Setting up an internal audit department within the Archdiocese of Malta : a case study approach

Abstract

Purpose This case study has evaluated the need of setting up an internal audit department within the Archdiocese of Malta, which is a non-profit making organisation. It has considered the implementation process involved in setting up the internal audit function, and how such a function can help the organisation achieve its objectives and overcome certain mismanagement problems. Design The theoretical framework seeks to highlight the process of setting up an internal audit department, including: the importance of preliminary planning, formulating reporting responsibilities, and developing and measuring the performance of the internal audit function. Besides reviewing literature on the subject, other relevant data was gathered from semi-structured interviews conducted with senior management of the Diocesan Office of Administration, one Audit Committee member, and the external auditor. Findings Findings were classified, analysed and presented in this study, together with a detailed discussion on a number of interesting points which emerged. These include the need to enhance internal controls, manage risk, develop a policies and procedures manual, and ensure good governance. Additionally, the research carried out shows that fear of change and failure to select the Chief Audit Executive with the necessary attributes, skills and experience have been, or appear to be, the greatest obstacle to setting up an internal audit function. Value A successful implementation of an internal audit function will contribute value to the organisation, deliver assurance, and stimulate best practice. This study includes a number of recommendations that could help the Archdiocese of Malta in setting up its internal audit department.