The Contribution of the State Audit Office to Good Governance and the Renewal of Accounting

Ágnes Katalin Pályi
Auditor, State Audit Office of Hungary
Published in: Public Finance Quarterly 2015/4 (p. 526-547.)

SUMMARY: The article examines the activities of the State Audit Office of Hungary from the perspective of the contribution to good governance, typically building on the method of document analysis. By presenting the parallels and differences existing between the various ideological trends, it paints a picture of the general principles of good governance, in particular of the significance of the enforcement of accountability and transparency that forms the basis of controllability. The debates surrounding the measurement of the ‘goodness’ of the state has been ongoing among the professional-academic audience, as a result of which numerous indicator systems have been created in recent years. Processes that promote the enforcement of the basic principles of good governance have started at both international and domestic levels. Special attention should be paid to the 2014 public accounting reform in Hungary, and on a related note, the role undertaken by the SAO in preparing the transition to accrual-based accounting and the subsequent interpretation of the impacts of the transition. After the presentation of the results of the transition, the article emphasises the reinforcement of the advisory function of the SAO, it elaborates on the anomalies surrounding the assessment of asset content, which may serve as the basis of further research aimed at the rethinking of current accounting regulations and increasing the accountability of the public sector down the line.

KEYWORDS: state audit office, good governance, accrual-based accounting, audit, expediency, effectiveness, efficiency, transparency, accountability


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