Abstract:
This article explores internal audit outsourcing practices in the South African public
sector. It examines the extent of outsourcing, the rationales for outsourcing, the
preferred external service provider(s) for an outsourced internal audit function (IAF),
as well as the status of outsourced IAFs. Data were gathered using questionnaires
to interview the heads of IAFs, namely chief audit executives (CAEs), and the users
of internal audit services, namely the chairpersons of the audit committees (CACs),
as well as the accounting officers (AOs) of national government departments in
South Africa. The findings indicate that the respondents preferred in-house IAFs to
outsourced IAFs, because of the perceived commitment to governance by in-house
IAFs. However, due to a lack of technical expertise and a shortage of competent
internal auditors, the IAF is often outsourced to external audit service providers.
These results provide public sector authorities with insight into the status of internal
audit practices in the public sector and will enable internal audit stakeholders to
optimise their sourcing practices and meet stakeholder expectations.
