Assessment On Internal Audit Capability Level: Case Study Of Two (2) Penang State Agencies
Loading...
Date
2015
Authors
Aireen Mak, Siew Fern
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
Internal auditing (IA) has become an important function in assisting the public sector organisation in achieving its objectives efficiently. IA function has been regarded as critical especially in the public sector, which holds a great responsibility of diverse stakeholders. The main objective of this study is to explore the level of capability of IA in two public sectors of the government agencies in Malaysia. Internal Audit Capability Model (IACM) from the Institute of Internal Audit Research Foundation which was used as a basis to assess the capability level of IA. A series of interviews were conducted with IA policy coordinator from Ministry of Finance, Head of IA from the Prime Minister’s Office and two government agencies, and Head of National Audit Penang to better understand public sector IA’s structure and performance measurement systems, as well as to assess suitable samples for the case study. There are five capability levels of IA function that are being assessed in this study, namely Initial, Infrastructure, Integrated, Managed and Optimizing. Findings of this study shows that for Public Sector’s A Capability level is 2 (Infrastructure) with total Key Process Areas (KPAs) achievement of 67%. Public Sector’s B shows a Capability level at 2, similar achievement as Public Sector A and with total KPAs achievement of 69%. In summary, the outcomes of the 2 sample studies shows that the preliminary evaluation of Malaysian public sector are at capability level 2 with KPAs of above average. IACM evaluation outcomes of the 2 public sector also show strong establishment in elements Services and Role of IA and Organisational Relationships and Culture, scoring a capability level of 4 or 5. There is a need to
review the remaining elements (People Management, Professional Practices, Performance Management and Accountability, and Governance Structure which were evaluated at capability level 2 or 3 to enhance the effectiveness of the IA function. Hence, it is recommended to establish a standardize performance measurement for all IA function in the public sector at both federal and state levels, and across all government agencies The IACM model can serve as a centralize assessment to serve as a common communication vehicle within the country as well as globally.
Description
Keywords
Internal auditing , Public sector