An Investigation of the Relationships Between Time Invested in Government Internal Audit Projects and Audit Outcomes

Abstract

This study investigates the relationships between time invested in performing government internal audits and audit outcomes. The increasingly constrained public sector budgets, coupled with heightened “value for money” expectations call for audit effectiveness and expertise to identify waste, inefficiencies and fraud in budget items. Using benchmarking data from the Association of Local Government Auditors, the study examines the effects of audit hours on projects completed and recommendations issued and implemented. Results show time invested in audit projects is significantly related to the number of projects completed and annualized recommendations issued. Additionally, financial statement and fraud audit projects completed do significantly influence recommendations implemented.