Public Internal Audit is an independent appraisal function established within Government to examine and evaluate its activities as a service to Government. The Department may carry out internal audits in any Government Department or any entity falling under the supervision of Permanent Secretaries. The Internal Audit and Investigations Department (IAID), under the responsibility of the Director General Internal Audit and Investigations Department, is established and assigned responsibility for conduct of the Government Internal Audit and Financial Investigations Function.
The primary objective of Internal Audit is to assist Permanent Secretaries in the effective discharge of their duties (Chapter 461 of the Laws of Malta, Internal Audit and Financial Investigations Act, para 4). For the purpose of this Act, “internal audit” means an independent, objective assurance and consulting activity designed to add value and improve the operations of auditees, helping the auditee to accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. Internal Audit furnishes Permanent Secretaries with analyses, recommendations, counsel and information concerning activities reviewed and/or investigated.
One of the key roles of the Internal Audit Unit is to ensure that all Ministries adopt an appropriate framework of risk management and internal control. As specified in the Internal Standards for the Professional Practice of Internal Auditing Performance Standards 2110 Risk Management and 2120 Control, the roles of the Internal Audit Unit include evaluating:
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the risk exposures of the organisation’s governance, operations and information system and
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the effectiveness of controls encompassing the organisation’s operations, and information systems
As regard to:
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Reliability and integrity of financial and operational information.
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Effectiveness and efficiency of operations.
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Safeguarding of assets.
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Compliance with laws, regulations, and contracts.
Independence
The IAID is independent of the activities it audits to ensure objective judgment essential to its proper conduct and impartial advice to Government. No member of the IAID shall have authority over, or responsibility for, any of the activities reviewed. The involvement of the Department in developing or implementing departmental policies, systems and procedures shall be in an advisory capacity, in adherence to any past and/or present recommendations made by the IAID itself.
Organisation independence
IIA Attribute Standard 1110 requires that:
“The internal audit activity should be free from interference in determining the scope of internal auditing, performing work and communicating results.”
The Internal Audit & Investigations Department is functionally independent of the entities they audit, and reports to the Cabinet Office. A functionally independent Board has also been set up – referred to as the IAIB Board. The function of the IAIB is to regulate the public internal audit and financial investigations in Malta by laying down policies to be followed in the implementation of internal audit and financial investigations. The IAID is required to report directly to this Board. The Board is chaired by the Secretary to the Cabinet and is composed of very senior public managers and in order to ensure even wider objectivity includes an experienced member of the local accountancy profession.
Individual objectivity
The audit staff within the Division are bound by professional and complementary Codes of Ethics – (1) that of their own profession as accountants and auditors, (2) that which has been specifically drawn up for the public internal audit and investigative function itself – “Code of Fundamental Principles” and (3) the “Code of Ethics for Employees in the Public Sector”.
Legislation
The Internal Audit and Investigations Department is regulated by a legislation conferring rights and responsibilities to the Department.
Click on the following link to visit the Chapter 461: Internal Audit & Financial Investigations Act