The Institute of Internal Auditors (IIA) Malawi Chapter has faulted Ministry of Finance, Economic Planning and Development for failing to comply with internal audit standards in handling financial reports.
In an interview on the sidelines of the institutes’ 16th annual conference, IIA Malawi Chapter president Paul Nyirenda said Treasury has failed to adhere to one of the critical recommendations made by the institute in a bid to ensure good corporate governance.
He said the Office of the President and Cabinet (OPC) is supposed to be handling financial reports as the highest authority.
Said Nyirenda: “There is room for improvement, particulary in governance. One hallmark for effective internal audit is that it must be independent in its operations. Standards of internal audit demands that internal auditors should report to the highest authority in this case OPC but now they report to the Ministry of Finance.”
He said unless this is aligned, there will be little improvements in corporate governance.
Nyirenda urged the professional body to have an Internal Audit Act which he said would help the sector to be well regulated.
In his remarks, guest of honour at the event, Speaker of Parliament Richard Msowoya said running organisations efficiently in the current economic and political conditions called for greater attention to governance and risk management than ever before.
“Evaluating governance risks and structures in an organisation requires greater understanding on the part of the internal auditor of the governance process and principles which are contained in governance codes that set standard of good practices in relation to, among others, board leadership and effectiveness,” he said.
Internal audit consultant Simon Nyazenga emphasised on the need for independence of auditors function if the country is to reap from the IIA profession by way of enhancing corporate governance.
Section 84 (3) of the Public Finance Management Act requires controlling officers to submit reports before getting the next trench of funding.