The Institute of Internal Auditors (IIA) Malawi Chapter has bemoaned the inadequate specifics on the internal audit function in the Public Audit Act of 2003.
IIA notes that the internal audit function is one of the four cornerstones of good corporate governance; hence, the need for an Internal Auditing Act.
IIA president Kingsley Mulewa last week announced that it is in the process of initiating the enactment of Internal Auditing Act to help improve the quality of internal audit services in Malawi.
He said once the bill is enacted into law, it will be mandatory for all practicing internal auditors in Malawi to be members if the IIA.
This, he said, will ensure that the institute monitors and helps in ensuring quality of internal auditing services.
“Currently, the Public Audit Act 2003 covers external audit and does not mention anything on internal audit. Similarly, the Public Finance Management Act 2003 has a single section on internal audit. This, in our view, limits the activities of the internal audit function, one of the four cornerstones of good corporate governance, others being management, the board and the external auditor,” said Mulewa.
He said the reasoning behind their lobbying is to ensure that internal audit is strengthened legislatively by highlighting duties of the director of internal audit, powers of the office, reporting arrangements, functions of the audit committee as well as offences and sanctions to mention a few.
Mulewa added that the institute proposes proper coverage on the internal audit function in government-owned organisations.
“If the above issues are addressed properly you will find that it will also have a positive effect on an internal auditor working in private organisations. The different mismanagements taking place in many organisations will significantly reduce because an internal auditor has been given a proper mandate to contribute in organisationsâ€™ attainment of planned objectives,” he said.
He could not be drawn to say when a bill could be ready but said IIA plans to initiate the process in 2012/2013 financial year.
“Usually, a process such as this one takes long if stakeholders do not understand and are not motivated by the issues to be addressed,” he said.