A comparison of internal audit in the private and public sectors

Abstract

This paper explores similarities and differences between public sector internal auditing and its counterpart in the private sector. Features examined include organizational status, outsourcing, using internal audit as a “tour of duty” function, activities and relationships with the external auditor. The study is based on a survey of chief internal auditors in organizations in Australia and New Zealand. Results suggest that there are differences in status between internal audit in the two sectors, with public sector internal auditors less likely to report to the chief financial officer. While a similar amount of work is outsourced, public sector organizations are more likely than those in the private sector to outsource to the external auditor. There is little difference between internal audit activities and interactions with external audit in the two sectors. However, private sector internal audit is perceived to lead to a greater reduction in audit fees compared to that in the public sector.

Internal audit effectiveness: an Ethiopian public sector case study

“…This definition signifies that internal audit has undergone a paradigm shift from an emphasis on accountability about the past to improving future outcomes to help auditees operate more effectively and efficiently (Nagy and Cenker, 2002;Stern, 1994;Goodwin, 2004). Since, the definition equally serves both the private and the public sectors (Goodwin, 2004), it is used in this study as a basis to analyse public sector internal audit effectiveness.…”

“…Since, the definition equally serves both the private and the public sectors (Goodwin, 2004), it is used in this study as a basis to analyse public sector internal audit effectiveness.…”

Internal audit function: a comparison between private and public sector in Nigeria

“…Their result indicated that 72 percent of the audit committee members were involved in the dismissal of the chief internal auditor. In a similar situation, [13] reported that 52 percent of the Australian and New Zealand audit committee members are involved in the decision to dismiss the chief internal auditor.…”

“…Previous studies of [21] indicated that 69.41 percent of Italian firms do not outsourced internal audit services. Whereas, [13] indicated that 68 percent of public sector entities and 65 percent private sector entities engaged in outsourcing internal audit services.…”

“…There were 41 responses from the private sector organizations representing 60.29 percent and 27 responses from public sector representing 39.17 percent. The questionnaire was structure following previous studies with little modification [13], [20]- [22] each question was designed to incorporate responses expressed in multiple choices that enabled the respondents to express their opinion.…”