INTRODUCTION

There is general awareness all over the world for the need to pay greater attention to the
improvement of public sector management. The reason is obvious, government constitutes
the largest single business entity and her pattern of expenditure through its various
parastatals, agencies and commissions stimulate lot of economic activities. As a result of
these Government huge involvements in economic activities, initiatives are being taken all
over the world towards improvement of the standards of accounting and auditing
departments in government (Angus and Mohammed, 2011). Public sector managers
operate in a complex and challenging environment. This, in part, reflects the evolving
demands and expectations of the community, government and the Parliament.
Internal audit is an important element of the range of resources and mechanisms available
to public sector managers to assist them to meet their responsibilities within this
environment. Anao (2012). Internal audit provides an independent and objective review
and advisory service to-provide assurance to the Chief Executive and/or Board that the
entitys financial and operational controls designed to manage the organizations risks and
achieve the entitys objectives are operating in an efficient, effective, economical and
ethical manner; and assist management in improving the entitys business performance.
According to Izedonmi (2000), Auditing involves an independent examination of the
financial statements of an enterprise prepared by the management of that enterprise by an
appointed person called auditor in order to express a professional opinion whether or not
those financial statements show a true and fair view position of the enterprise as at the end
of the financial period in accordance with the auditor terms of engagement as well as other
relevant statutory and professional regulations. As owners of organization are separated
from the management, this has necessitated the need for auditing. It used to be that internal
auditing in the public sector served as a simple administrative procedure comprised mainly
of checking accuracy of transactions, pre-payment verification and control, counting assets
and reporting on past events to various types of management. But in recent times, a
combination of forces has led to a quiet revolution in the profession.
Governments moving toward higher levels of transparency must demonstrate
accountability in the use of public money and efficiency in the delivery of services. Larger
and more complex operations demand greater competency and professionalism from
internal auditors to minimize and manage risk. Internal audit is one of a number of internal
assurance and business review activities that should operate in a coordinated and

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complementary manner to the benefit of the organization.
These other activities include management monitoring, evaluations, quality assurance and
control self-assessment arrangements that are all designed to provide confidence and
assurance to Chief Executives and/or Boards that management is meeting its
responsibilities and the entity is achieving its objectives, Anao (2012). Auditing is an
expensive proposition, however auditing help in reduction of information risk which is the
risk that information upon which a business is based is accurate. Establishing a
professional working relationship between internal audit and the external auditor should
deliver benefits to both parties. It is important that internal audit seek input from the
external auditor in developing the internal audit strategy and internal audit work plan.
Internal and external audit consult with each other during the planning phase of individual
audits that address the key financial and business systems underpinning the entitys
financial statements. In order for the external auditor to use specific work of the internal
auditor, the external auditor is required to evaluate the work of internal audit to determine
its adequacy for external audit purposes. Internal audit ensures effectiveness and the extent
to which an internal audit staff meets its obligation, is arguably a result of the interplay
among some factors: internal audit quality, management support; and organization setting.
Therefore, internal audit should be viewed as a dynamic process that is continuously
shaped by the interactions among the factors mentioned above.

LITERATURE REVIEW
Jenny Goodwin (2004) in his paper explores similarities and differences between public
sector internal auditing and its counterpart in the private sector. Features examined include
organizational status, outsourcing, using internal audit as a tour of duty function, activities
and relationships with the external auditor. The study is based on a survey of chief internal
auditors in organizations in Australia and New Zealand. Results suggest that there are
differences in status between internal audit in the two sectors, with public sector internal
auditors less likely to report to the chief financial officer. While a similar amount of work is
outsourced, public sector organizations are more likely than those in the private sector to
outsource to the external auditor.
Aderajew Wondim Yismaw, (2007) in his paper mainly targeted purpose to identify factors
impacting the effectiveness of internal audit services. Based upon a case study of a large
public sector higher educational institution in Ethiopia, the paper examines how internal
audit quality, management support, organizational setting, auditee attributes, and the

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interplay among these factors, influence internal audit effectiveness. The findings of the
study highlight that internal audit effectiveness is strongly influenced by internal audit
quality and management support, whereas organizational setting and auditee attributes do
not have a strong impact on audit effectiveness.

Vijayakumar, A. N (2012) in his thesis reflected that Public-sector enterprises are generally
concerned with the delivery of service or beneficial outcome to the public at large with a
social interest rather than commercial motive of profit maximization. However, in the
process of achieving desired objectives, they have to face all kinds of risks which may be
internal or external. The success, therefore, is depending on how far a public enterprise is
able to foresee and mange risks. Amongst the several control tools of risk management,
internal audit is primarily used as an effective tool to manage operational, financial, legal
and regulatory risks. Further, internal audit also facilitates in formulating strategic policies
to achieve enterprise goals. This study made an attempt to through a light on the
effectiveness of internal audit practices on risk management at the public-sector enterprises.

