Functions and Roles of Internal Audit in Public Sector Risk Management: A Study on Gambia

This research aims to identify the functions and roles of internal audit in risk management within public sector organisations in Gambia. It will also examine the benefits and challenges of internal auditing for public sector organisations. The study will provide insights into the internal audit process of the public sector and identify key areas required for proper functioning. The research will also help the government and other stakeholders to minimize risks involved in internal audit.

Business Research Method
1.3. Relevant experience:
My job as an assistant internal auditor is to assist the Senior internal Auditor in the National
Assembly to evaluate the adequacy and effectiveness of control in responding to risks within
the organization’s governance, operations and information system regarding the reliability
and integrity of financial and operational information, efficiency and effectiveness of
operations and programmes safe guarding of assets and compliance with laws regulations
policies, procedures and contracts by pre auditing of payments of the National Assembly and
other activities captured in our annual risk base plan since January 2018 to Date.

Internal Audit Functions in the
Public Sector Risk Management

Table of Contents
Introduction.........................................................................................................................................4
Literature review.................................................................................................................................7
Explain the function and role that is being played to minimize risk by doing internal audit in the
Gambia..............................................................................................................................................7
Research methodology......................................................................................................................12
Conclusion..........................................................................................................................................16
References..........................................................................................................................................17

Introduction
Internal audit is a business process that is used by the organization to increase its
efficiency or to add value. It is an activity of assurance and consulting. This activity helps the
organisation to achieve its goal. Internal audit is a systematic approach that helps in risk
management by improving the effectiveness. This is used by the organisation so that a proper
account can be maintained by the business and the upper body and the government uses this
to make adecision. Public sector businesses are those organisations which is controlled and
run by the national, state or any local legal body of the country. In this sector the major
shareholder of the enterprise is the government body (Kagermann, Kinney and Küting, 2021).
In recent years, the Government of the Gambia has made significant progress in
strengthening fiscal discipline and improving the efficiency of its Public Financial
Management System (PFM). The Government has strengthened the legislative base,
increased the transparency of budget information, improved control over expenditures, and
strengthened budget oversight. At the heart of these initiatives was the establishment of the
Internal Audit Directorate through an Act of Parliament the (Public Financial Act 2014) and
its accompanying Financial Regulations 2016.
Background of the research problem:
Many organisations are hastily presumptuous about the complexity that are arising
while maintaining and managing the internal audit function. Here a wide range of control is
required so that the goals can be achieved effectively.Even with the existence of internal
audit in the public sector, it is still found that the rate of frauds is still rising.In the views of
some they are thinking that internalaudit is creating more problem and making the accounting
complex rather than solving the issues(Alaraji, 2020). The problem that arises in internal
audit of public sector are lack of management responses to internal audit findings, lack of
assigning the proper duties and responsibilities to the auditors, inadequacy in maintaining the
routine audits, lack of internal audit control within the public sector. These are some of the
reasons that are affecting the effectiveness of the audit internally in public sector. So, this
motivated the researcher to undertake a study on this topic so that views can be given to solve
those challenges.

Justify the reason
The objective to choose this topic is that it will help in outlining the task that will
make it possible to achieve the purpose of the researchproblem. Risk management is the
process which is used by the public sector organisation to identify, analyse the risk and
threatmet within public sector. There are so many risks that occurs while preparing the
internal audit. This concept helps the public sector enterprise to maintain a balance, so that
preventive measures can be taken. This helps the organisation to achieve the objective and
aids the managerial decision (Bananuka and et. al, 2018).
Value of the research:
This research will help in gaining a proper insight about the internal audit process of
the public sector. This will also help in identifying the key areas which are required for a
proper functioning. This research will also help the government to know what measures that
they will take so that they can minimize those risk which are involved in the internal audit.
They will also help the different stakeholders like local councils, public officials, vote
controllers of government etc. so that proper skills and knowledge can be gained. Public
sector organisation can also get benefit because it will help them in saving their time and
money as they will get to know the solution of the problems that are arising while preparing
the internal audit. This research will also help in gaining the confidence that are developing a
broader way of seeing the things(Ghaleb, Kamardin and Al-Qadasi, 2020).
Research aims and objective:
Research Aim: To identify the functions or roles of internal audit in risk management: A
study on public sector organisations
Research Objectives:
 To identify the concept of internal audit in context with public sector
 To determine the role of internal audit in risk management within public sector
 To examine the benefits of internal auditing for public sector organisation in the
Gambia
 To evaluate the challenges confronted by public sector organisation due to poor
internal audit process

