Sharpie, as long as CAA is run at a local level, I don't believe it will EVER change for the better - audit or no audit. The audit is only going to make official in ICAO-land what they already know.
The only way that PNG CAA could be fixed now within any reasonable time-frame would be to clean it out and have a reputable foreign civil aviation authority run it under contract. Many years ago the FAA were in several Middle Eastern countries and the UK CAA had a heavy influence in their former colonies, so the concept of one country's authority running another country's CAA is not new. Maybe unpalatable to some of the locals, because of the colonial overtones. The Aussies handed them a fairly good civil aviation structure and all they have done since is completely run it down.
Then there is the problem of money. Without LOTS of it, the infrastructure will never be fixed. Also without money to pay good salaries and offer good expatriate conditions, the CAA there will never attract people of the right calibre in sufficient numbers to sort it all out.