The value-added internal audit in public administration in Latvia

The quality of internal audit and the added value of internal audit are unanswered questions in many public institutions in Latvia and around the world. This research was aimed at determining the evaluation approach of internal audit in the public sector of Latvia and developing a list of added value or benefits of the internal audit in a local government. The monographic method and the survey method, an expert survey, were used in the paper. The author has developed a valuation approach of internal audit in local governments. The author offers applying the approach developed when carrying out external evaluations to the commission of the responsible ministry in the sector, the representatives of the audit committee, the management of the local government, and to the auditees by inviting independent experts in the field of internal audit when evaluating the efficiency of the compliance of local internal audit unit with the legal enactments regulating internal audit, standards of professional practice, and best practices in auditing. Research results showed that the greatest added value of internal audit is the benefits associated with improving management, budget planning and execution control, ensuring the uniform work of the office and circulation of documents, improved coordination of organisational and technical aspects of the council and the local government, as well as improving procurement processes and providing more efficient procurement plans

Internal audit in small local governments in Latvia

Research background The role of internal audit is to provide independent assurance that an organisation’s risk management, governance, and internal control processes are operating effectively. Purpose of the article The purpose of the article was to substantiate the significance of the internal audit function and the relationship between indicators in financial statement (revenue and balance sheet value) and the existence of the internal audit function in local governments in Latvia and to find out internal audit approaches for small local governments. Methodology/methods This study used the quantitative case study approach, financial statement (data) analysis, the Kolmogorov-Smirnov test, the Kruskal-Wallis test, the Mann-Whitney test, and the monographic method. Findings The research elucidated that the relationship between financial indicators like revenue and balance sheet values of local governments in Latvia differed significantly with high probability in the years 2013, 2014, and 2015, as evidenced in the Kruskal-Wallis test. Revenue and balance sheet values in local governments with the internal audit function differed significantly as the Mann-Whitney test results proved Conclusions The article suggests making changes and amendments to the legislation that should be supplemented with special conditions for local governments, that is, implementation of the internal audit depending on the revenue and the balance sheet value of a local government and a number of inhabitants in that local government

Internal Audit and External Audit Cooperation in EU Countries

There is no common requirement guiding the approaches taken by the European Union (EU) public sector internal audit cooperation with external audit. Relations between these audit systems have developed over time. There are countries with mandatory regulations of internal and external audit cooperation, in some cases cooperation bases on initiatives, to facilitate the auditing process and avoid duplication of work. The aim of this research is to compare the Latvian public administration internal audit and external audit cooperation approach with approaches of the European countries and evaluate each country’s internal audit relation with external audit. The methodology includes a comparative study of European countries’ public sector internal audit external audit cooperation from European Union Compendium report, researchers’ reports, the existing normative acts, analysing cases and other scientific findings. The main results of the study will highlight where improvements might be required or where changes are necessary. JEL codes: M4

A comparative analysis of the EU public sector internal audit methodology and requirements

There is currently no standard or requiremen t guiding the approaches taken by the European Union (EU) Public Sector internal audit. Therefore, the approaches taken by each country, although having some similarities are different.The aim of this research is to compare the Latvian state administration internal audit approach with Latvia and Poland and evaluate each country’s internal audit approach according to internal audit maturity determinants. The latter have been determined from literature, the Compendium report. Thereby, shedding light on the Latvian’s internal audit approach maturity. The methodology includes a comparative study of 5 European countries’ public sector internal audit methodologies, by carrying out a documents analysis and evaluation of the existing normative acts, Authors recommend introducing a common internal audit procedures manual, standards and guidelines for the public sectors in the EU Member States. They believe that this will improve internal controls and internal audit data analysis around Europe. The main results of the study will highlight the maturity of each of these countries’ internal audit approaches and their pros and cons. It will also highlight where improvements might be required or where changes are necessary.peer-reviewe

The Development of Global Internal Audit Methodology Approaches

Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes (IIA Definition, 2009). “…Whenever the advance of civilization brought about necessity of one man being intrusted to some extent with the property of other, the advisability of some kind of check upon the fidelity of the former would become apparent”(Richard Brown ,1961). The aim of this research is to clarify global internal audit historical methodology approaches. The objectives to reach the aim of research are to research internal audit historical development, to identify main facts of internal audit evaluation, to compare the development of internal audit approaches in the world and in the European Union Member states public sector. The main results of the study are Internal audit development is different in regions of the world author releases several stages of internal audit development – before and after formation of The Institute of Internal auditors (1941), before and after Standards for the Professional Practice of Internal Auditing approving (1978), Information technologies period (21th century). Keywords: internal audit, standards, internal control Topic of paper: Internal Auditing Methodology: history, case/field stud

Comparative Analysis of the EU Public Sector Internal Audit Methodology and Requirements

Abstract. There is currently no standard or requirement guiding the approaches taken by the European Union (EU) Public Sector internal audit. Therefore, the approaches taken by each country, although having some similarities are different. The aim of this research is to compare the Latvian state administration internal audit approach with approaches of the following specific European countries: United Kingdom, Malta, Estonia, Lithuania, Latvia and Poland and evaluate each country’s internal audit approach according to internal audit maturity determinants. The latter have been determined from literature, the Compendium report. Thereby, shedding light on the Latvian’s internal audit approach maturity. The methodology includes a comparative study of 5 European countries’ public sector internal audit methodologies, by carrying out a documents analysis and evaluation of the existing normative acts, analysing cases and other scientific findings of internal audit methodology and legislation. Authors recommend introducing a common internal audit procedures manual, standards and guidelines for the public sectors in the EU Member States. They believe that this will improve internal controls and internal audit data analysis around Europe. The main results of the study will highlight the maturity of each of these countries’ internal audit approaches and their pros and cons. It will also highlight where improvements might be required or where changes are necessary. Keywords: internal audit, public sector, internal control JEL code: M4