The role of the Maltese internal auditor in operational auditing : an assessment

Abstract

Purpose: As the role of internal auditors is expanding, this study aims to explore what constitutes the role of the Maltese internal auditor in operational auditing. It also aims to determine the types and extent of the operational audits carried out, the approaches used and the significance given to such audits. Design: The objectives of this study were achieved though semi-structured interviews with fifteen CAEs from various organisations in Malta, representing the majority of those companies which fit within the scope of the study. Findings: This study reveals that locally operational auditing is growing in importance and that IAUs are aligning their objectives with those of the organisation. Considering the size and the limited resources of local IAUs, it is becoming increasingly challenging to cover all operations of their organisation. Furthermore, there are areas in which IAUs do not have the technical skills required to perform operational audits. Liaison with various parties within and outside the organisation is essential to perform operational audits effectively. The study also reveals that internal auditors have diverging opinions on whether they should help management in the implementation of recommendations and whether they should evaluate the effectiveness of these audits. - ii - Conclusions: The types of operational audits carried out in Malta tend to differ depending on the company's industry and objectives. Most operational audits in Malta are combined with financial and compliance audits and performance measurement criteria tend to be quite informal. Operational auditing is becoming increasingly accepted in those organisations which have an IAU. The internal auditor has to balance his role as a consultant with the required independence to perform Value: This study has outlined the general practices and issues surrounding operational audits in Maltese IAUs. It is hoped that IAUs can utilise this study and its recommendations to benchmark their current practices with a view to improve.