The ‘front stage’ of substance auditing: A study of how substance auditing is presented in performance audit reports

• Published date: 01 May 2019
• Date: 01 May 2019
• DOI: http://doi.org/10.1111/faam.12190

Received: 2 September 2016 Revised: 6 February2019 Accepted: 14 February 2019

DOI: 10.1111/faam.12190

ORIGINAL ARTICLE

The ‘front stage’ of substance auditing: A study of

how substance auditing is presented in

performance audit reports

Fredrik Svärdsten

Stockholm Business School, Stockholm

University, Roslagsvägen 101, SE-106 91

Stockholm, Sweden.

Correspondence

FredrikSvärdsten, Stockholm Business School,

StockholmUniversity, Roslagsvägen 101, SE-106

91Stockholm, Sweden.

Email:fs@sbs.su.se

Abstract

Performance audit is a practice with a potentially high degree of

democraticand political relevance. Supreme Audit Institutions (SAIs)

have the authority to determine whether the undertakings in cen-

tral government ‘are working’; therefore, SAIs tend to be regarded

as important guardians of transparency and ‘good’ public sector per-

formance. Forthis purpose, audits of ‘substance’ are regarded as cru-

cial by both the research community and the INTOSAI. Still, the lit-

erature on performance audit concludes that substance audits are

rare, although they do exist. One explanation for this is that sub-

stance auditing can be a risky endeavour for the auditors, since the

lack of generic accounting standards for ‘good’ public sector per-

formance makes the performance audit reports vulnerable to crit-

icism. The aim of this paper is to contribute to our understanding

of substance auditing by detailing the ways in which such audits are

presented in performance audit reports. Thus, the paper focuses its

analysis on the ‘front stage’ of substance auditing and finds that the

auditors rarely choose to stand on the front stage alone. Instead,

theyregularly support their authority by relying on other authorities,

and when such authorities are lacking, the auditors are reluctant to

present judgements in terms of ‘good’ (or poor) performance. In such

cases,this paper suggests that the democratic relevance of the audits

can be questioned.

KEYWORDS

economy audit, effectiveness audit, efficiency audit, performance

audit, substance audit

1INTRODUCTION

A performance audit (PA) is a practice with a potentially high degree of political and democratic relevance. Though

similar to a commercial audit, a PA has some different features. Compared to a financial audit, for example, a PA is

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