Fighting Corruption in the Public Sector by Implementation of Effective Internal Audit Function

Abstract

This research is focused on fighting corruption through effective internal audit in the public sector of Maldives. Corruption is a global challenge faced around the world, detrimental for the public sector institutes to efficiently deliver their obligations and safeguard public resources. Mitigating corrupt practices require establishment of good governance, transparency and accountability at all levels in public sector institutes. Internal audit is a control mechanism to infuse ethical values, good governance, strengthen internal control system and risk management processes, a fundamental feature in the fight against corruption. However, effective IAF remains deficient in the country. This study uses exploratory method to gain in-depth insight to reach a deeper understanding on the challenges and reasons for lack of effective IAF, role of IAF to mitigate public sector corruption, adequacy of existing internal control system, risk management processes and governance mechanism to provide recommendations to strengthen IAF and enhance transparency and accountability in the public sector. The study indicates weaknesses in the governance structure, inadequacy of controls and poor risk management strategies resulting in significant corruption in the public sector. Limitations in the regulatory framework, insufficient competent internal auditors, political and bureaucratic constraints are denoted as primary challenges to implement IAF in the country. Strengthening the role of IAF in the public sector requires regulatory reform to provide internal auditors an environment to perform their responsibilities with integrity and independence, competence building of internal auditors and establishing a good governance framework promoting transparency and accountability. The study provides a significant contribution to existing literature on the role of IAF in mitigating public sector corruption and challenges to implement effective IAF in the country. Further, the outcome of the study can be applied as a guide for policy makers and internal audit practitioners to enhance the effectiveness of the function and strengthen the role of IAF in mitigating public sector corruption in the Maldives.