The Influence of Factors on the Demand for Performance Auditing in the Public Sector

Dang Anh Tuan, Nguyen Ngoc Khanh Dung


Performance audits (PA) are becoming essential in supreme audit institutions (SAIs). This study aims to explain why developing countries need to expand the function of PA and to explore and measure the impact of each factor on the need to develop PA in Vietnam. The research combines qualitative (group discussion) and quantitative methods by surveying 157 state auditors of the State Audit of Vietnam (SAV). Data is processed through SmartPLS to verify the measurement and linear structure models. The results of the statistical analysis also show that all three factors have an impact on the development of PA, including (i) the degree of public governance reform, (ii) the accountability of SAV, and (iii) occupational influence. Besides, the model test results show that, from the perspective of SAV, the need to improve performance is higher than accountability. Public governance reform factors, external support, and SAI accountability contribute to enhancing the value of PA. The findings of this study complement the audit theory on three fronts: (i) PA will become more important when pursuing the goal of increasing accountability rather than improving performance; (ii) PA continues to evolve to adapt to social changes; and (iii) additional empirical evidence demonstrating that countries with low levels of transparency and accountability and inconsistent legal systems have higher audit “demand” but low supply of PA. This study proposes a PA development model to: (i) forecast the ability and level of the development audit of each SAI; and (ii) contribute to enhancing the value of PA using the PA topic selection tool. In addition, the developed scale is tested to ensure its reliability and validity. So this scale can be used to survey the needs, feasibility, and expected value that each audit subject brings before and after implementation.


Doi: 10.28991/ESJ-2024-08-01-07

Full Text: PDF


Vietnam; Auditing; Accountability; Performance Auditing; New Public Management.


Parker, L. D., Jacobs, K., & Schmitz, J. (2019). New public management and the rise of public sector performance audit: Evidence from the Australian case. Accounting, Auditing & Accountability Journal, 32(1), 280–306. doi:10.1108/AAAJ-06-2017-2964.

Mattei, G., Grossi, G., & Guthrie A.M, J. (2021). Exploring past, present and future trends in public sector auditing research: a literature review. Meditari Accountancy Research, 29(7), 94–134. doi:10.1108/MEDAR-09-2020-1008.

Pollitt, C., Girre, X., Lonsdale, J., Mul, R., Summa, H., & Waerness, M. (1999). Performance or Compliance? Oxford University Press, Oxford, United Kingdom. doi:10.1093/acprof:oso/9780198296003.001.0001.

Pollitt, C. (2003). Performance audit in Western Europe: Trends and choices. Critical Perspectives on Accounting, 14(1–2), 157–170, Oxford University Press, Oxford, United Kingdom. doi:10.1006/cpac.2002.0521.

Cordery, C. J., & Hay, D. C. (2020). Public Sector Audit. Routledge, London, United Kingdom. doi:10.4324/9780429201639.

Guthrie, J. (1989). The Contested Nature of Performance Auditing in Australia. International Journal of Public Sector Management, 2(3). doi:10.1108/09513558910139146.

Guthrie, J. E., & Parker, L. D. (1999). A quarter of a century of performance auditing in the Australian federal public sector: A malleable masque. Abacus, 35(3), 302–332. doi:10.1111/1467-6281.00048.

English, L., & Guthrie, J. (2000). Mandate, independence and funding: Resolution of a protracted struggle between parliament and the executive over the powers of the Australian auditor-general. Australian Journal of Public Administration, 59(1), 98–114. doi:10.1111/1467-8500.00143.

Flesher, D. L., & Zarzeski, M. T. (2002). The roots of operational (value-for-money) auditing in English-speaking nations. Accounting and Business Research, 32(2), 93–104. doi:10.1080/00014788.2002.9728959.

Radcliffe, V. S. (1998). Efficiency audit: An assembly of rationalities and programmes. Accounting, Organizations and Society, 23(4), 377–410. doi:10.1016/S0361-3682(97)00020-2.

Gendron, Y., Cooper, D. J., & Townley, B. (2001). In the name of accountability -State auditing, independence and new public management. Accounting, Auditing & Accountability Journal, 14(3), 278–310. doi:10.1108/EUM0000000005518.

Jacobs, K. (1998). Value for money auditing in New Zealand: Competing for control in the public sector. The British Accounting Review, 30(4), 343–360. doi:10.1006/bare.1998.0077.

Pallot, J. (2003). A wider accountability? The audit office and New Zealand’s bureaucratic revolution. Critical Perspectives on Accounting, 14(1–2), 133–155. doi:10.1006/cpac.2001.0518.

Lapsley, I., & Pong, C. K. M. (2000). Modernization versus problematization: value-for-money audit in public services. European Accounting Review, 9(4), 541–567. doi:10.1080/713764876.

Yamamoto, K., & Watanabe, M. (1989). Performance Auditing in the Central Government of Japan. Financial Accountability & Management, 5(4), 199–217. doi:10.1111/j.1468-0408.1989.tb00319.x.

Fan, H. (2012). Government performance auditing demand research based on the neo-institutional economics. China Finance Review International, 2(2), 100–120. doi:10.1108/20441391211215806.

