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Abstract
In the past, managers in the public sector had a narrower range of expectations for the
role of internal audit than managers in the private sector. This explains why the internal
audit function in the public sector was dominated by pre-payment audits. Thus internal
auditors devoted most of their time to the checking on individual transactions before the
payments were made. However, in recent years internal auditing has assumed a strategic
dimension and that underscores why it has become an essential component of public
sector governance and financial management reforms in many developing countries. The
intent of this paper is to present a position that internal auditing in the public sector,
when well structured and given the required mandate to perform, improves performance
and serves as a valuable resource in promoting good governance. It generates thoughts
on the importance and challenges of public sector internal auditing.
Keywords: Internal auditing, public sector, value addition, performance improvement
Introduction
Internal auditing is a profession and activity involved in advising organizations regarding
how to better achieve their objectives through managing risks and improving internal
control. Internal auditing involves the utilisation of a systematic methodology for
analyzing business processes or organisational problems and recommending solutions.
The scope of internal auditing within an organization is broad and may include various
internal control related activities such as the review of the effectiveness and efficiency of
operations, the reliability of financial reporting, investigation fraud, risk assessment,
safeguarding of assets, and compliance with laws and regulations. Internal audit activities
therefore provide assurance on the effectiveness of public sector entities’ internal control
environment and may identify opportunities for performance improvement.
Conclusion
A well configured internal audit function can play a vital role in the governance and
accountability process of public sector institutions through their assessments on the
effectiveness of key organisational controls, governance and risk management processes.
Governing bodies and senior management in the public sector need the services of
internal audit to be effective and efficient. At the same time the legitimacy of internal
audit activity and its mission should be understood and supported by senior management
of government entities to enhance its effectiveness in promoting good public sector
governance, control and risk management systems.
Modern internal audit practice has transformed into a professional discipline of its own
and as a partner to governance bodies with strategic focus of contributing towards the
improvement of organisational governance and risk management strategies. Internal audit
has now found itself in the corporate spotlight and it is no longer seen as a less important
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