Auditing

If accountability is the hallmark of democratic governance, public auditing is a means to achieve it. Auditing is a form of oversight, or examination from some point external to the system or individual in question. Technically, auditing is a form of verification by an independent body, which compares actual transactions with standard practices. Because it evaluates the relationship of what is against what ought to be, auditing is a normative operation. Public auditing is the traditional instrument to hold actors entrusted with managing public funds accountable by providing information to supervising agents, elected officials, and (sometimes) constituents about compliance with or deviations from accepted standards. Although accountability as a general aim of auditing is undisputed, unavoidable tensions with other principles of good governance arise, such as the exercise of informed discretion by elected decision makers or individual privacy rights when the corset of control is taken to an extreme.

The media, interest groups, private overseers (e.g., credit-rating agencies), international organizations, public audit institutions, and the general public increasing see modern government as an object of scrutiny. At the same time, government regulates society and delivers services through myriad national, international, nonprofit, and private organizations, making control a highly complex issue. The question is: Who oversees whom for what purpose, under whose authority, with what kind of legitimacy, and how?

The balance of autonomy and control is a classic topic for students of government. It touches on [Page 103]issues such as responsibility, trust, functional differentiation, authorization of execution, assurance, and accountability. At its center stands the question of how public organizations can be task efficient and accountable at the same time.

This entry is divided into four sections: The historical traditions of auditing are traced in the first section, the second one introduces different institutional arrangements of auditing, the third one sketches the main arguments of the audit explosion discourse, and the final one illustrates the politics of auditing.