Abstract:
The objective of this article was to determine whether the internal audit function
(IAF) has a role to play in the prevention and detection of fraud in the South African
public sector, with reference to national departments. Accordingly, the possible role
of the IAF is discussed, with specific reference to fraud prevention and detection,
fraud risk and reportable wasteful, irregular and unauthorised expenditure. The
article presents a literature review and discusses the data gathered by means of a
survey from the accounting officers (AOs), who act as heads of department (HoDs),
the chairpersons of audit committees (CACs), and the chief audit executives (CAEs)
of national departments in the South African public sector on their perceptions
of the IAF’s role with regard to fraud. The findings show that the AOs, CACs
and CAEs believe that the IAF has a responsibility to detect material fraud and
reportable fruitless and wasteful, irregular or unauthorised expenditure in national
government departments. Furthermore, a review of the literature suggests that the
prevention and detection of fraud should remain the responsibility of the AOs,
and the survey revealed that the responding AOs and CACs perceive the IAF as a
management tool to detect elements of fraud. It is recommended that the AOs and
the IAFs should take equal responsibility in notifying the CACs about any allegations
of fraud received from any whistleblowing assurance provider. In conclusion, the
article suggests avenues for further research on internal auditing’s role regarding
fraud prevention and detection.
