mediate the effects of these practical arrangements. They apply the model to 20 Pacific jurisdictions, showing that the practical arrangements of a SAI directly impact audit quality. Nevertheless, there are instances where audit quality is poor despite good practical arrangements, implying that mediating factors also play a substantial role in determining audit quality of a SAI.