The Challenges of Internal Audit in Contemporary Financial Management

Marinković, Ema; Šestović, Marina M.

doi:10.15308/finiz-2015-73-77

Cited by 2 publications

(4 citation statements)

References 3 publications

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“…Popescu & Omran (2011) signifies having an effective IAF in the public sector is a crucial component of governance as it ensures ample administration of public revenue and expenditure. Marinković & Šestović (2015)affirms that effective IAF is essential to enhance transparency and accountability at all levels of public sector administration through their independence, methodology and standards. Peerthum, Gunputh, & Luckho (2020) reveals through a mixed method study using 396 completed questionnaires and content analysis for corruption cases investigated and prosecuted to determine corruption typology reflecting the public sector of Mauritius, that corruption level in the country has increased in comparison to previous years with high pessimism on the capability and willingness of the government to fight corruption.…”

Section: Public Sector Corruptionmentioning

confidence: 78%

“…With several factors that determine effectiveness of IAF, Marinković & Šestović (2015) identifies that IAF can be viewed as a vital component that protects financial interests of the public and government, and a strong relation with top management is crucial to to attain effectiveness and ensure prompt implementation of corrective actions reported by the function. Arel, Beaudoin , & Cianci (2012) claims that effective monitoring mechanism will not be available through a weak IAF, resulting in less effort to establish a check and balance system unlike a strong IAF that encourage ethical values from the management.…”

Section: Effectiveness Of Internal Auditmentioning

confidence: 99%

“…Arena & Sarens (2015) agrees internal and external factors such as formation of regulations, recognition of the profession and its role by officials in authoritative positions and development of professional bodies to overcome challenges of organisational dynamics over practicing internal auditors, significantly influences the future of the IA profession. Marinković & Šestović (2015) perceives potential differences in IAF from one institute to the other in the public sector based on complexity, size and services provided with additional challenges due to variances in accounting standards applied, competency of audit team and social compromises although IAF is vital particularly in developing countries. Obert & Munyunguma (2014) signifies existence of negative perception and misconceptions towards IAF due to fear of loss of jobs, lack of adequate knowledge and perception of public officials who gain personal benefits from institutes resources has discredit the auditing profession resulting in lost credibility on audit reports.…”

Section: Challenges To Implement Internal Auditmentioning

confidence: 99%

“…The numerous cases of corruption, embezzlement of funds and money laundering being reported in the country, makes establishment of IAF crucial to strengthen internal control system, improve risk management and establish good governance mechanism to enhance transparency and accountability, thus mitigate corruption. Marinković & Šestović (2015) states that the financial markets and global economies are highly distressed due to extensive financial scandals which has raised importance for legal and regulatory reform to promote and strengthen good governance practices in private and public sector, however, there has not been adequate research carried out resulting in declined role of IAF and its independence.…”

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confidence: 99%

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Fighting Corruption in the Public Sector by Implementation of Effective Internal Audit Function

Rasheed¹,

Jothimuni²

2021

theijbm

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IntroductionAs countries embark on a road to a resilient and inclusive economy, global scandals on corruption have escalated in an unprecedented scale in every continent, from Asia to Africa, Europe and America. The size, magnitude and complexity of operations has increased to a high level, with state administrations observing new methodologies to identify ambiguities and entry points for activities of corruption (The World Bank, 2020). Countries around the world has embarked on numerous forms of reform endeavors such as enhancing financial controls, financial reporting, transparency, accountability and governance in the quest to fight corruption in the public sector. A central component in the reform course is focused on monitoring and control of resources through audit and regulatory disclosures (Paterson, Changwony, & Miller, 2019). Internal audit (IA) is an essential feature in the reform process creating an ethical environment with solid governance controls to mitigate public sector corruption, a long-standing scourge on nation development. This research is focused on the role of effective internal audit function (IAF) in mitigating public sector corruption, challenges and reasons for lack of IAF, adequacy of existing internal control system, risk management processes and governance mechanism and providing recommendations to strengthen IAF in the public sector of Maldives.The public sector of Maldives comprises of 17 ministries and32 State Owned Entities (SOEs) as of 2021 (Ministry of Finance, 2021; The Presidents Office, 2021). Further, city councils, atoll councils and island level councils are elected to facilitate provision of basic necessities and essential services required by all citizens in the nation. This raises significance of public sector integrity and transparency, good governance mechanism and operating effectiveness to mitigate fraud, malpractices and corruption of public funds and resources.The eminence of internal audit has elevated in the world due to increased number of corporate collapses and financial scandals. International Professional Practices Framework (IPPF) of Institute of Internal Auditors (IIA) defines internal audit as an independent and objective consulting activity which add value to an organization and strengthen internal control system, effectiveness of risk management processes, and governance mechanism through a systematic and

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Section: Public Sector Corruptionmentioning

confidence: 78%

Section: Effectiveness Of Internal Auditmentioning

confidence: 99%

Section: Challenges To Implement Internal Auditmentioning

confidence: 99%

mentioning

confidence: 99%

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Fighting Corruption in the Public Sector by Implementation of Effective Internal Audit Function

Rasheed¹,

Jothimuni²

2021

theijbm

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Factors affecting the internal auditors’ effectiveness in the Jordanian public sector

Alqudah

Amran

Hassan

2019

EMJB

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Purpose The purpose of this paper is to investigate the moderating effect of task complexity on external auditors’ cooperation (EAC), top management empowerment and internal auditors’ independence, which affect internal auditors’ effectiveness in the Jordanian public sector. Design/methodology/approach This paper utilised 117 usable questionnaires from financial managers and internal audit (IA) managers of the Jordanian public sector institutions. The collected data were analysed using partial least squares-structural equation modelling (PLS-SEM). Findings The results reveal that EAC, top management empowerment, and internal auditors’ independence are the factors which positively and significantly affect the internal auditors’ effectiveness, as supported by the resource-based theory, with incomplete support for the task complexity’s role as a moderator. Practical implications The findings are important for the decision-makers and regulators in introducing new legislation and regulation for the IA profession in the Jordanian public sector. Social implications It is shown that the factors affecting the internal auditors’ effectiveness can definitely enhance their ability to achieve the role of IA in protecting public funds and limiting financial and administrative corrupt practices, particularly in the public sector. Originality/value To the best knowledge of the authors, this study is one of the first studies that addresses task complexity as an interaction effect on the factors affecting internal auditors’ effectiveness in the public sector.

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The Challenges of Internal Audit in Contemporary Financial Management

Cited by 2 publications

References 3 publications

Fighting Corruption in the Public Sector by Implementation of Effective Internal Audit Function

Fighting Corruption in the Public Sector by Implementation of Effective Internal Audit Function

Factors affecting the internal auditors’ effectiveness in the Jordanian public sector

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