Examining the Challenges Faced by Internal Auditors in the Public Sector

Ouafa Sakka, associate professor of accounting, has received a SSHRC Explore grant for a new research project that looks at the internal audit function in the public sector. With a history of researching controls in other contexts, the failure of the Phoenix payroll system for federal public service employees caught her attention and ignited her interest in this research topic.

“When you read the Auditor General report, you don’t understand how [the Phoenix pay system] failed. There are so many different controls. There is a strong internal auditing function. So what exactly went wrong?” Ouafa asked.

Ouafa’s research seeks to understand what challenges the internal auditing function faces in the Canadian public sector. She will be examining the professional requirements set by the Institute of Internal Auditors and government policies and comparing them to the academic literature on internal auditing to identify the challenges encountered by internal auditors in the public sector.

For example, the academic literature has already identified that internal auditors face challenges when it comes to their independence. They report to management but at the same time they should be independent from management. However, the existing research is limited to one aspect of internal auditing, whereas Ouafa’s project will be broader.

“In our paper we will be more comprehensive and also validate the findings with internal auditors in the Canadian public sector,” explained Ouafa.

Ouafa said the Institute of Internal Auditors may also find the results interesting to see the extent to which their requirements are all applicable in practice. The project started in April 2018 and will be Ouafa’s project for the next two years.