Abstract:
This is the third and final part of a series of studies conducted on the state of internal audit in Malaysia’s public
sector. The present study covers 47 organizations at the federal government level: 27 statutory bodies and 20
government-linked companies. From the face-to-face interviews conducted with internal auditors over the
three year period of 2005 to 2008, the findings echo those of the previous two internal audit studies: Azham et
al (2007a) on internal audit in the state and local governments of Malaysia, and Azham et al (2007b) on
internal audit in the nation’s federal government ministries, departments and agencies. That is, there is still
much left to be desired of the internal audit function in a majority of the organizations. Despite this very fact,
there exists much hope and high aspirations among the internal auditors that the internal audit function in their
organizations is only going to get better. In relation to this, they have come out with numerous ideas for
internal audit strengthening in the public sector as a whole. Unfortunately, their attitude suggesting that “hope
springs eternal” is incongruous with the depressing realities of Malaysian governance in several levels of
government documented by these researchers and others over the years. Hence, just like the case of external
audit for Malaysian companies in the decades following the implementation of the New Economic Policy in the
early 1970s (Azham 1999), the effectiveness of internal audit in the public sector of Malaysia appears to be
following suit, a case of hope being strangled by experience – assuming the current pace of change taking
place in the Malaysian polity does not improve.
