The impact of material irregularity provisions of the Public Audit Act on accountability, oversight and governance in the Northern Cape province of South Africa

Abstract

Background: A lot of research on audit-related services and accountability in the international and African contexts has been conducted. However, none of those empirical investigations have been done in the South African context, focussing specifically, on how the material irregularity (MI) of the recently amended Public Audit Act impacts accountability, governance and oversight.

Aim: This study aimed to explore the perceptions of middle and senior managers in the Northern Cape provincial administration on the impact of the implementation of the MI provisions of the amended Public Audit Act on accountability, oversight and governance. The focus of the investigation was the recommendation strand of MI.

Setting: Northern Cape provincial administration with regard to MI provisions of the Public Audit Act in relation to accountability, oversight and governance.

Method: The survey design and a stratified sample of 200 middle and senior managers were used. The response rate was 68.5%. Regression analysis was done.

Results: It was found that the implementation of MI provisions of the amended Public Audit Act positively impacts on accountability, governance and oversight. The MI serves as a deterrent to future wrongdoing in the provincial administration. This finding implies that MI processes have significant value creation and protection in the South African public finances through deterrence even though that cannot be quantified in monetary terms.

Conclusion: The study recommends that government should cooperate and encourage the implementation of the MI provisions to improve accountability, governance and oversight in the event when MI is detected or suspected during the audit process.