 To identify the ways that would be used by public sector organisations in overcoming
the challenges associated with poor internal audit.
Research Question:
What are the functions and roles of internal auditin public sector risk management for
Gambia?

Literature review
Literature review is used to see the overview of the past study of the topic internal
audit and risk management. Literature review contains the past published report of the given
topic that is done by many investigators. There are so many secondary sources to study
literature reviews these are books, journal, magazine, articles, online sources, websites etc.
These sources are being detailed in the study so that more understanding and knowledge can
be gained about the problem.
Explain the function and role that is being played to minimize risk by doing internal audit in
the Gambia
According toListon-Heyes and Juillet (2019), Auditing is the process which is done
by the auditors of the organisation so that they can verify the financial statement made by the
accountant. This is on –site verification process that ensure compliance of the requirements.
This is done so that a financial data can be fair and accurate. Audit is done so that a clear
picture can be viewed by the shareholders, government, customer, supplier and partners.
There are two types of auditors: internal and external. An internal auditor is a part of the
business that is responsible for the analysis of the financial data and reviews it. The external
auditor is different from internal audit in each and every way of doing work. The person is a
third party who do audit for the firm.
Auditing is classified in four ways and that are private, statutory, internal and
management audit. Private audit is done because the shareholder of the companies wants it
but statutory audit is carried out because the law wants it to be done. Internal audit is made by
the employee of the company and the management audit is done to check the effectiveness of
management in the organisation(Oladejo and Nwachukwu, 2021).
Internal Auditing is an independent, objective assurance and consulting activity designed to
add value and improve an organisation’s operations. It helps an organisation accomplish its
objectives by bringing a systematic, disciplined approach to evaluate and improve the
effectiveness of risk management, control and governance processes. (IIA IPPF).

INTERNAL AUDIT is an independent process which many organisations see as a tool for
ensuring the working of internal system. This is done within the company so that evaluation
offinancial activities can be made. Some of the employee of the business is responsible to
perform the auditing.This activity isperformed by the audit department and the employee
whose function is known as internal auditor (García-Meca, Ramón-Llorens and Martínez-
Ferrero, 2021). Internal audit is performed by the company to reduce the risks that are being
identified andanalysed while making the auditing. There are so many roles of internal audit in
risk management within public sector:
 The internal auditor is responsible to the account officer for providing a
comprehensive report of an audit of all the activities and operations. He is directly
responsible for monitoring the financial statement so that goals can be achieved
effectively and efficiently.
 They are the one who analyse the fraud and misleads so that they can safeguard the
interest of the organisation. Normal safeguard means observing the government
activities and laws so that internal checks can be made(Kahyaoglu and Caliyurt,
2018).
 They also control that the revenue is being collected and the money received or paid
are being placed under the correct accounts or sub heads.
 The major responsibility that are being played by then is to see that all the issues
made by the government in the company is stored correctly and issued by the right
person.
 The issue which are made is also being used for the purpose for which they are
authorized by the government in the public sector.
The internal auditor of the public sector also plays the role in which they keep an eye on the
system of control of expenditure where they see that all the payment are made to the right and
authorised person (ALBAWWAT, AL-HAJAIA and AL FRIJAT, 2021).
 Internal auditor plays the role where they properly evaluate the accounting records
and see that if they are accurate and fair. No untraded practice has been made or any
corruption is not involved (Mustafa and Al-Nimer, 2018).