Ferdousi, N. (2012). Challenges of performance audit in the implementation phase: Bangladesh perspective. Master Thesis, North South University, Dhaka, Bangladesh.

Daud, Z. M. (2007). The study of the audit expectations gap in the public sector of Malaysia. Ph.D. Thesis, University of Stirling, Stirling, United Kingdom.

Khalili, A., Tehrani, R., Karami, G., & Jandaghi, G. (2012). Prioritizing the factors influencing the development of operational audit. International Journal of Academic Research in Business and Social Sciences, 2(1), 659-674.

Andrianto, N., Sudjali, I. P., & Karunia, R. L. (2021). Assessing the development of performance audit methodology in the supreme audit institution: The case of Indonesia. Jurnal Tata Kelola Dan Akuntabilitas Keuangan Negara, 19–37. doi:10.28986/jtaken.v7i1.554.

Lonsdale, J., Ling, T., & Wilkins, P. (2011). Conclusions: Performance Audit – An Effective Force in Difficult Times? Performance Auditing. Edward Elgar Publishing, Cheltenham, United Kingdom. doi:10.4337/9780857931801.00023.

English, L., & Guthrie, J. (1991). Public Sector Auditing: a Case of Contested Accountability Regimes. Australian Journal of Public Administration, 50(3), 347–360. doi:10.1111/j.1467-8500.1991.tb02295.x.

Quam, L. (1998). The Audit Society: Rituals of Verification. BMJ, 316(7133), 787–787. doi:10.1136/bmj.316.7133.787a.

Justesen, L., & Skærbæk, P. (2010). Performance Auditing and the Narrating of a New Auditee Identity. Financial Accountability and Management, 26(3), 325–343. doi:10.1111/j.1468-0408.2010.00504.x.

Tremblay, M. S., & Malsch, B. (2015). A review of performance audit literature. International Research Society for Public Management Conference, Smith School of Business at Queen's University, Kingston, Canada.

Nath, N. D. (2011). Public Sector Performance Auditing and Accountability: A Fijian Case Study. Ph.D. Thesis, University of Waikato, Hamilton, New Zealand.

Trivedi, P. (2016). Auditing the Auditors: Evaluating the Methodology of Performance Audits. SSRN Electronic Journal. doi:10.2139/ssrn.2871102.

Ivana Krmić & Tomislav Saić (2018). Overview of methodologies used in local government auditing. Seminar “Local Government Finance: Future Challenges” and the 2nd Annual Meeting of EUROSAI TFMA members, 6 November, 2018, Belgrade, Serbia.

Van Vuuren, M. J. (2011). An audit program planning methodology and model specific to performance auditing. Ph.D. Thesis, University of the Witwatersrand, Johannesburg, South Africa.

Leeuw, F. L. (2011). On the Effects, Lack of Effects and Perverse Effects of Performance Audit. Performance Auditing. Edward Elgar Publishing, Cheltenham, United Kingdom. doi:10.4337/9780857931801.00018.

Furubo, J.-E. (2011). Performance Auditing: Audit or Misnomer? Performance Auditing. Edward Elgar Publishing, Cheltenham, United Kingdom. doi:10.4337/9780857931801.00007.

Sikka, P. (1989). Philosophy and principles of auditing: An introduction. The British Accounting Review, 21(2), 200–202. doi:10.1016/0890-8389(89)90203-5.

Kells, S., & Hodge, G. (2010). Redefining the Performance Auditing Space. Asia Pacific Journal of Public Administration, 32(1), 63–88. doi:10.1080/23276665.2010.10779367.

Lindeberg, T. (2007). the Ambiguous Identity of Auditing. Financial Accountability and Management, 23(3), 337–350. doi:10.1111/j.1468-0408.2007.00432.x.

Raudla, R., Taro, K., Agu, C., & Douglas, J. W. (2016). The Impact of Performance Audit on Public Sector Organizations: The Case of Estonia. Public Organization Review, 16(2), 217–233. doi:10.1007/s11115-015-0308-0.

Lonsdale, J., & Bechberger, E. (2011). Learning in an Accountability Setting. Performance Auditing. Edward Elgar Publishing, Cheltenham, United Kingdom. doi:10.4337/9780857931801.00020.

Shand, D., & Anand, P. (1996). Performance auditing in the public sector: approaches and issues in OECD member countries. Performance auditing and the modernisation of government, 57-102, Organisation for Economic Co-Operation and Development, Paris, France.

Power, M. (2003). Evaluating the audit explosion. Law & Policy, 25(3), 185–202. doi:10.1111/j.1467-9930.2003.00147.x.

Barzelay, M. (1997). Central audit institutions and performance auditing: A comparative analysis of organizational strategies in the OECD. Governance, 10(3), 235–260. doi:10.1111/0952-1895.411997041.

Yamamoto, K., & Kim, M. J. (2019). Stakeholders’ approach on government auditing in the supreme audit institutions of Japan and Korea. Financial Accountability & Management, 35(3), 217–232. doi:10.1111/faam.12187.

