Auditors’ Perceptions about Internal Controls in the Public Sector: A Case Study of Nkwanta South

Abstract

This research focuses on auditors’ perceptions about internal controls in the public sector, how it affects the work of auditors in terms of audit reviews and the extent to which reliance is placed on internal controls. The qualitative case study approach was employed in order to gain a deeper understanding auditors’ construct of internal controls within the public sector context. Furthermore, purposive sampling technique was applied in this study and thematic analysis was used to analyze the responses from the semi-structured interviews conducted. The study revealed that auditors had convergence views about internal controls as a structure with human agents responsible for its establishment. This was analyzed using Giddens’ Structuration Theory as a lens. Also, the study found out that internal controls were assessed by auditors in order to know whether to increase the workload by way of engaging substantive procedures during the audit or to reduce the workload in terms of testing and review. Finally, the study found out that most of the auditors interviewed placed their reliance upon internal controls based on the components of the COSO framework such as a control environment, risk assessment, control activities and monitoring. In terms of research, this study offers several potential contributions to the understanding of how both internal and external auditors construct their perceptions about internal control systems of public sector organisations particularly, that of Metropolitan, Municipal and District Assemblies (MMDAs) such as Nkwanta South in Ghana. Also, in terms of practice, this study stands to unearth the effectiveness or deficiencies in the internal control systems of some public sector organisations in Ghana. Finally, in terms of policy, the Auditor General can adopt the recommendations of this research and suggest policies and measures that will strengthen internal controls within public sector organisations in Ghana as a whole.