Research project:
The auditor as evaluator. International evolutions in audit roles as a result of management reform (2008-2011)

Commissioner

POD Wetenschapsbeleid

Content of the research

This so-called AUDEVAL-project is a research project focused on the issue of performance audit inside the public sector. It is financed for three years by the Federal Agency Federal Scientific Policy. The project has two wings, respectively devoted to fundamental and applied research.

It is difficult to neglect the growing importance of audit inside the public sector. Confined in the technical budgetary debates until recently, the legislative auditors are now more and more participating in the democratic debate by publicly making judgments about the way by which public organizations are spending our taxes. Internal audit functions are also created inside government, where they provide on structural way information to their audit committee about the working of administrations. These evolutions carry with them a specific vocabulary, such as the concept of internal control for instance, as well as new challenges related to the coordination of this new body of players and activities, what is generally coined by the idea of single audit.

A relatively straightforward explanation for the emergence of these institutions is to say that they are a rational response given by the public authorities to the issue of the performance of public services. Yet this explanation is only partially satisfactorily because, if it is widely accepted that the performance of public organizations is a problem in OECD-countries, audit is only one among other possible responses to it. Moreover, if these trends are observable in all the OECD-countries, the relative share of the problem of government performance that is entrusted to auditors varies from country to country.
This is why we think that the theoretical framework established by Andrew Abbott in his book “The System of Professions” can improve our understanding of these phenomena. Abbott assumes that different professional groups fight for the right to conceptualize certain societal problems according to their own knowledge systems, to the exclusion of these of other groups. Long term as well as short terms environmental events, action and inaction of the groups implied in these contests, as well as the processes taking place inside the public authorities, would determine the outcome of these contests.
During this research that should lead to a PhD, we will confront this theory to all the cases where the division of labour between auditors and other players around the issue of public organizations’ performance has evolved, in order to assess if this theory can indeed explain the differentiated evolution of public auditing in time and place. Therefore, Abbott’s theory is translated into an equation using Boolean operators and a language of necessary and sufficient causes. This theoretical equation is then systematically confronted, through John Stuart Mill’s methods of agreement and difference, with the history of the evolution of public auditing in Canada and Belgium. If it appeared that this theory has indeed an explanatory value, its generalization to other countries or professional groups will be considered.

Besides a PhD research, the audeval-research project also has an applied component. The development of audit inside the public sector carries very concrete consequence with it: different public agencies are asked to install audit structures, different civil servants are entrusted with the mandate of producing performance audit reports, and different stakeholders see audit reports landing on their office.
Based on an analysis of professional and scientific literature, the applied component of Audeval research project aims to develop a handbook allowing managers, auditors and auditees to become initiated with performance audits.

On the one hand, the handbook gives an outline of an ideal-typical performance audit process, indicates different choices with which auditors are confronted, and refers to external sources for deepen information. On the other hand, besides purely operational issues, the handbook also focuses on the development of enduring organizational structures for audit inside a public sector context, and indicates the possible tensions existing between operational and organizational issues.
Compared with existing products, the added-value of this handbook lies in its lower degree of abstraction, a specialization in the public sector, the attention for organizational issues, as well as the injection of scientific methods and literature. The focus we lay on the initial stages of audit development provide for the necessary complementary between this product and existing professional training programmes.

Moreover, the research team tries to gather, alongside the project’s length, all the stakeholders concerned by the issue of public auditing in Federal Belgium, through informal seminaries and workshops. Next to the dissemination of research results, these forums also aim at the creation of a feeling of common responsibilities between the members of this nascent community.

Objectives

The research design of the Audeval project is based on the central hypothesis that the environment influences the audit system and the audit system, in turn, influences the performance audit process. The objective of this project is to test this hypotheses through comparative analyses en to understand how the different levels of analysis influence each other. Five countries will be compared over two periods in time. This method will make it possible to observe evolutions over time and international trends. The data will be gathered through literature study, document analysis, a visit to the countries and interviews with the officials concerned.

Methodology

Typologies of performance auditing are defined in the theoretical section of the study. These are based on different approaches, institutional characteristics and methods and techniques of value-for-money auditing. A causal model is developed to explain the changes in auditor roles. An international comparative multiple case study is performed in the empirical section of this study. This case study is based on an analysis of performance audit reports and semi-structured face-to-face interviews, conducted on site. A gap analysis is constructed on the differences between the Belgian and international situation and evolutions.

Expected results and products

The output of the research project is twofold. On the one hand, a performance audit manual will be drawn up. Cocnrete implications of strategic choices of auditors will be illustrated based on the experiences from abroad. On the other hand, a scientific book will be drawn up with the ambition to better understand the relations between audit systems and their environment.
During the first months of the project a theoretical and conceptual framework was formulated. The research questions were converted to a detailed checklist. The casestudies will be carried out in 2009 and 2010.

The findings of the analysis will be reported in a variety of media: research papers, articles in international journals, articles in national journals, a handbook on performance audit and through expert panels, workshops and an international seminar.

Research team

Coordination: Prof. dr. Geert Bouckaert
Scientific researchers: