CHAPTER ONE
INTRODUCTION
1.1 Background To The Study
The Internal audits constitute an independent appraisal function which review the internal control system of the organization established. Auditing ensures the effective, proper, and economic use of resources in the organisation through the objective examination, evaluation and reporting on the adequacy of internal control. The effectiveness of the auditing functions lies on its independence; The independence in terms of organisational status and personal objectivity of the internal auditor facilitates the proper and effective performance of his duties .It is therefore essential that the internal audit unit be appropriately staffed with people with the right qualification and given the training necessary .The internal auditor must constructively align its functions with the management policy and maintain a good working relationship and mutual understanding with management, external auditors, and other review and exercise due care in executing its function of planning, controlling and recording of work. The internal control system must be properly evaluated to ensure its adequacy and effectiveness .The evidence obtained in the audit function should constitute the auditor’s report which must be communicated to the management for appropriate action. It is also the auditors role to ensure that all recommendations and conclusions are monitored to determine that action has been taken on them .The organisation terms of reference for the internal audit function should be clearly specified to enhance the auditors independence in the execution of his legitimate functions. A crucial function of internal auditing is to facilitate management in the creation of value for money. through economic, efficient and effective use of resources. Consequently the auditor must be objective in the presentation of its report to management So as to exercise judgement, express opinions and present recommendations with impartiality.
MALAYSIAN INSTITUTE OF ACCOUNTANT (2007) INTERNAL AUDIT GUIDELINES
1.2 Statement of the Problem
The effectiveness of the auditing functions lies on its independence; The independence in terms of organisational status and personal objectivity of the internal auditor facilitates the proper and effective performance of his duties .It is therefore essential that the internal audit unit be appropriately staffed with people with the right qualification and given the training necessary. But many instances reveal that the internal auditor is not given the freedom and independence to exercise his functions objectively.
Unnecessary influences by some senior staff who are part of management some time digress the sense of objectivity of the internal auditor in presenting is report and recommendations to management
This as a result affects the objective of audit and that off the organisation in ensuring effective and economic use of the firm’s resources. Therefore the problem confronting the research is to determine Auditors independence; Enhancing Accountability and transparency in corporate organisations.