The internal audit planning process in selected Maltese companies : an evaluation

Abstract

The fact that most managers plan in some way or another provides enough evidence of its importance. Internal audit, as a function, is highly dynamic and constantly developing. Therefore, planning is becoming an even more important aspect. Planning, or rather, the appropriate level of planning, is crucial to the success of the internal audit function in this time of rapid change. Right from the setting up of an internal audit function to the carrying out of an individual audit, planning needs to be carried out. The aim of this dissertation is to analyse the internal audit planning process in Maltese organisations with an internal audit function. The research questions tackled by the study relate to: - How, and the extent to which, planning is being carried out in these organisations; - The performance measurement that is being carried out in respect of such planning; - How important the overall planning process is in such organisations. In order to answer these questions, this study focuses on Maltese companies that have an internal audit function, whether internally set up, outsourced or co-sourced. The study is carried out through ten interviews with managers each responsible for an internal audit department. The study extended over a period of ten months and was divided into selection of the area of study, devising of a plan, literature review, data collection, analysis and presentation of :findings, conclusions and recommendations. Findings showed that, in the local context, planning within the IADs is being appropriately carried out, although some areas do cause some concern. Most confusion and discrepancies were identified in the areas of organisational planning and risk management and assessment. In addition, it was revealed that the importance of planning, in all contexts, as well as in the case of an internal audit function, is known and accepted by all, however, this is generally not being completely reflected within the way they effect their planning. The study, therefore, recommends the establishment of a local institute of internal auditors, the use of global best practices as a benchmark for the planning process, outsourcing, co-sourcing and the use of expert advice within local IADs, the development and implementation of a risk management system and the wider use of a control self-assessment approach.