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Performance auditing in local government: an exploratory study of perceived efficiency of municipal value for money auditing in Finland and Norway

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  • Åge Johnsen
  • Pentti Meklin
  • Lasse Oulasvirta
  • Jarmo Vakkuri

Abstract

Performance auditing, or value for money (VFM) auditing, has been a long-standing component of accountability in public administration. During the 1980s and 1990s performance auditing has allegedly been increasingly adopted in the new public management. While there has been much research on public management and performance auditing in central government, local government has been relatively neglected in the literature. Municipalities and counties in local government have an important role in public sector service production in most European countries, and especially in the Nordic countries. It is therefore surprising that performance auditing in this context has received so little scholarly attention. This study is aimed at filling some of this gap. The purpose of this comparative study is, therefore, to explore how performance auditing practices, including performance measurement, are used to assess and verify value for money in local government and to enhance the accountability of municipalities and counties. This study analyses how informants from both auditors and auditees in Finland and Norway perceived the efficiency of conducting performance audits in local government. Despite some problems related to the quality of the performance audit reports, the informants perceived performance audit to function as a useful, rational public management tool.

Suggested Citation

  • Åge Johnsen & Pentti Meklin & Lasse Oulasvirta & Jarmo Vakkuri, 2001. "Performance auditing in local government: an exploratory study of perceived efficiency of municipal value for money auditing in Finland and Norway," European Accounting Review, Taylor & Francis Journals, vol. 10(3), pages 583-599.
    • Handle: RePEc:taf:euract:v:10:y:2001:i:3:p:583-599
    DOI: 10.1080/09638180126803
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    References listed on IDEAS

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    1. R J Sørensen, 1997. "The Legitimacy of Norwegian Local Government: The Impact of Central Government Controls," Environment and Planning C, , vol. 15(1), pages 37-51, March.
    2. Pollitt, Christopher & Girre, Xavier & Lonsdale, Jeremy & Mul, Robert & Summa, Hilkka & Waerness, Marit, 1999. "Performance or Compliance?: Performance Audit and Public Management in Five Countries," OUP Catalogue, Oxford University Press, number 9780198296003.
    3. William G. Ouchi, 1979. "A Conceptual Framework for the Design of Organizational Control Mechanisms," Management Science, INFORMS, vol. 25(9), pages 833-848, September.
    4. I. Lapsley & C. K. M. Pong, 2000. "Modernization versus problematization: value-for-money audit in public services," European Accounting Review, Taylor & Francis Journals, vol. 9(4), pages 541-567.
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    Cited by:

    1. Danielle Morin, 2008. "Auditors general's universe revisited: An exploratory study of the influence they exert on public administration through their value for money audits," Managerial Auditing Journal, Emerald Group Publishing, vol. 23(7), pages 697-720, July.
    2. Salem Amara, 2015. "Improving Performance Auditing Practice in the Libyan Public Sector," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 1(4), pages 311-324, April.
    3. Mu’azu Saidu Badara, 2013. "Impact of the Effective Internal Control System on the Internal Audit Effectiveness at Local Government Level," Journal of Social and Development Sciences, AMH International, vol. 4(1), pages 16-23.
    4. Jane Broadbent & James Guthrie, 2008. "Public sector to public services: 20 years of “contextual” accounting research," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 21(2), pages 129-169, February.
    5. David Carassus & Christophe Favoreu & Marcel Guenoun & Olivier Terrien, 2015. "Les évolutions en matière de pilotage par la performance publique locale au niveau européen : des logiques à la fois descendantes et ascendantes à harmoniser," Post-Print hal-02188115, HAL.
    6. Kristin Reichborn-Kjennerud, 2015. "Resistance to Control—Norwegian Ministries’ and Agencies’ Reactions to Performance Audit," Public Organization Review, Springer, vol. 15(1), pages 17-32, March.
    7. Mu’azu Saidu Badara, 2012. "The Relationship between Risk Management and Internal Audit Effectiveness at Local Government Level," Journal of Social and Development Sciences, AMH International, vol. 3(12), pages 389-396.

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