Revitalizing accountability: exploring the impact of performance audits in Indonesia’s public sector
Authors: Setyaningrum Dyah , Azhar Zubir , Kuntadi Cris , Dharmayuni Lita 
Published: February 2025

Purpose

This study examines the perceptions of auditees from ministries/agencies and local governments in Indonesia of the quality and impact of performance audits. Additionally, it investigates the extent of improvements and changes implemented by auditees in response to audit findings and recommendations.

Design/methodology/approach

The research employed an online survey to collect data from auditees in ministries/agencies and local governments (at provincial, city and district levels) that underwent performance audits between 2018 and 2022. A total of 180 valid responses were analyzed using descriptive statistical techniques, including mean score ranking and frequency distribution.

Findings

The findings reveal that the auditees perceive that performance audits have a high level of quality and provide significant benefits. The respondents noted that such audits play a critical role in enhancing performance, serving as effective accountability tools and improving operational efficiency. Five key areas of significant impact were identified: (1) strategic shifts in planning and management by objectives, (2) enhancements in standard operating procedures, (3) improvements in internal control and risk management systems, (4) updates to laws and regulations and (5) institutionalization of improved governance practices. However, increased documentation and reporting pressures emerged as notable challenges.

Research limitations/implications

The study is limited by its reliance on descriptive and correlation analysis. This restricts the depth of insights into the causal relationships between variables and limits the robustness of the findings. Future research should consider incorporating experimental designs or hypothesis testing with regression analysis to provide a deeper understanding of the causal impact of performance audits. This approach could enhance the generalizability and applicability of the findings, particularly in the framing of performance audits as a policy recommendation for mandatory implementation.

Practical implications

The study contributes to the literature by addressing the underexplored area of performance audit impacts in developing countries, particularly Indonesia. It highlights the role of such audits as drivers of governance reform and operational efficiency, filling a critical gap in public sector auditing research. Unlike previous studies that have focused on audit processes or developed country contexts, this paper underscores the unique challenges and opportunities in a developing country setting. It is recommended that performance audits be made mandatory to enhance their effectiveness in fostering governance improvements.

Originality/value

The novelty of the work lies in its context-specific insights and focus on the broader implications of performance audits for public sector accountability and operational improvement in a developing country, with practical recommendations for policymakers and audit practitioners made.