Internal Audit and Public Sector Management Effectiveness

Internal control and risk management, including fraud and corruption, are mechanisms of primary importance for the prevention of corruption by public officials themselves.

However, more needs to be done and these actions would include strengthening the implementation process and developing the internal control system in the dependencies and auxiliary agencies, as well as in the State’s municipalities, and guarantee accountability through a robust internal control and risk management scheme.

Internal Audit Consulting Firms?are essential for public sector administration to safeguard the integrity, enable effective accountability, and prevent corruption.

Internal auditing is a way of controlling the management of an entity, be it private or public, whose main aim is to know and examine the efficiency and strength of the other control systems present in that particular entity.

Although the internal audit within the internal control system, is aimed at evaluating the standards and policies set in the organization, it becomes more significant as the volume of operations of the institution increases and its growth and development make it difficult for the management or the highest executive authority to handle the operations.

One of the purposes of internal audit consulting firms in India is to assist public managers in fulfilling their duties by giving them advice and suggestions according to the evaluations made by them.

This objective is met through other more specific ones: Carry out examinations and evaluations, following a plan, and applying a program prepared under the established policies and procedures and aimed at complying with the following aspects:

• Evaluate the degree of compliance with the instructions, plans, and procedures issued by the management.
• Evaluate the consistency, sufficiency, and application of operational, accounting, and financial controls.
• Determine that the assets are registered and protected.
• Evaluate the veracity and reliability of accounting information and other information produced in the organization.
• Carry out special examinations requested by higher authorities and those that are necessary according to the circumstances.
• Issue audit reports on irregularities that arise as a result of the evaluations, expressing the recommendations that are deemed pertinent.
• Control compliance with the recommendations contained in the reports issued previously.

The growth of economic activity and the expansion of the volume of operations within the public sector originate a great complexity in the organization and administration, as well as the distancing of the highest authorities with the daily control of operations.

Due to this situation, the activity of the superior authorities of public institutions, as responsible before third parties and society in general, for the proper management of their interests, is exposed to the risk of not only breaches or distortions in the start-up of operating and information systems, but also to an inappropriate or wrong understanding of their decisions.

A necessary way for higher authorities to have a reasonable margin of security that this situation does not occur or to minimize this risk is for public institutions to have an effective internal control system.

And this system includes the organization plan and the set of methods and procedures that ensure that the assets are duly protected and that the accounting records are reliable, that the activity of the entity is carried out effectively, and that they are complied with according to the guidelines determined by the superior authorities and the operation of internal auditing.

This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.

Posted by:

CA Aman Aggarwal

AKGVG & Associates