Shand, D. (2007). Performance auditing and performance budgeting. In Performance Budgeting: Linking Funding and Results. Palgrave Macmillan, London, United Kingdom, 88-109. doi:10.1057/9781137001528_6.

Pearson, D. (2014). Significant reforms in public sector audit - Staying relevant in times of change and challenge. Journal of Accounting and Organizational Change, 10(1), 150–161. doi:10.1108/JAOC-06-2013-0054.

Marijani, R., & Jarbandhan, D. V. (2022). Professionalizing Public Administration and the Impact of Performance Audit on Public Organizations in Tanzania. PanAfrican Journal of Governance and Development (PJGD), 3(2), 85-112. doi:10.46404/panjogov.v3i2.3941.

Funnell, W. (2015). Performance Auditing and Adjudicating Political Disputes. Financial Accountability and Management, 31(1), 92–111. doi:10.1111/faam.12046.

Nath, N., Othman, R., & Laswad, F. (2020). External performance audit in New Zealand public health: a legitimacy perspective. Qualitative Research in Accounting & Management, 17(2), 145–175. doi:10.1108/QRAM-11-2017-0110.

DiMaggio, P. J., & Powell, W. W. (1983). The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields. American Sociological Review, 48(2), 147. doi:10.2307/2095101.

Barton, A. (2009). The use and abuse of accounting in the public sector financial management reform program in Australia. Abacus, 45(2), 221–248. doi:10.1111/j.1467-6281.2009.00283.x.

Van Zyl, A., Ramkumar, V., & De Renzio, P. (2009). Responding to the Challenges of Supreme Audit Institutions: Can legislatures and civil society help?. U4 Issue, 2009(1).

Hazaea, S. A., Tabash, M. I., Abdul Rahman, A. A., Khatib, S. F. A., Zhu, J., & Chong, H. G. (2022). Impact of the COVID-19 Pandemic on Audit Quality: Lessons and Opportunities. Emerging Science Journal, 6, 71–86. doi:10.28991/esj-2022-sper-06.

Morin, D. (2003). Controllers or catalysts for change and improvement: would the real value for money auditors please stand up? Managerial Auditing Journal, 18(1), 19–30. doi:10.1108/02686900310454165.

HOOD, C. (1991). a Public Management for All Seasons? Public Administration, 69(1), 3–19. doi:10.1111/j.1467-9299.1991.tb00779.x.

Hatherly, D. J., & Parker, L. D. (1988). Performance Auditing Outcomes: a Comparative Study. Financial Accountability & Management, 4(1), 21–41. doi:10.1111/j.1468-0408.1988.tb00288.x.

Guthrie, J. (1992). Critical Issues in Public Sector Auditing. Managerial Auditing Journal, 7(4), 27–32. doi:10.1108/02686909210012842.

Morin, D. (2001). Influence of Value for Money Audit on Public Administrations: Looking Beyond Appearances. Financial Accountability & Management, 17(2), 99–117. doi:10.1111/1468-0408.00123.

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. doi:10.1016/0304-405X(76)90026-X.

Donaldson, L., & Davis, J. (1991). CEO Governance and Shareholder Returns. Australian Journal of Management, 103–107.

Freeman, R. E. (2010). Strategic management. Cambridge University Press, Cambridge, United Kingdom. doi:10.1017/CBO9781139192675.

Mulgan, R. (2001). Auditors-general: Cuckoos in the managerialist nest? Australian Journal of Public Administration, 60(2), 24–34. doi:10.1111/1467-8500.00206.

Guthrie, J. (1992). Changes in the Public Sector: A Review of Recent “Alternative” Accounting Research. Accounting, Auditing & Accountability Journal, 5(2), 3–31. doi:10.1108/09513579210011835.

Churchill, G. A. (1979). A Paradigm for Developing Better Measures of Marketing Constructs. Journal of Marketing Research, 16(1), 64–73. doi:10.1177/002224377901600110.

Hair, J., Hair Jr, J. F., Sarstedt, M., Ringle, C. M., & Gudergan, S. P. (2023). Advanced issues in partial least squares structural equation modeling. SAGE Publications, Thousand Oaks, United States.

Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135. doi:10.1007/s11747-014-0403-8.

Lowry, P. B., & Gaskin, J. (2014). Partial least squares (PLS) structural equation modeling (SEM) for building and testing behavioral causal theory: When to choose it and how to use it. IEEE Transactions on Professional Communication, 57(2), 123–146. doi:10.1109/TPC.2014.2312452.

Tenenhaus, M., Vinzi, V. E., Chatelin, Y. M., & Lauro, C. (2005). PLS path modeling. Computational Statistics & Data Analysis, 48(1), 159–205. doi:10.1016/j.csda.2004.03.005.

Dang, T. A., & Nguyen, D. K. N. (2021). Components Constituting the Audit Expectation Gap: The Vietnamese Case. The Journal of Asian Finance, Economics and Business, 8(1), 363–373. doi:10.13106/jafeb.2021.vol8.no1.363.

Full Text: PDF

DOI: 10.28991/ESJ-2024-08-01-07


  • There are currently no refbacks.

Copyright (c) 2024 Tuan Anh Dang, Dung Ngoc Khanh Nguyen