Frank H.M. Verbeeten, (2008) in his thesis investigated whether performance management
practices affect performance in public sector organizations. The research shows that the
definition of clear and measurable goals is positively associated with quantity performance
as well as quality performance. In addition, the use of incentives is positively associated
with quantity performance yet not related to quality performance. Finally, the effects of
performance management practices in public sector organizations are affected by
institutional factors. All limitations of survey research apply. The survey is based on public
sector organizations in The Netherlands; findings may not be transferable to other countries.

STATEMENT OF THE PROBLEM

This study, the role of internal audit in effective management control in public sector has
been conducted in developed countries and it has shown a significant relationship between
Internal Audit and public sector management. This have necessitated this study to find out
the role of internal audit in effective management control in public sector. The statement of
the problem arises from question such as:
1. Can effective management control be achieved in local government?
2. What is the role of Internal Audit in achieving effective management control in local
government?
3. How does Internal Audit affect management control in local government?

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OBJECTIVE OF THE STUDY
The main objective of the study is to examine the role of internal audit in effective
management control in public sector. Specific objectives are to:
1. To find out if effective management control can be achieved in local government.
2. To find out the role of Internal Audit in achieving effective management control in local
government.
3. To find out how Internal Audit affect management control in local government.

RESEARCH METHODOLOGY
The research design employed in this work is the survey design, the population under
consideration consist of public sector in Chittoor and Vellore Municipal Corporations
which is quite large, hence the use of a sample, the primary source of data is been used
with the aid of a questionnaire which is divided into two section consisting of ten questions
the closed ended question were asked, comprising of five responses. A total of 54
respondents were collected and analyzed to derive conclusions.

DATA PRESENTATION AND ANALYSIS

Table 1 Demographic distribution of respondents
Respondent Number Percentage (absolute) Percentage (relative)
Director 2 3.70 0.037
Auditor 24 44.44 0.444
Accountant 13 24.07 0.240
Other 5 9.26 0.0925
Total 54 100 1.000
From table 1 it is understood that majority of our respondents are auditors, followed by
Accountants for accurate deprival of results.
Table 2. Age Distribution of Respondents
Category Number of Respondents Percentage(absolute) Percentage(relative)
Below 20 2 3.70 0.0370
21-30 25 46.30 0.4630
31-40 16 29.63 0.2963
41-50 8 14.81 0.1481
51-60 3 5.56 0.0556
Above 60 - - -
Total 54 100 1.0000
From this table 2 it is understood that major target of our research were the young auditors
and accountants it literally derives the results in present scenario.

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 Table 3. Sex Distribution of Respondents
Category Respondents %(Absolute) %(Relative)
Male 26 48.15 0.4815
Female 28 51.85 0.5185
Total 54 100 1.0000
From this table 3 it is understood that Male and Female respondents are more or less
equal.
Table 4. Educational Qualification of Respondents
Category Number of Respondents % (absolute) % (relative)
MSC 3 5.55 0.055
BSC/HND 37 68.52 0.6852
OND/NCE 10 18.52 0.1852
PRIMARY SCH.LEV.
CERTIFICATE 4 7.41 0.0741
Total 54 100 1.0000
From this table 4 it is understood that all the respondents for their respected designations
are highly educated.

Chart 1. The Organization allows Internal Audit employees to participate in training

and development programs in order to maintain their skills and keep up to date in
the field

Encouragement of Internal Audit employees

undesired 9

disagreed 4

strongly disagreed 5

agreed 15

strongly agreed 21

0 5 10 15 20 25

From Chart 1 we can infer that majority of the public-sector organizations has positive
approach in allowing Internal Audit employees to participate in training and development
programs in order to maintain their skills and keep up to date in the field.

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Chart 2. Internal Audit employees have the appropriate and relevant education in
auditing that allows them to audit all of the organizations systems (financial,
operational, logistical and computerized)

Internal Audit Employees Involvement

30

25

20

15

10

0
No of samples
strongly agreed agreed strongly disagreed
disagreed undesired

From Chart 2 we can infer that Internal Audit Employees have access to most of the
organizational systems and have appropriate knowledge in respective fields that allows
them to assist during audit process.

Chart 3. Top management does not provide Internal Audit with the support they
expect to have

Support from top management

7%
19%
9%

30% 35%

strongly agreed agreed strongly disagreed

disagreed undesired

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In Chart 3. The survey clearly depicts that the Internal Audit majorly doesnt attain what
they expect from the management. But in the organizations with effective top level
management a certain number of firms encourage and cooperate with the Internal Audit.

Chart 4. Internal Audit does not play any role in effective management Control In
the public sector

Internal Audit and Effective Management

strongly agreed; 1; 2%
strongly agreed
undesired; 11; 20%agreed; 7; 13%
agreed
strongly disagreed
disagreed
strongly disagreed; 19; 35% undesired
disagreed; 16; 30%

From Chart 4 we can clearly understand there is mixed opinions among the delegates
regarding Internal Audit and the effective management. The Survey shows 30%-35%
majorly disagreed followed by 27% agreement regarding the issue.

