Research Outputs (Auditing)
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Item Internal audit’s evolving performance role: lessons from the South African public sector(Emerald, 2022) Moodley, Asogan; Ackers, Barry; Odendaal, ElzaPurpose – The formal adoption of internal auditing within the South African public sector was made compulsory by the Public Finance Management Act, No. 1 of 1999. Despite internal auditing’s primary role of adding value and assisting organisations to accomplish pre-defined strategic objectives, the increasing frequency of service delivery protests in South Africa, suggests that mandatory internal auditing may not have contributed to improving public sector performance and enhancing service delivery, as envisaged. This paper aims to identify the factors preventing internal audits from effectively contributing to improved public sector performance and service delivery. Design/methodology/approach – The study adopted a sequential mixed-methods research approach. Firstly, a survey instrument was used to collect empirical data from survey respondents at South African national government departments. Secondly, semi-structured interviews and focus group discussions were held with a purposively selected sample of participants to explore the observations from the first phase. The observations from the first two phases were validated through an analysis of pertinent documents and records. Findings – Despite all departments adopting internal auditing, management’s expectations of internal auditing and the services provided by the internal audit function diverged. The results suggest that the emergence of a compliance approach to organisational governance together with poor performance management skills has impaired internal auditing’s ability to effectively contribute to strategic and performancemanagement. Research limitations/implications – Despite its South African orientation, as internal auditing is a global association and given that service delivery protests continue to occur in several countries around the world, increases the study’s international relevance. Moreover, the mandate of internal auditing requires it to add value to an organisation irrespective of its geographical location. Originality/value – The study contributes to the existing body of knowledge on internal auditing, particularly its adoption and implementation in the South African public sector. In addition to identifying the factors inhibiting effective internal auditing, the study advances a suggested framework for the future of internal auditing.Item Theorising hybridity in state‑owned enterprises (SOEs)(Springer, 2023) Adebayo, Adeyemi; Ackers, BarryIn the context of governing state-owned enterprises (SOEs), we respond to calls for further research into public entrepreneurship and for theorising hybridity in SOEs, by navigating through the diverse and fragmented literature on public entrepreneurship. Synthesising this literature will improve our understanding of this complex organisation form and identify key areas of tension, enabling the development and deployment of more appropriate governance models for SOEs. A modified five-stage systematic literature review process is used to ensure that this study sufficiently encapsulate the significant topics, themes and debates in SOEs, relating to relevant early and contemporary studies. We identify areas that introduce significant tension into this organisation field, noting that corporate governance within SOEs constitutes a laboratory for governance issues. Linking public entrepreneurship with public enterprises, we discuss the restructuring of SOEs as well as hybridity in SOEs. Taking into account the practices and characteristics of SOEs, we argue that the missing link in theorising hybridity in SOEs is theorising hybridity in terms of objective/activity; thus bridging this gap. In concluding, we note that although this paper has discussed some of the identified gaps at length, it is a precursor for future research convergence, thereby pointing to areas for future research.Item Adoption of the combined assurance model by South African state-owned enterprises (SOEs)(2023) Adebayo, Adeyemi; Ackers, BarryIn addition to integrated reporting, which was arguably first introduced by the third King Report on Governance for South Africa (King III), King III also formally introduced the combined assurance model as a further governance innovation, aimed at enhancing the quality of organisational reporting. Although the combined assurance model is primarily an internal enterprise risk management innovation, designed to incorporate, integrate and optimise all assurance services and functions, it simultaneously enhances the credibility of organisational reporting. Taken as a whole, the combined assurance model enables an effective control environment, supports the integrity of information used for internal decision-making by management, the governing body and its committees; while supporting the integrity of the organisation’s external reports. Organisations adopting King IV, including state-owned enterprises (SOEs), are expected to explain how the provisions of the combined assurance model have been implemented. Explaining conformance, introduces an element of innovation into organisational reporting as envisaged by King IV, by providing stakeholders with assurance about the veracity of the disclosures contained in the internal and external reports of organisations. This exploratory paper analyses the extent to which South African SOEs have conformed to seven key combined assurance indicators. The disclosures contained in the publicly available annual/integrated reports of South African SOEs, listed in Schedule 2 of the Public Finance Management Act (PFMA), were thematically analysed to fulfil the objective of the study. We found that although the combined assurance related disclosures suggest high levels of adoption by some SOEs, the majority have not provided sufficient information to explain how they have applied combined assurance, if at all. Although their reports appear to provide internal management with some level of assurance about the extent to which risks have been managed, these reports may not necessarily provide external users with confidence that all material risks have been effectively mitigated, within the organisation’s risk appetite. This paper discuses implications for policy and practice and concludes by providing avenues for further research.Item Public Trust in the Auditors’ Work and the Prevailing Macroeconomic Conditions(2023) Dachevski, DarkoThis paper aims to explore whether the audit profession is impacted by global economic growth, how, and to what extent. In that manner, the study paper explores the interrelationship between the public trust in the auditors’ work and the prevailing macroeconomic conditions. For the applied research methodology, the proportion of audit company revenue, for the period from 2005 through 2022, derived from audit services and non-audit services, is used as a proxy to measure ‘the public trust in the auditors’ work’ and ‘the audit expectation gap’. These resultants are multiplied to calculate the ‘public interest’, which is juxtaposed against the global gross domestic product growth for the same period, to support the conceptual assertion that the public interest follows the current trends in the global economy. The study finds that public interest is directly related to the public trust in the auditors’ work. In this view, enhanced demand for audit services implies an increased public trust in the auditors’ work. The higher the demand for audit services, the bigger the public trust in the auditors’ work. The function of the audit expectation gap implies the general public to obtain a bigger scope of data and information regarding the operational activity of the auditees. The audit profession is connected with global economic growth through the public interest. This is because public interest follows the current trends in the global economy. The higher economic growth is accompanied by bigger public interest. In this regard, bigger public interest implies a bigger demand for audit services which in turn increases the public trust in the auditors’ work. This paper which uses the public interest as an indicator for global economic growth, contributes to understanding the relationship between the audit profession and prevailing macroeconomic conditions.Item The impact of rhino poaching on the accountability disclosures of a state-funded conservation organisation(Responsibility and Sustainability, 2024) Ackers, BarryThe unprecedented growth in the illegal wildlife trade has created a serious challenge for conservation in Africa. Governments around the world often create entities to protect species and preserve biodiversity in their respective countries. Despite numerous interventions to conserve the world’s threatened rhino populations and reduce incidents of rhino poaching, poaching of the world’s rhino populations continue, especially in South Africa. Descriptive and inferential statistics are used to analyze and compare rhinorelated disclosures with rhino poaching trends, to identify possible correlations between incidents of rhino poaching and rhino-related, and to establish differences between the periods between 2006 to 2015 (covered in Ackers, 2019) and the subsequent period from 2016 to 2021. Unlike the period from 2006 to 2015 where several rhino-related keywords were strongly correlated with rhino poaching incidents, no correlations were detected from 2016 to 2021. Although incidents of rhino poaching decreased, SANParks appear to have strategically increased its anti-poaching advocacy by retaining high levels of disclosures about rhino-related issues, demonstrating how it has discharged its biodiversity-related mandate. Using the same mixedmethods research approach and similar data, this paper extends the Ackers (2019) study, which examined how South African National Parks (SANParks), by including the disclosures from 2016 to 2021.