What has become of the audit explosion? Analyzing trends in oversight activities in the Canadian government
| Published date | 01 December 2022 |
| Author | Catherine Liston‐Heyes,Luc Juillet |
| Date | 01 December 2022 |
| DOI | http://doi.org/10.1111/padm.12793 |
ORIGINAL ARTICLE
What has become of the audit explosion?
Analyzing trends in oversight activities in the
Canadian government
Catherine Liston-Heyes
1,2
| Luc Juillet
1
1
Graduate School of Public and International
Affairs, University of Ottawa, Ottawa,
Ontario, Canada
2
Department of Management, University of
Sussex Business School, University of Sussex,
Falmer, East Sussex, UK
Correspondence
Catherine Liston-Heyes, Graduate School of
Public and International Affairs, University of
Ottawa, ON, Canada.
Email: clistonh@uottawa.ca,c.liston-heyes@
sussex.ac.uk
Funding information
We gratefully acknowledge funding received
from the Social Sciences and Humanities
Research Council of Canada (SSHRC)—grant
#435-2019-0102.
Abstract
Since the 1980s, many governments expanded their admin-
istrative oversight systems, such as auditing and evaluation,
in order to improve the efficiency, performance and
accountability of their administration. Yet few studies
empirically examine this “audit explosion.”Our study inves-
tigates its more recent manifestation. Using Canada as an
exploratory case, we first assess whether the level of these
oversight activities contracted or expanded in the last two
decades. We then analyze the contents of 3245 audit
reports published between 2000 and 2019 to track changes
in the focus of auditing. Results suggest that, while the
overall level of administrative oversight is much higher now
than in 2000, it grew only in the first decade of the millen-
nium and was confined to internal functions, namely depart-
mental audits and evaluations, as opposed to the country's
Supreme Audit Institution. Meanwhile, auditors' attention
to financial matters declined, while their focus on compli-
ance, performance, and risk increased.
Résumé
Depuis 1980, plusieurs gouvernements ont renforcé leurs
systèmes d'audit et d'évaluation afin d'améliorer l'efficience,
la performance et l'imputabilité de leur administration.
Toutefois, peu d'études examinent empiriquement cette
«explosion de la vérification ». Notre étude examine les
développements récents dans ce domaine. Utilisant le
Canada comme cas exploratoire, nous évaluons d'abord
l'évolution du nombre d'audits et d'évaluations au cours des
Received: 1 December 2020 Revised: 8 October 2021 Accepted: 13 October 2021
DOI: 10.1111/padm.12793
Public Admin. 2022;100:1073–1090. wileyonlinelibrary.com/journal/padm © 2021 John Wiley & Sons Ltd. 1073
deux dernières décennies. Nous analysons ensuite le con-
tenu de 3245 rapports d'audit pour comprendre comment
les préoccupations des vérificateurs ont évolué entre 2000
et 2019. Nos résultats suggèrent que, si le niveau global de
vérification et d'évaluation est beaucoup plus élevé
aujourd'hui qu'en 2000, cette augmentation fut limitée à la
première décennie du millénaire et aux évaluations et audits
ministériels par opposition à la vérification législative. Par
ailleurs, l'attention portée aux questions financières a
diminué, tandis qu'on observe un accent croissant mis sur la
conformité, la performance et le risque.
Reforms inspiredby the New Public Management(NPM) and demands for greater accountability have ledto a substan-
tial growth in administrative oversight activities in some countries. Described as an “audit explosion”(Power, 2003)
and a worrying growthin “regulation inside government”(Hoodet al., 1999), this trend can be consequentialfor public
administration. It can lead to more accountability and performance, but it can also have adverse consequences. For
example, in additionto concerns about oversight and compliance costs (Hood et al.,2000), it can promote risk aversion
and gaming by managers(Mendez and Bachtler, 2011). In otherwords, changes in the scale andscope of administrative
oversight activities reverberatethroughout bureaucracies (Bringselius, 2014;Johnsen,2019).
While it has been examined through case studies of institutional reforms and specific sectors (Ferry &
Ahrens, 2021; Ferry & Eckersley, 2015), the growth of oversight activity over time remains poorly investigated, espe-
cially outside the United Kingdom (Lodge & Hood, 2010). In light of this gap, we explore this phenomenon through
the analysis of two decades of audit and evaluation in the Canadian government. More specifically, we ask whether
there have been changes in the scale and scope of administrative oversight activity in the Canadian federal public
service between 2000 and 2019. As a country with a strong reputation and long history in public auditing, Canada
offers an interesting setting for such investigations (Good, 2014).
To answer our research question, we first focus on issues of scale by tracking the number of audit and evalua-
tion reports produced annually. We then turn to the scope and focus of public auditing, analyzing the content of
more than 3000 audit reports written over this period in order to assess whether there have been significant
changes in the preoccupations of auditors. To carry out this analysis, we assume that, since these reports are the pri-
mary product of Canadian public auditing, their content provides a reliable indication of auditors' preoccupations.
We use computerized text analysis and bespoke word lists to track the prevalence of language associated with
finance, compliance, performance, and risk in audit reports over time. Nonparametric correlation analyses, graphs,
and independent samples tests are used to identify trends and differences between reports.
Our findings paint a complex picture of the evolution of administrative oversight in Canada. In particular,
whiletherewasfourtofive timesasmuchauditingandevaluationdonein2019comparedto2000,whichsug-
gests a continuation of the audit explosion in the last two decades, the number of audit and evaluation reports
has also been declining since 2010. We also find that, over those two decades, growth in oversight has been
largely confined to audit and evaluation functions internal to departments, while the level of activity of the Office
of the Auditor General, Canada's Supreme Audit Institution (SAI), remained stable. Finally, with respect to the
shifting focus of auditing, we find that the discussion of financialmatters has declined, but that there is a growing
preoccupation with compliance, performance, and risk by internal auditors. Our study concludes with some
thoughts on the implications of our findings, which, while based on Canadian data, raise questionsof broader rele-
vance for public management.
1074 LISTON-HEYES AND JUILLET
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