Are Latin American performance audits leading to changes?

• Published date: 01 November 2019
• Author: Lourdes Torres,Blanca Castillejos‐Suastegui,Ana Yetano
• DOI: http://doi.org/10.1111/ijau.12171
• Date: 01 November 2019

ORIGINAL ARTICLE

Are Latin American performance audits leading to changes?

Ana Yetano

1

|Lourdes Torres

1

|Blanca Castillejos‐Suastegui

2

1

University of Zaragoza, Zaragoza, Spain

2

Universidad Autónoma de Chiapas, Tuxtla

Gutiérrez, Mexico

Correspondence

Ana Yetano, Department of Accounting and

Finance, Faculty of Economics and Business

Administration, University of Zaragoza, Gran

Vía, 2, 50005 Zaragoza, Spain.

Email: ayetano@unizar.es

Funding information

Gobierno de Aragón, Grant/Award Number:

S56‐17R/S05; Ministerio de Ciencia e

Innovación, Grant/Award Number: ECO2015‐

66240P

The purpose of this paper is to analyze the perceptions of the public entities audited

in Latin America (the auditees) about the effectiveness of the performance audits car-

ried out on their institutions by their supreme audit institutions (SAIs; the auditors) to

determine to what extent these audits are promoting changes in these public entities.

After revising the webs of the SAIs of all Latin American countries, a sample of the

entities evaluated with performance audits was selected and a questionnaire (focused

on the audit process, the actions taken afterwards, and the follow‐up processes) was

sent to them. The results show, as in other Organisation for Economic Co‐operation

and Development settings, different degrees of real implementation of performance

audits in this geographical area. The audited entities that perceive performance audits

useful and trust in the SAIs' activities are also those that implement more recommen-

dations and sooner.

KEYWORDS

effectiveness, Latin America, perceptions of audited entities, performance audits,

recommendations

1|INTRODUCTION

Developing countries are under pressure to adopt administrative solu-

tions that the international community considers best practice

(Andrews, 2012). These reforms include decentralization, marketiza-

tion, and the implementation of anticorruption programs, which all

tend to increase the demand for performance information, either

because the organization is held accountable for its performance or

because it has to improve its performance (Tillema, Mimba, & van

Helden, 2010). For developing countries, an obstacle to the implemen-

tation of performance‐related reforms is the absence of sustainable

human resources management systems (Mei & Pearson, 2017). Fur-

thermore, the traditional context of the public sector in these coun-

tries is characterized by a low institutional capacity and high levels of

informality and corruption (Tillema et al., 2010). Largely following the

Organisation for Economic Co‐operation and Developmen (OECD)

public‐sector initiatives, most Latin American countries have incorpo-

rated the concept of performance into public administrations, with

some practical applications. However, in the majority of Latin Ameri-

can countries, performance‐related initiatives are still pending issues

in practice: management by objectives, resource allocation, and

performance indicators need to be clearly identified in the public

administrations of this geographical area (Manning & Shepherd,

2009). This situation may create a barrier towards the real implemen-

tation of performance audits, as has been demonstrated in other con-

texts with more tradition in the measurement and control of

performance in the public sector (Torres, Yetano, & Pina, 2019).

Performance audits have become widespread in the public sector,

especially in Anglo‐Saxon, Nordic, and Germanic countries, but they

are also becoming increasingly frequent in Latin America. With differ-

ent approaches, these audits are oriented to measuring the perfor-

mance of public‐sector entities where financial measures do not

sufficiently reflect their nonprofit activity. Performance audits do play

an important role in helping to balance the advantages and risks of

management practices (van der Knaap, 2011). The effectiveness of

performance audits in improving the management of public institu-

tions, services, or programs not only is difficult to measure (Lonsdale,

2000) but is also a contested issue. Pollitt et al. (1999) highlighted

some approaches for measuring the effects of performance audits,

such as their impact on parliaments, the media, cost savings, public

debate, and the audited institution. Few papers in the existing litera-

ture focus on the analysis of the effectiveness of performance audits

Received: 6 November 2018 Revised: 11 July 2019 Accepted: 15 July 2019

DOI: 10.1111/ijau.12171

Int J Audit.

wileyonlinelibrary.com/journal/ijau

© 2019 John Wiley & Sons Ltd

2019; :444–456.

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