THE new government requirement for all federal statutory bodies to set up internal audit units will enhance governance, transparency and accountability within them, said an industry group.

The Institute of Internal Auditors Malaysia (IIA Malaysia) said the new requirement will also help uphold the highest standards of integrity and control across government institutions.

It said the requirement was an essential progression in fortifying the internal control mechanisms of public sector entities. 

“The establishment of internal audit units will provide a robust framework for risk management, fraud prevention and operational efficiency, ensuring that federal statutory bodies operate with the highest level of accountability.

“IIA Malaysia has always been a staunch supporter of better control and governance within the country,” said IIA Malaysia president Mohd Khaidzir Shahari in a statement.

He said the new mandate will significantly contribute to the advancement of governance practices in statutory bodies.

“We are prepared to work closely with the statutory bodies to ensure the successful implementation of best practices.”

IIA Malaysia has a membership of 3,000 internal auditors, mainly from the private sector, and believes that a close collaboration with internal auditors from the public sector will enable knowledge-sharing and transfer of skills and expertise, to heighten the value of internal audit to the stakeholders, added Khaidzir.

Last week, the newly launched Guidelines on the Management and Governance of Federal Statutory Bodies mandated that all federal statutory bodies are now required to set up internal audit units.

These internal audit units must evaluate and improve effectiveness in risk management, conduct internal controls and recommend improvements to an agency’s management, among other things.

An internal audit unit must also present quarterly reports to an agency’s board of directors. – August 13, 2024.