Scope of Audit and Effectiveness of Public Sector Audit in Malaysia

Abstract

The public sector audit is a cornerstone for an effective corporate governance. However, its effectiveness largely depends on the scope of audit conducted in public sector agencies. Therefore, this paper examines scope of audit and its effects on the effectiveness of public sector audit in Malaysia. The respondents include the public sector auditors. By employing non-probability purposive sampling using 203 respondents and analysed using Partial Least Square Structural Equation Modeling (PLS-SEM), it was discovered that the scope of audit have a significant positive effect on the effectiveness of public sector audit. The finding reveals that performance and compliance auditing is crucial in public sector. A sound regulatory mechanism in terms of rewards and punishment should be fair and clear. This is important to ensure that the internal auditors strictly address the non-performance behaviours of the government. The research topic is relatively new in Malaysian public sector. This study is therefore likely to significantly contribute to the knowledge about how scope of audit operates in a public sector agencies context that differs significantly from the contexts of private sector agencies.