How has New Public Management influenced public sector audit?

What is it about?

This article begins with the concept that New Public Management (NPM) has transformed the public sector in general and therefore public sector auditing as well. We examine literature published since 2000 that investigates NPM’s impact on public sector auditors and audit institutions. However, these have been largely unconnected, except for the research into performance audits. We synthesise public sector audit research examining reforms in external and internal public sector audits and public sector audit institutions. We find that numerous changes have occurred. Many were influenced by NPM, but others have evolved from the 'eco-system' of accounting, auditing and public sector management.

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Why is it important?

It is important to realise that public sector auditing takes place within an eco-system of private and public sector financial management. Hence, NPM cannot be 'blamed' for all changes. We also call out the need for more research into auditing in non-Western nations and emerging technologies is also required, especially where it provides learnings around more valuable audit practices, as well as empirical evidence of the strengths and weaknesses of SAIs’ structural variety.

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