Evidence About the Value of Public Sector Audit to Stakeholders

We examine evidence about the value of public sector auditing to stakeholders in New Zealand. We apply models of auditing from previous research in mainstream auditing literature to identify gaps in the existing understanding of public sector audit. We obtained evidence by conducting interviews and focus groups with experts employed by the Office of the Auditor-General. We examined documents including audit reports, reports to Parliament, management letters and other documents. We observed Parliamentary Select Committees, examined news media reports about public sector auditing and reviewed social media. Of the explanations that we derived from the existing literature, there is evidence about auditing's function in agency and management control; there is limited evidence about signaling and insurance; mixed evidence about governance; and no evidence about the confirmation hypothesis, although it is potentially valuable. We conclude that public audit is valuable to stakeholders in many ways. We also make recommendations about potential changes, and we suggest concerns about certain issues