This paper aims to conduct a comparative study by examining the Audit Committee (AC) set-up, roles, responsibilities and developments in two distinct English public sector settings, namely, foundation trusts (FTs) and local authorities (LAs).
The paper is exploratory and explanatory in nature and uses a qualitative case study approach framed in institutional theory. It is based on semi-structured interviews with AC chairs, external and internal auditors and finance directors triangulated with meeting observations and documentation review.
The study finds that public sector ACs have a large and diverse role which extends beyond challenging/monitoring responsibilities. Influenced by the New Public Management ideology, the AC has developed more rapidly in FTs due to imposed regulation contrasting with the slower progress in LAs due to its still voluntary adoption. Nevertheless, in both environments, there is a developing understanding and growing competence within the AC in terms of their assurance role where the focus has shifted from an emphasis on function and on transacting business through following a manual, to a more strategic-looking approach.
Due to the complexity of public sector settings, and by using an approach framed within institutional theory, the study contributes by challenging a simple notion of isomorphism as an explanation of AC roles, responsibilities and development in two distinct public sector environments. Furthermore, the study recognizes that there is a need to ensure ACs are appropriate to their institutional setting and organizational context.
Most AC studies have focused on private sector contexts. This paper explores the phenomenon in a different organizational context, namely, as a public sector comparative case study.
