The outbreak of the Covid-19 pandemic put high expectations upon ECA to continue providing an effective public audit service in the European Union (EU) and delivering timely audit reports, opinions, and reviews. The work methods and program of ECA has changed substantially, focusing on audit tasks to deal with the EU’s responses to the COVID-19 pandemic and the implementation of the “Next Generation EU” (NGEU). This paper aims to explore how the Covid-19 outbreak changed the role of ECA as the EU’s external auditor by looking into the role of ECA as institution and the role of EU auditors. We focus on both the challenges of ‘auditing at a distance’ that Covid-19 pandemic and the EU’s recovery packages bring for ECA’s audit (financial, compliance and performance) and the effects of Covid-19 on working conditions at ECA.

We locate our own interest in the public sector auditing processes and practices in this landscape. More precisely, we explore ways in which reinventing auditing can be seen as one way of ‘auditing at a distance’ (inspired by ‘auditing at a distance’ of Miller and Rose, 1990; Rose and Miller; 1992) and then consider the strange mixture of distance and proximity that auditing seeking to create locales, entities and persons able to operate a regulated autonomy.

For the study, a combination of different sources and research methods was used to collect data. We analysed secondary data, namely: official decisions and documents issued by ECA and other EU Institutions, e.g., the European Commission and the Parliament. In addition, we conducted interviews with 11 key actors with different expertise in financial, compliance and performance audit and included ECA members, Director of the Presidency (DOP), Directors of different chambers engaged into carrying out and planning Covid-19 related tasks (RRF/NGEU and Covid-related work) and Principal Managers.

The preliminary results showed that ECA role and activities in term of financial and compliance auditing has changed and now ECA is also responsible to examine the Commission’s control system for the RFF to assess how it contributes to ensuring that the milestones and targets are satisfactory fulfilled and that the Union’s financial interests are protected. The effects of covid19 on ECA working conditions are also visible. ECA is currently on a post-covid balancing stage, since it introduced a hybrid working decision with a combination of remote auditing in videoconferencing and on the spot auditing missions.

In the evolving context of the audit society, including its digitalisation (Power, 1997, 2022), public sector organisations and their employees are increasingly expected to give accounts of their actions to multiple accountability forums, while facing the consequences and sanctions for any inadequate conduct (Koppell, 2005; Schillemans & Bovens,2011). Such different accountability forums have the right to obtain information and to use it in the evaluation of the account-giver (Steccolini, 2004) through different accountability mechanisms – sometimes leading to accountability overload (Allen et al., 2016; Wood, 2015; Bovens et al., 2014; Halachmi, 2014; Bovens, 2007) and/or to accountability gaps (Bracci, 2022).

Despite multiple accountability forums may hold similar expectations towards the actions of account-givers, incompatible demands from the accountability forums leads to the emergence of a conflictual accountability (Schillemans, et al.,2021). Thus, public sector organisations and their members must cope with conflicting goals and priorities set by multiple accountability forums. When public sector organisations experience these multiple pressures as somewhat incompatible it is argued that they face institutional complexity (Greenwood et al.,2011). As previously discussed on the organisational institutionalist literature, public sector organisations and their members may respond strategically to these conflictual demands (Pache & Santos,2013) adhering to such incompatible prescriptions and understandings to guarantee their legitimacy (Meyer & Rowan,1977). Importantly, the way individuals in organisations experience institutional complexity may affect their responses to the context stemming from incompatible institutional logics prescriptions (Ocasio & Radoynovska,2016; Bertels & Lawrence,2016).

Extant literature has extensively debated the issue of conflictual accountability (Koppell, 2005; Schillemans & Bovens, 2011; Bovens et al., 2014; Schillemans & Smulders, 2015; Shillemans et al., 2021; Aleksovska & Schillemans, 2022), but largely from an organisational point of view. However, the role of individuals and their experiences regarding the conflictual accountability is a crucial aspect to understand how public sector organisations may cope with this situation. A handful of studies started to look at the individual level searching for answers on how public managers (Schillemans & Smulders,2015), street-level bureaucrats (Tu & Gong,2022; Hwang & Han,2017), or regulators (Aleksovska & Schillemans, 2022) resort to some specific strategies to manage multiple – and contradictory – demands from accountability forums. What is missing, however, is a better integration of such strategies to the anticipation, information, debating and judgment stages of the accountability cycle (Mulgan, 2003; Bovens, 2007; Schillemans & Bovens,2011; Schillemans & Smulders,2015). This seems relevant for two reasons. First, different actors may have a preponderant role in different stages of the accountability cycle and deploy unique strategies to manage conflictual accountability – as follows from the importance of actors’ interpretations affecting organizational responses to institutional complexity. Second, the literature so far has remained silent about the role of “anticipation” in dealing with conflictual accountability. According to Schillemans and Smulders (2015), even before informing the multiple accountability forums, public sector members make decisions based on anticipation of the views and actions of the (multiple) forum(s) in the following accountability phases. This means that members’ anticipation of the broader accountability cycle may impact their actions, as “people and groups make sense of, interpret, and enact institutional prescriptions” (Greenwood et al., 2011:344).