Gambia is a country in western Africa which financial condition is not as better as other
countries so here internal audit plays an important role in decreasing the risk for the public
sector enterprise. So here internal audits beneficial so that they can protect their financial
performance. If Gambia public sector adopts the strategy of internal audit, then they can
strongly control their internal finance. Internal audits evaluate the activities and action and
ensure the public sector enterprise to design and implement the auditing in effective manner.
If the public sector enterprise uses their internal auditors, then they can spot the redundancies
that arise in the business practices and on governance procedure (Calvin, 2021). With the
help of these they can save their time and money and come up with better decision for their
organisation. Gambia does not have advanced technology by which they can save their data
from being leak, so with the help of internal auditor they can scrutinize their information and
provide cyber security. This would also help them by examining that the policies which are
made by the government are secured and are efficiently in acquisition of the goal. Internal
audit also helps in identifying the risk that are involved in the organisation and provide helps
so that they can mitigate the risk and work on it to resolve the problems. Internal auditors of
the public sector also help in analysing the financial statement and verify whether they are
accurate and are integrated with each other or not.Internal audits check the laws, regulations,
and industry standards with which your organization needs to comply and determine whether
you are working according to it or not(Newman and Comfort, 2018).
The Government needs to carry out key fundamental roles to achieve economic
transformation andone of which is good governance and strong internal controls. The
accelerating needs for changes of Internal Audit services in public sector are substantial and
must be coordinated by the directorate of Internal Audit in line with international auditing
standards and best practices. The underlying caveat is that individuals singularly or
collectively do not engage in corruption or mismanagement of public funds without
depending on the weaknesses in the systems. Proper governance cannot depend on how
ethical public servants and effective judicial systems are. Thus, the only veritable way of
mitigating mismanagement of public funds is to ensure management adhere to policies,
procedures and internal controls in place within the public sector (Fatah, Hamad and Qader,
2021).

The Internal Audit regulations establishing internal audit units in MDAs are undergoing
review to capture lessons learnt and incorporate best practices. An organizational review has
proposed changes to internal audit structures and numbers, and Internal Auditors in MDAs
requires enhanced skills development to provide specialized services e.g., consulting services
over internal controls, risk management and public /corporate governance processes, IT,
value for money, review of financial information, system audits and forensic investigations
and scope coverage.
The rolling over of internal audit functions has begun in January 2016. The Internal Audit
Directorate (IAD) in collaboration with the personnel management unit (PMO) and various
Permanent Secretaries has created internal audit units and posted internal auditors at the
following Ministries: Ministry of Health, Ministry of Agriculture, Judiciary, Ministry of
Basic Secondary Education, Ministry of Interior, Office of the President Ministry of Finance
and Economic Affairs, Ministry of Works Transport and Information and the National
Assembly. Although, efforts have been made to recruit qualified personnel in the area of
accounting, economics and other related fields, skills in internal auditing are relatively low.
A high numberof junior auditorsarerecruitedfresh from university. This is because internal
auditing is still new in the Gambia and people with internal audit qualifications are low.
In the Gambia public sector, the internal audit department also faces some challenges
while doing the auditing of their financial data. The problems make it difficult for the
auditor to carry out the auditing in smooth manner. Some of the issues also arrive from
the staff who are not part of internal audit.This research alsowill help to find the
challenges that are arising in Gambia. Some of the challenges that they are facing are:
 Lack of accounting system: Some of the audit findingsof public sector enterprise
of the Gambia have shown that the country has unavailability of adequate
accounting system which create problems to the auditor as sometimes it is difficult
for them to categorise the audit according to the current rules and policies.
 Non recognition of audit department: the internal audit department of the public
sector feels frustrated and unwanted as the employee or other members does not
recognise them as unit and give no importance. So due to this factor they work
poorly and without willingly and prepare a proper audit(Mubako, 2019).

