Promoting Good Governance in Public Institutions of Ghana: The Role of the Internal Auditor Introduction
All over the world there is a realization that the Internal Audit activity has the potential to provide hitherto unparalleled services to management in the conduct of their duties. This potential has been turned into a challenge and embodied in the new definition of Internal Auditing from the Institute of Internal Auditors (the IIA). Background of the Study
The Government of the Republic of Ghana by the Internal Audit Agency Act, 2003 (Act 658)established the Internal Audit Agency “as an apex oversight body to co-ordinate, facilitate and provide quality assurance for Internal Audit activities within the public sector” (Section 16 of Act658). The Internal Auditor’s value lies in how well he has been able to contribute to the achievement of the overall organizational objective. The Internal Auditor should constantly seek to make himself relevant to his organisation by providing information that will make management take decisions that impact positively on their ability to achieve the organizational goals. However, according to research and surveys conducted by Deloitte & Touché (2004) and the Internal Audit Agency of Ghana (2006), much of the work of Internal Audit has been very restrictive in terms of scope. This needs to be addressed if the required return on investment in the Internal Audit activity is to be attained. Problem Statement
Public sector managers do not support Internal Audit. The Internal Audit function in the Ghanaian public sector faces a perception and, to some extent, a credibility problem as a value-adding unit of the organization. The Internal Audit Agency (2006) believes that the importance of Internal Audit is "shrouded in obscurity”. This unfortunate background continues to play down the importance of Internal Audit as a key function that can strengthen the oversight responsibility of the governing body. This reflects in the management attitude towards the Internal Auditor. Most often than not the budget of the Internal Audit Unit, if any exist at all, is woefully inadequate to enable them meet the resource requirements of their annual audit plans. Internal Auditors are seen more as fault finders rather than solution providers and partners in the Government’s strive for organizational excellence.
Why do public sector managers fail to support the Internal Audit function and what can be done to curb it? Research Questions:
1. What account for the low support for Internal Audit by public sector managers? 2. What actions are necessary to get the support of management of internal auditing in the public sector? 3. Is there a link between the quality of service the Internal Auditor provides for his organization and the attitude of managers towards the Internal Audit function? Hypothesis:
• There is no relationship between the quality service Internal Auditors provide for their organizations and the attitude of managers towards the Internal Audit function.
The objectives of the research project are to:
1. Examine the factors responsible for the low support for the Internal Audit Activity by managers of public institutions. 2. Identify specific actions required to secure support of managers for the Internal Audit Activity. 3. Establish the relationship between quality of service and support of managers for Internal Audit. Significance of Study
The significance of the study will be to:
1. Improve public understanding of the role of the Internal Auditor in the achievement of organizational objectives. 2. Improve literature on public sector Internal Auditing in Ghana. 3. Fulfill the MBA requirement.
The Government of Ghana has taken a proactive step in establishing the Internal Audit Agency (The Agency) by an Act of Parliament in 2003. The IAA is mandated to co-ordinate, facilitate and provide quality assurance for...