Drivers of audit quality in the Maltese public sector

Abstract

Purpose: The purpose of this study is to identify the main dimensions of audit quality directly attributable to the audit work performed by the National Audit Office (NAO) within the Maltese Public Sector. Furthermore, the study also aims to analyse the perceptions of the main users of the audit information issued by the NAO, in relation to the importance of the identified audit quality attributes. Moreover, the effectiveness of the quality control procedures implemented by the NAO to maintain and enhance these drivers of audit quality is also analysed. Design: In order to address the objectives of the study, a qualitative approach was adopted. The review and analysis of existing literature was used to identify the main drivers of audit quality which were subsequently used as a basis to design the interview schedules. A series of semistructured interviews were conducted with nineteen officials working in the Maltese Public Sector including NAO officials, members of the PAC and a number of Ministry representatives. Findings: This study shows that the main drivers of audit quality in the Maltese public sector are considered to be: independence; accountability; technical competence; the choice of audits; the sample selection process; internal and external communication; and the actual communication of audit findings. All of these dimensions are considered to play an invaluable role during the audit process. However, a gap is identified in the participants’ perception of the NAO’s ability to perform audits which are of the highest standard. In addition, this study confirms that the NAO implements a series of quality control procedures throughout each stage of the audit process in an effort to promote the concept of high audit quality. Conclusions: This study highlights the paramount importance of the NAO’s role in ensuring public transparency and accountability. Audit quality was confirmed to be a question of perception, where the level of quality of the work performed is highly dependent on the dimensions which were tackled during the course of this research. Moreover, despite the NAO’s efforts to instil an internal culture of high quality, this study concludes that there is still ample room for improvement in this regard. Value: This study aspires to raise awareness on the identified gap in perceptions regarding audit quality in general and the importance of the individual attributes which all play a crucial role in this process.