Internal Audit in the Statutory Bodies and Government-linked Companies of Malaysia: The Never Ending Saga!

Abstract

This paper is part of the third and final study conducted on the state of internal audit in the public sector of Malaysia. The first study was concerned with the internal audit operations in the state and local governments found in  Peninsular Malaysia (Azham et al 2007a), while the second study was concerned with internal audit in the nation’s federal government ministries, departments and agencies (Azham et al 2007b). This third study covers 47 organizations at the federal government level, comprising 27 statutory bodies and 20 government-linked companies. From the face-to-face interviews conducted with internal auditors over the three year period 2005 to 2007, several notable audit features emerged as common to all 47 organizations. Some are depressing, while a few others are encouraging. All in all, however, the internal audit function in a majority of the organizations still leaves much to be desired. Also, it is notable that these findings are very much like those of the previous two internal audit studies (Azham et al 2007a; 2007b), and to make sense of the dismal state of the internal audit function in the public organizations, there is perhaps a need to look at the bigger context within which the internal audit function is found.