The internal audit profession in Malta : a study

Abstract

Purpose: The main aim of this study is to determine which are the main characteristics of the Internal Audit profession and in doing this, the author gives a picture of the history, attributes of internal audit professionals, frameworks and standards that are used and also the element of training in Malta. Furthermore, this study aims to assess the perceptions on the Internal Audit profession as well as ascertaining future prospects of the profession. Design: Throughout this research 31 semi-structured interviews were conducted. Interviews were carried out with 13 internal auditors to capture their insight regarding the characteristics of the profession as well as their perspective regarding stakeholders’ perceptions and future prospects. Additionally, 7 audit committee members, 10 Chief Executive Officers and board members and the Malta Financial Services Authority as the regulator, were interviewed to capture their perceptions regarding the profession and its future prospects. Findings: The study shows that the Internal Audit profession as in other countries has developed from a policing role into a more advisory and assurance role. This was mainly due to fraud cases and changes in the marketplace. Today, internal auditors need to be well equipped with soft skills mainly communication skills, hence there should be more training and additionally the quality of such training need to be improved moving from the text-book approach. The findings also show that perceptions depend on backgrounds of stakeholders as well as size and nature of companies. Lastly, the findings illustrate that there are bright prospects for the profession and gives out a number of recommendations and also opportunities that this profession offers. Conclusions: According to the study’s participants the profession in Malta is highly dependent on the approach, previous experience and background of internal auditors and stakeholders towards internal audit. Therefore, interrelationships between these two groups is crucial for the profession to flourish and reach its recognition in Malta. Value: This study gives a better picture of the Internal Audit profession in Malta through attributes of internal auditors, perceptions and future prospects. Therefore, it can be used by internal auditors to improve their attitudes towards IA assignments which subsequently affect perceptions on the profession. Hence, this study would also be useful to management and higher levels in companies to improve their approach towards internal audit therefore, minimising misconceptions of internal audit. Additionally, this study contributes towards a more recognised and appreciated profession though a number of recommendations on a local level.