Thus, our study aims to analyse how public sector organizations’ members (account-givers) manage conflictual accountability demands from multiple accountability forums during different phases of the accountability cycle. Semi-structured interviews were carried out with those involved in the financial accountability in Brazilian local governments such as accountants, auditors, lawyers, central government regulators and external consultants. Brazilian local governments were selected since there is a wide range of studies discussing the conflictual demands posed by central government’s ministries, public sector audit organisations and the legislature on their accounts (Lino, Aquino & Neves, 2022; Fernandes & Teixeira, 2020; Aquino, Lino, Cardoso & Grossi, 2020; Nunes, Marcelino & Silva, 2019).

We present three preliminary results. First, the individual account-givers of local governments in Brazil deploy different strategies at each stage of the accountability cycle to cope with conflictual accountability demands. The drivers of such strategies are the (lack) of enforcement and sanctions by some of the accountability forums and the political needs of elected politicians. Second, local government’s members anticipate that there is a low credibility on the sanctions to be posed in case omissions in the account giving happens; even when sanctions are expected, members of public sector organisations can appeal to the Judiciary or Legislative to absolve them from any responsibilities based on the divergent demands from multiple accountability forums. Expanding Schillemans and Smulders (2015), we find that actors anticipate actions that will occur outside the traditionally accepted accountability cycle. Third, account-givers use the complexity of the digital infrastructure created by the accountability forum to make it difficult to verify their actions. In sum, the financial accountability cycle in Brazil becomes a ceremonial exercise following the strategies deployed by civil servants and elected politicians to cope with conflictual accountability.

Public sector reforms in developing countries have been implemented at a slower rhythm compared to more developed countries (Christiaens et al., 2015; Polzer et al., 2021) associated with the lack of qualified staff on financial and accounting issues, excessive control rather than concern for customer service, and a legal context that does not facilitate change and flexibility (Ouda, 2014). In addition, developing countries continue to suffer from some institutional weakness, notably in the areas of legislation on public sector reform, bureaucratic structures, the information environment, and training and technological application (Ouda, 2014). The above problems and difficulties are common in most emerging countries on the African continent, particularly in the context of Mozambique (Awortwi, 2010; Jreisat, 2010;). Goddard (2010) and Rahaman (2010) warn that one of the major issues in the developing world is poverty reduction and it is recognized that public sector accounting has a key role to play in this domain through the effective allocation of resources. In this context, the implementation of accounting changes, including the implementation of accrual accounting (AA) in the public sector, programme and performance-oriented budgeting, has been a key part of the financial reform agenda undertaken by international organisations in developing countries, notably the World Bank (WB) and the International Monetary Fund (IMF), since the 1980s (Allen, 2009).

Mozambique is a country that has continuously resorted to foreign assistance from the WB and the IMF to support its economy, which has forced it to adopt and implement rigorous economic reform programs with a view to macroeconomic stabilization. However, despite the WB's 1996 initiative for debt reduction, the country remained heavily indebted (Webster & Wood, 2005). On the other hand, some changes were introduced in the Mozambican public administration, namely at the level of public accounting, which will be analyzed in this study.

With this article we aim to achieve three research objectives: (1) to understand how accounting professionals in the Mozambican public sector perceive the transition to Accrual Accounting (AA); (2) to investigate the level of use made of the information produced and the main difficulties experienced and (3) explore the differences in the perception of central and local government professionals. To achieve the proposed objectives, we develop quantitative research based on the collection of primary data obtained through a survey addressed to the directors and those responsible for the area of finance/accounting. From a population of 253 central and local entities, we obtain 87 completed surveys with a response rate of 34% (being 69 from central government and 18 from local government).

The study developed on the transition to AA in the context of an emerging economy such as Mozambique, where the problems of corruption and weak economic development are still a reality, constitutes an important contribution to the literature and knowledge in this area. On the other hand, this study seeks to innovate by exploring the differences in the perception of central and local government professionals about accounting reforms and their difficulties, contributing to support public accounting reform policies and measures in emerging contexts. Despite some studies already developed, research carried out in the African context is still scarce (Mbelwa et al., 2019), with a particular focus on Mozambique.

The preliminary results show a lack of knowledge about the application of AA by professional accountants. However, their perception of the transition to AA in the Mozambican context is very positive because this change from a cash basis to AA will improve the transparency of financial reporting, accountability over the performance of the public sector and the quality of the accounting system. Public accounting professionals also highlight the important role of AA implementation in the fight against corruption. The difficulties associated with the lack of qualified training and qualification of workers and adequate information systems, in addition to the lack of support and commitment of the leaders to implement the reforms constitute relevant obstacles to the transition to AA. In a context such as Mozambique, where corruption is still a problem for the country's development, the pressure exerted by state and professional bodies to make the transition to OA is decisive. Thus, coercive and normative isomorphism seems to be a determinant for the transition to AA. Significant evidence was also obtained on the different perceptions of central and local government professionals, the latter showing a higher predisposition to transition to AA.

The present work is structured in 6 sections. After the introduction, the second section presents the literature review and theoretical background. Section 3 presents the context of Mozambique, followed by the research methodology in section 4, while section 5 presents the preliminary results. The study ends with section 6 where the discussion, the main conclusions, the limitations of the study and the clues for future research are presented.