A framework to enhance audit committee effectiveness in Ghana’s public sector

Abstract

The purpose of this work was to construct a framework, proposing to enhance the effectiveness of Audit Committees (ACs) in Ghana’s public sector institutions (referred to as “covered entities” [CEs]). This was predicated on the perennial pervasiveness of financial management infractions and irregularities in Ghana’s public sector, as reported annually by the Auditor-General. The Agency theory and Institutional theory were the underpinning concepts applied in an initial literature review. The Interactive Qualitative Analysis method was utilised in conduct focus groups sessions and analyses of the information collected. Knowledge of the factors that influenced the effectiveness of ACs was obtained from AC members and key stakeholders of ACs in CEs. The knowledge acquired was further enhanced by enquiry into the factors identified by AC members and the stakeholders, through a further literature exploration and examination of international best practices. Contribution was also sought from available and willing key stakeholders, concerning the applicability as well as comprehensiveness of the proposed frameworks constructed, which lead to filtering of the final output (the frameworks). In summary, the findings identified include seventy-two subaffinities, grouped into twenty-five affinities, that influence AC effectiveness in CEs. These affinities were consolidated into five themes, that guided the subsequent stages of the study, that included further literature examination. The five themes were (1) Governance and policies; (2) Stakeholder engagement; (3) Status of the AC; (4) Quality management; and (5) AC financing/funding. The interpretation of the findings resulted in the development of two draft frameworks; one for ACs and another for managers of CEs. To achieve the primary objective and obtain validity, these two draft frameworks were subjected a survey questionnaire administered to purposefully selected respondents. The findings indicate that there are two main frameworks for enhancing the effectiveness of ACs in Ghana’s public sector: one for ACs and the other for management of CEs. The summary of the main recommendations was for ACs and management of CEs to adopt the tenets of these frameworks towards enhancing the effectiveness of ACs.