 Lack of proper information: As the public sector of Gambia is not as
professional as other countries so sometime, they do not register the payment or
expenses that are being paid or received and submit it to internal audit without any
recording. This creates problem to the audit team as their accounts does not match
and cannot be able to give clear auditing.
 Inadequate observation: some of the internal auditor neglect their roles and
duties that are assigned to them. So, they are not able to observe the accounts and
made mistake which lead to create an unfair auditing.
As Gambia public sector organisation faces the above challenges so to overcome these
challenges they must adopt those strategies which are beneficial and also help them in
maintaining the proper internal audits. So,there are some of the ways through which they can
cope up with the problems. They can develop or design a proper reporting structure before
finalising the auditing. If they can design a seamless structure, then the level of
communication and transparency will be effective and the chances of omission of error will
be decreased. They should shake their hands with the external auditors (Tamimi, 2021). With
the collaboration of both the internal and external auditing, the risk would be mitigated as
they will work for solving the gaps and provide the work accordingly. If a healthy
relationship will be established between the auditor’s community, this will boost their work
performance and will work according to the IA function. This will also help them in cutting
the costs. The internal auditor also adopts the scope of providing quality rather thanquantity
as this will provide better opportunity to the mangers to take proper decision(Lois, and et.
al ,2020).

Research methodology
Research methodology is the process which is used to identify, analyse, collect and
interpret the information of the study of internal audit functions in the public sector risk
management. Quantitative and Qualitative are the two type of research methodology. In the
present research topic Quantitative methodology will be selected because the data that will be
collected is in the form of numbers or numeric (Snyder, 2019).
Research philosophy: It is a set of belief regarding the way within which information
about a topic or subject should be collected. There are three types of research philosophy that
is Ontology, Epistemology, Axiology. Iwill select Epistemology philosophy.In this
positivism will be chosen so that quantitative data in the form of primary source can be
gathered.
Research approach: This is the procedure followed for evaluating gathered
information through the of use of effective approach. There are two types of research
approaches such as inductive and deductive. In the near future if data will be gathered then
Deductive approachwill be chosen. This is the essential approach that assists in analysing
numerical information about the topic(Hansmeier, Schiller and Rogge, 2021).
Research strategy: This is that part of onion framework which is used in assisting to
collect the accurate information regarding the different research approach. There are so many
types of strategy that is used to gather information these are survey, case study, action
research, observation and many more. In the current research topic,I will choose survey
strategy to collect data as this will help in gathering appropriate number of samples.
Research choice: it is used to choose the methodology to be adopted to gather the
quantitative and qualitative data. Mono method, Mixed method and Multi-mixed method are
the three-choice available to the investigator to choose among them. In the current scenario
Mono method will be chosen to collect data. This will be selected as only one methodology is
to be selected out of two and in this whole report only single data that is numeric data is to be
collected for further analysis(Iovino and Tsitsianis, 2020).

Research design:This is used to know the impact that will be made after the data is
being collected and evaluated. The research design has three types that are experimental,
descriptive and exploratory. In the present research report Descriptive design will be selected.
This type of research design is significant in gathering, analysing and using numerical
information regarding any subject or topic.
Data collection: it is that technique which helps in collecting the appropriate piece of
information which is useful in obtaining the aims and objectives. Data collection is divided
into two parts that are: primary and secondary data collection. In this topic the data that will
be collected is in primary source. This is selected by me because I want to gather the
firsthand data for their experiment.
Time horizon: it is that part which is used to know the exact time that will be needed to
complete the research. Cross-sectional and longitudinal time horizon is the two types. In this
report cross-sectional time horizon is being chosen to so that research can be completed in
shorter time period(Davidavičienė, 2018).
Data Analysis:Data analysis is a part of the research methodology that helps in
analysing the information in systematic way. The data analysis is divided into two parts:
frequency distribution analysis and thematic analysis. Investigator has selected the frequency
distribution analysis to evaluate the numerical information in effective and efficient manner.
This method helps in evaluating and analysing the reliability and validity of the gathered
numerical piece of information.

Conclusion
From the above research proposal, it is being concluded that internal audit is important to
minimise the risk that is involved in the public sector by the government rules and regulation.
It is also concluded that a proper auditing helps the organisation to achieve the goals and
make proper decision by seeing the audit report that have been made by the internal auditors
within the organisation.Internal audit will only fully achieve its objectives if the weaknesses
identified are addressed and risk becomes effectively managed. (ACCA website, brief guide
to internal audit).

