VALUE FOR MONEY AUDIT IN CANADIAN AND QUÉBEC GOVERNMENTS :
A SOCIAL INFLUENCE PROCESS

Danielle Morin, Ph.D., MBA, CA
Professeure adjointe
École des Hautes Études Commerciales
3000, Chemin de la Côte Ste-Catherine
Montréal, Qué. (Canada)
H3T 2A7
Tél. :(514) 340-6787
Fax :(514) 340-5633
Email : Danielle.Morin@hec.ca

Abstract

Value for money (VFM) audit formally appeared in the Canadian public sector control environment in 1977, when the Auditor General of Canada was granted the requisite powers to put in place a VFM audit function.  Over the years, the VFM audit practice has received very little attention from researchers, despite the existence of aspects worthy of analysis. To partly fill in the gaps in VFM audit research, we have conducted an exploratory study of the relation that auditors maintain with auditees as part of VFM audits.  It is this influence process that obtains between auditors and auditees, along with the impact of this influence attempt on management of audited organizations, that has particularly attracted our attention.  We are also interested in the role that auditors assume when they undertake VFM audits. Lastly, we investigate the impact that adopting either role has on auditors-auditees relations.  To effectively conduct this research, we performed a multiple case study that includes six VFM audits carried out by the Auditors General of Canada and of Quebec in 1995 and 1996.

Hereafter are some conclusions drawn from our research :

We have observed two distinct auditor profiles among VFM audit practitioners.  First, there are controllers, who view the Auditor General (AG)’s role as solely to inform parliamentarians. In contrast, catalysts of change and improvement perceive the AG’s role as not only to inform parliamentarians but also to encourage change and improvement in public administration. It is also quite evident that the catalysts of improvement will not necessarily have more of an impact on the management of audited organizations than do controllers.

We also evince that VFM audit is an influence process to which auditees are constantly subjected, for a far period that far exceeds that in which auditors and auditees are in direct contact.  In particular, VFM audit exerts a marked preventive effect on auditees.

The negative consequences of VFM audits on auditees, specifically on the personal level, are generally rather marginal.  In fact, VFM audits occasionally have positive consequences on either on the career or the everyday work of auditees.

Regarding the impact of the VFM audit on the audited organization, we have found that it is largely attributable to the existence of environmental conditions that alternately reinforce and neutralize the auditor’s influence attempt.  In so far as the auditors can anticipate or control the environmental conditions, they will be more likely to have a genuine impact on management of the audited organization