Innovation in Performance Auditing to Enhance Transparency, Good Governance, and Anti-Corruption at the State Audit Office of Viet Nam

Author: State Audit Office of Vietnam

I. Introduction

At present, countries around the world are facing significant pressure to strengthen public governance, achieve the United Nations Sustainable Development Goals, and fulfill commitments to preventing and combating corruption, wastefulness, and other negative practices. In this context, Sustainable Development Goal 16 highlights the importance of enhancing transparency, good governance, and combating corruption in all its forms. At the same time, the Abu Dhabi Declaration of the International Organization of Supreme Audit Institutions (INTOSAI) also emphasizes and reinforces the role of Supreme Audit Institutions (SAIs) in preventing and combating corruption more effectively.

As an active member of INTOSAI, the State Audit Office of Viet Nam (SAV) has continuously made efforts to strengthen anti-corruption work through audits of major thematic areas relating to the management and administration of the state budget and issues susceptible to irregularities, corruption, and wastefulness, while promoting the application of new tools, techniques, and audit methodologies in this field.

II. Performance Audit and Its Role in Public Governance and Anti-Corruption

According to INTOSAI’s ISSAI 3000, performance audits assess the economy, efficiency, and effectiveness (3Es) of public programs, policies, projects, and activities. The relationship between performance audit, public governance, and anti-corruption is reflected in the following aspects:

First, compared with compliance and financial audits, the selection of potential performance audit topics involves a more comprehensive process, including the development of topic selection criteria, audit programs and audit plans, the assessment of potential impacts, and the formulation of anticipated recommendations from the outset of the audit. The selection of appropriate audit topics, thorough preliminary surveys, and detailed audit planning help identify unusual signs, gaps in power control mechanisms, and deficiencies in internal control systems, thereby enabling the early identification of risks of corruption and waste within audited entities. 

Second, performance audit serves as a tool for enhancing transparency through the disclosure of results and the effectiveness of the management and use of public finance and public assets by organizations and budgetary levels. Performance audit is an important component in supporting public authorities responsible for the management and use of public finance and public assets in enhancing accountability, strengthening integrity, and reinforcing public trust. It also provides a basis for oversight and scrutiny by the National Assembly, People’s Councils at all levels, members of the National Assembly, People’s Council delegates, state agencies, socio-political organizations, and citizens over the management and use of public finance and public assets, thereby reducing the risks of corruption and wastefulness.

Third, performance audit contributes to improving public policies by providing independent, objective, and evidence-based assessments of policy implementation processes as well as policy results and performance. Beyond identifying deficiencies or wastefulness, performance audit helps reveal shortcomings in policy objective setting, resource allocation mechanisms, performance measurement systems, inter-agency coordination processes, and the extent to which intended objectives have been achieved. On that basis, it identifies gaps in institutional and policy frameworks and recommends corrective actions, thereby assisting public authorities in adjusting, amending, or replacing outdated or inappropriate regulations. Therefore, performance audit serves as an important policy feedback mechanism, contributing to improved public decision-making and promoting public governance that is transparent, effective, and results-oriented.

III. New Tools and Approaches in Performance Auditing

1. Full-Population Auditing

In the context of the Fourth Industrial Revolution, the application of technology and digital transformation has become an urgent requirement for the SAV. For performance auditing, this innovation has facilitated a shift from traditional audit approaches based on sampling and manual testing to a comprehensive audit model based on digital data and AI applications. This approach addresses the limitations and risks of traditional audit methods that rely on the assessment of internal control systems and sampling techniques, which examine only a portion of available data. The application of big data analytics tools enables auditors to examine and analyze entire datasets, thereby enhancing the ability to detect errors, fraud, and corrupt practices. However, this approach requires investment in and further development of databases and information technology applications to collect, store, and analyze information relevant to audit topics. To date, SAV has developed an audit knowledge management software application based on a database of audit findings and detected deficiencies in the local budget sector. We have also built a database covering the period 2023–2025 from 180 audits, comprising approximately 10,700 audit findings and deficiencies identified from 2,097 audited entities across 34 provinces and centrally governed cities. The software is capable of extracting and classifying data from audit reports through the integration of artificial intelligence and optical character recognition (OCR) technologies. It also provides multidimensional analytical dashboards, semantic search functions, and support for auditors in identifying similar findings and recommendations for reference purposes.

2. Innovations in Analytical Techniques and Performance Audit Methodologies

Analytical techniques and approaches in performance auditing have also undergone significant innovation, with the objective of not only making audits faster but also conducting audits in a smarter, deeper, and more impactful manner for public governance. Key innovations include:

Application of pattern, trend, and data analysis techniques

The SAV has introduced and operated the Centralized Audit Management System (AMS), electronic audit logs, and specialized data analytics software. By 2025, SAV’s data repository contained more than 100 million records, and six artificial intelligence (AI)-based software applications had been deployed to analyze operational patterns and trends of audited entities. These applications support budget monitoring, risk assessment, financial transaction review, public investment oversight, and green expenditure assessment, enabling the system to scan entire datasets and predict trends of irregularities and fraud, thereby allowing the audit institution to intervene at an early stage. At the same time, AI adoption is expected to be transformative, enabling SAV to gradually shift toward intelligent and proactive oversight of the management and use of public finance and public assets across ministries, sectors, local governments, agencies, and public entities. The emergence of AI and big data analytics technologies also enhances objectivity, reduces subjective bias, and generates valuable policy recommendations. AI can further forecast trends of irregularities and fraud, enabling audit institutions to take early action rather than responding after incidents have already occurred.

Innovation in Audit Methodologies

Technology can only deliver its full value when applied within an appropriate audit approach. Innovation in performance auditing is not merely the digitalization of traditional audit processes; rather, it involves transforming the way audit evidence is collected based on audit criteria and relevant data analysis, shifting from a focus solely on assessing the 3Es to analyzing root causes and evaluating performance from a system-wide perspective. 

Specifically: (i) A valuable audit result should not merely determine “whether a program has achieved its objectives”; it should also explain “whether the program was designed with appropriate objectives”, “whether the input data were reliable”, “whether coordination mechanisms and resource allocation criteria were reasonable”, and “whether implementation capacity and oversight mechanisms were capable of identifying risks”; (ii) A system-oriented approach does not simply examine the results of the 3E assessment in isolation; it requires analysis of the system as a whole and evaluation of the entire operational mechanism that produces those results. Auditors should focus on factors such as governance arrangements, allocation of responsibilities, internal control systems, decision-making processes, data quality, inter-agency coordination, and monitoring and feedback mechanisms.

IV. Conclusion

Innovation in performance auditing is an inevitable requirement to meet the growing demands for transparency, good governance, and the prevention and combating of corruption, wastefulness, and other negative practices. Through the selection of appropriate audit topics and the application of data analytics, artificial intelligence, and innovative audit approaches, Performance auditing can not only be conducted more efficiently but also in a smarter, deeper, and more impactful manner for public governance. In the years ahead, the combination of modern technologies, big data, and auditors’ professional judgment will provide an important foundation for the State Audit Office of Viet Nam to further enhance audit quality, contribute to improving public policies, strengthen public trust, and prevent corruption, wastefulness, and other negative practices at an early stage and from afar.