Chart 5. Internal Audit effectiveness does not effect management control in Public
sector

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 Internal Audit Effectiveness Affect on Management

16
14

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strongly agreed agreed strongly disagreed disagreed undesired

From Chart 5 we can infer how important Internal Audit is in the Effective Management of
the Organization. Major respondents disagreed with the view of no relation between the
Internal Audit and the Effective Management.

Chart 6. Terminating the work of the Internal Audit requires the approval of the
Internal Audit committee, and/or the board of directors, and/or the Civil Service
Commission

From Chart 6 we can infer that the respondents dont want to answer the respective
question in majority followed by few who expressed that Board of Directors and Civil
Service Commission approval is required for termination of Internal Audit.

CONCLUSION AND RECOMMENDATIONS

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This study investigated the role of internal audit in effective management control in public
sector organization, the findings of the study reveal that effective management can be
achieve in local government and Internal Audit effectiveness does play a role in ensuring
effective management in public sector, while Internal Audit effectiveness does not affect
management control in public sector.
Since effective management control can be achieved, and Internal Audit play key role in
ensuring effective management in public sector, there is the need for todays auditors to
acquire the requisite technique and skills in computer operations and electronic data
processing in order to carry out their work effectively to continually support Internal Audit
effectiveness. And management should put in place a conducive environment for internal
auditor to perform their duty because of the impact, which it has on Internal Audit
effectiveness. Therefore, training personnel as well as other training infrastructure
becomes an important ingredient in the successful operation of internal audit effectiveness
in public sector organizations. Heads of internal audit unit should be in attendance at top
management meetings to be aware of policies affecting organizational objectives.

REFERENCES
Dittenhofer, Mort. "Internal auditing effectiveness: an expansion of present methods."
Managerial Auditing Journal 16.8 (2001): 443-450.
Enofe, A. O., et al. "The Role of Internal Audit in Effective Management in Public
Sector." management 4.6 (2013).
Getie Mihret, Dessalegn, and Aderajew Wondim Yismaw. "Internal audit
effectiveness: an Ethiopian public sector case study." Managerial Auditing Journal
22.5 (2007): 470-484.
Goodwin-Stewart, Jenny, and Pamela Kent. "The use of internal audit by Australian
companies." Managerial Auditing Journal 21.1 (2006): 81-101.
Nagy, Albert L., and William J. Cenker. "An assessment of the newly defined internal
audit function." Managerial Auditing Journal 17.3 (2002): 130-137.
Spraakman, Gary. "Transaction cost economics: a theory for internal audit?."
Managerial auditing journal 12.7 (1997): 323-330.
Stern, Gary M. "15 ways internal auditing departments are adding value." Internal
auditor 51.2 (1994): 30-34.

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 Van Gansberghe, Cecilia Nordin. "Internal auditing in the public sector: a consultative
forum in Nairobi, Kenya, shores up best practices for government audit professionals
in developing nations." Internal Auditor 62.4 (2005): 69-74.
Verbeeten, Frank HM. "Performance management practices in public sector
organizations: Impact on performance." Accounting, Auditing & Accountability
Journal 21.3 (2008): 427-454.
Vijayakumar, A. N., and N. Nagaraja. "Internal Control Systems: Effectiveness of
Internal Audit in Risk Management at Public Sector Enterprises." BVIMR
Management Edge 5.1 (2012).
Xiangdong, Wang. "Development trends and future prospects of internal audit."
Managerial Auditing Journal 12.4/5 (1997): 200-204.
Appendix I
Questionnaire
Section A

Instruction: Tick as Appropriate

1. What group of employees do you belong to? Director [ ] (b) Accountant [ ]

(c) Auditor [ ] (d) Others
2. For how long have you been holding the position? below 2 [ ] (b) below 5 [ ]
(c) Below 10 [ ] (d) others
3. Sex? Male [ ], Female [ ]
4. Age: 18-25 [ ], 26-33 [ ], 31-41 [], 42-49[ ], 50 and above [ ]
Note:
SA strongly agreed
A -agreed
SD strongly disagreed
D-disagreed
UN-undesired
Section B SA A SD D UN
1. The organization allows IA employees to participate
in training and development programs in order to
their skills and keep up to date in the field; ( ) ( ) ( ) ( ) ( )
2.maintain
Internal Audit employees have the appropriate and
education in auditing that allows them to audit all
of the organizations systems (financial, operational,

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logistical and computerized) ( ) ( ) ( ) ( ) ( )
3. Top management does not provide Internal Audit with
the support they expect to have; ( ) ( ) ( ) ( ) ( )
4. Internal Audit does not play any role in effective
Control In the public sector () ( ) ( ) ( ) ( )
5.Internal Audit effectiveness does not affect
Public sector ( ) () ( ) ( ) ( )
6. Terminating the work of the IA requires the approval
the IA committee, and/or the board of directors,
Civil Service Commission; ( ) ( ) ( ) ( ) ( )

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