References
Books and journal
Alaraji, F.A.A.S., 2020. Corporate Governance and its Impact on the quality of internal
audit. Calitatea. 21(175). pp.85-90.
Bananuka and et. al, 2018. Internal audit function, audit committee effectiveness and
accountability in the Ugandan statutory corporations. Journal of Financial Reporting and
Accounting.
Davidavičienė, V., 2018. Research Methodology: An Introduction. In Modernizing the
Academic Teaching and Research Environment (pp. 1-23). Springer, Cham.
Ghaleb, B.A.A., Kamardin, H. and Al-Qadasi, A.A., 2020. Internal audit function and real
earnings management practices in an emerging market. Meditari Accountancy Research.
Hansmeier, H., Schiller, K. and Rogge, K.S., 2021. Towards methodological diversity in
sustainability transitions research? Comparing recent developments (2016-2019) with the
past (before 2016). Environmental Innovation and Societal Transitions. 38. pp.169-174.
Iovino, F. and Tsitsianis, N., 2020. The Methodology of the Research. In Changes in
European Energy Markets. Emerald Publishing Limited.
Kahyaoglu, S.B. and Caliyurt, K., 2018. Cyber security assurance process from the
internal audit perspective. Managerial Auditing Journal.
Liston-Heyes, C. and Juillet, L., 2019. Employee isolation and support for change in the
public sector: a study of the internal audit profession. Public Management Review. 21(3).
pp.423-445.
Lois, P., Drogalas, G., Karagiorgos, A. and Tsikalakis, K., 2020. Internal audits in the
digital era: opportunities risks and challenges. EuroMed Journal of Business.
Mubako, G., 2019. Internal audit outsourcing: A literature synthesis and future
directions. Australian Accounting Review. 29(3). pp.532-545.
Mustafa, F.M. and Al-Nimer, M.B., 2018. The association between enterprise risk
management and corporate governance quality: The mediating role of internal audit
performance. J. Advanced Res. L. & Econ.. 9. p.1387.
Newman, W. and Comfort, M., 2018. Investigating the value creation of internal audit
and its impact on company performance. Academy of Entrepreneurship Journal. 24(3).
pp.1-21.
Oladejo, A. and Nwachukwu, C., 2021. Assessing internal audit function and public
sector performance in Nigeria. International Journal of Economics and
Accounting. 10(1). pp.97-111.
Snyder, H., 2019. Literature review as a research methodology: An overview and
guidelines. Journal of business research.104. pp.333-339.

Kagermann, H., Kinney, W. and Küting, K., 2021. Internal Audit Handbook Management
with the SAP®-Audit Roadmap. Springer.
García-Meca, E., Ramón-Llorens, M.C. and Martínez-Ferrero, J., 2021. Are narcissistic
CEOs more tax aggressive? The moderating role of internal audit committees. Journal of
Business Research, 129, pp.223-235.
ALBAWWAT, I.E., AL-HAJAIA, M.E. and AL FRIJAT, Y.S., 2021. The Relationship
Between Internal Auditors' Personality Traits, Internal Audit Effectiveness, and Financial
Reporting Quality: Empirical Evidence from Jordan. The Journal of Asian Finance,
Economics and Business, 8(4), pp.797-808.
Fatah, N.A., Hamad, H.A. and Qader, K.S., 2021. The Role of Internal Audit on Financial
Performance Under IIA Standards: A Survey Study of Selected Iraqi Banks. QALAAI
ZANIST SCIENTIFIC JOURNAL, 6(2), pp.1028-1048.
Tamimi, O., 2021. The Role of Internal Audit in Risk Management from the Perspective
of Risk Managers in the Banking Sector. Australasian Accounting, Business and Finance
Journal, 15(2), pp.114-129.
Calvin, C.G., 2021. Adherence to the Internal Audit Core Principles and Threats to
Internal Audit Function Effectiveness. AUDITING: A Journal of Practice & Theory.