Public sector auditing: Victoria's future direction

In December 1997 the Government of Victoria enacted changes to the structure of public sector auditing in Victoria. These changes result in policy making decisions to remain with the Auditor-General of Victoria and the operational component moving to a new organization known as Audit Victoria. Both performance reviews and financial audits will be performed by Audit Victoria or any of the qualified private sector suppliers on behalf of the people of Victoria. Allocation of this audit work is subject to a competitive tender process. This process is said to drive competition between audit providers, enhancing etficiencies, lowering costs and increasing quality. This paper analyses these proposed benefits and discusses implications for audit quality and independence.