SAAPAM Limpopo Chapter 5 th Annual Conference Proceedings 2016 213 Audit Outcomes and Their Role in Clean Administration in Municipalities Within Limpopo Province, South Africa: A Deterrence Theory Approach N.E. Mathebula University of Limpopo Abstract In a period of three months subsequent to the end of every municipal fnancial year, the Auditor General of South Africa (AGSA) receives fnancial statements from municipalities within which to express various audit opinions which relate mainly to financial afairs. This paper is merely a legislative compliance exercise rather than one seeking to correct the status quo by attaching punitive measures to ofcials found to be responsible for non-conforming transactions. To sustain its argument, the paper uses the Deterrence Theory. The paper further argues that the use of punitive measures particularly in the recommendations by AGSA could serve to deter poor fnancial management and misuse of municipal funds. It could further assist in strengthening accountability and enhance municipal service delivery. The paper adopts a Content Analysis method to interrogate Audit Outcomes of Local Government: Limpopo Province to analyse the trends in relation to Audit Outcomes for the financial years ranging from 2011-12 to 2013-14. Keywords: Auditor General of South Africa, Audit opinion, Auditing, Prevention, Deterrence Theory. 1. Introduction In a period of three months subsequent to the end of every municipal fnancial year (1 July to 30 June the following year), the Auditor General of South Africa (AGSA) receives fnancial statements which municipalities are required to submit within which to express various audit opinions which relate mainly to fnancial afairs. This paper argues that the use of punitive measures utilising the Deterrence Theory as the theoretical framework particularly in the recommendations by AGSA could serve to deter poor fnancial management and misuse of municipal funds. This could assist in strengthening accountability and enhance municipal service delivery and clean administration. The paper adopts a Content Analysis method to interrogate Audit Outcomes of Local Government: Limpopo Province to analyse the trends in relation to Audit Outcomes for the fnancial years ranging from 2011-12 to 2013-14. In doing so, this paper specifcally focus on fndings arising from the audit of fnancial statements, fndings arising from the audit of supply chain management and fndings arising from the audit of unauthorised, irregular, fruitless and wasteful expenditure. This is so because; these are the areas which have been over the years as indicated by the AGSA as areas of major concern at a local government level. The paper attempts to do this by frstly explaining the design and methodology used to execute the paper, the conceptualisation of auditing as an activity, the theoretical framework used to view and address the challenges, the legislative framework underpinning auditing, explaining various audit opinions, fndings and fnally the conclusion and recommendations. 2. Design and Methodology A research design according to Mouton (2014:107) is a set of guidelines and instructions to be followed in addressing the research problem and enables the researcher to anticipate what the appropriate research decisions should be in order to maximise the validity of the results. In an attempt to interrogate audit outcomes and their role in clean administration this paper has adopted literature review and content analysis. Although closely related to hermeneutics, content analysis is a method used to analyse the content of documents (such as policy documents, annual reports and pieces of legislation) for any meanings, pictures, symbols, themes or messages that could be communicated (Wessels & Thani, 2014:167). The paper adopts a Content Analysis