Professional Documents
Culture Documents
Internal auditing involves identifying the risks that could keep an organization from
achieving its goals, making sure the organization’s leaders know about these risks and
proactively recommending improvements to help reduce the risks. It assists management and the
governing body (e.g. the board, audit committee, government entities) in fulfilling their
the design and execution of the system of internal controls and risk management processes.
Internal auditors add value to their organizations by providing assurance, insight, and objectivity.
Internal auditors can save their organization substantial amounts of money and protect its
employee theft, fraud, and cases of noncompliance with laws or regulations, for example.
objective assurance and consulting activity designed to add value and improve an organization's
disciplined approach to evaluate and improve the effectiveness of risk management, control, and
governance processes
providing unbiased, objective assessments of whether public resources are managed responsibly
and effectively to achieve intended results, auditors help public sector organizations achieve
accountability and integrity, improve operations, and instill confidence among citizens and
stakeholders. Auditors use tools such as financial audits, performance audits, investigations, and
advisory services to fulfill each of these roles Goodson, Mory, & Lapointe, 2012).
In the Philippines, the institutionalization of Internal Audit Service (IAS) in all agencies
of the national government is mandated under Republic Act No. 3456, otherwise known as the
Internal Auditing Act of 1962. This law was later amended by Republic Act No. 4177 in 1965,
which provided for the creation of IAS in government-owned and/or controlled corporations.
Subsequently, Administrative Order No. 278 was issued directing all heads of government
financial institutions and local government units to organize IAS in their respective offices, as an
integral part of the organization. To further ensure that IAS is institutionalized, Administrative
Order No. 70 dated April 14, 2003 and Memorandum Circular No. 89 dated August 2005 were
issued which provided for the strengthening of internal control systems in government offices,
state universities and colleges (SUCs) and local government units through the institutionalization
of IAS. In November 21, 2018, the Commission on Audit (COA) issued COA Circular No.
2018-003 prescribing the use of the Internal Auditing Standards for the Philippine Public Sector
(IASPPS) and Internal Control Standards for the Philippine Public Sector (ICSPPS). The
IASPPS provides guidance essential for the professional practice of internal auditing to improve
the effectiveness of governance, risk management, and control processes in all agencies of the
The Philippines does not lack initiatives pertaining to internal auditing. Five laws and at
least ten executive issuances have been made to mainstream internal audit in government
operations. However, there are still issues in internal auditing in the Philippine government such
as: enabling law(s) in the creation of IAU; organizational independence of IAU; conflict with
international standards and local practices; internal audit charter in government agencies; internal
auditing as assurance service and others (Mendoza, 2008). With the latest COA Circular
prescribing the use of IASPPS in 2018, this research would like determine the status of the State
Universities and Colleges (SUCs) in Region I in implementing the guidelines in the IASPPS and
Theoretical Framework
that organizes authoritative guidance promulgated by The IIA. A trustworthy, global, guidance-
setting body, The IIA provides internal audit professionals worldwide with authoritative
guidance organized in the IPPF as mandatory guidance and recommended guidance. The updated
The study aims to find out the status of the State Universities and Colleges (SUCs) in
Region I in implementing the guidelines in the IASPPS and the problems encountered in the
1. What is the status of IAS among SUCs in Region I in the areas of:
2. What is the status of IAS among SUCs in Region I, Philippines in the areas of:
Which among the components will show effectiveness in the internal control of
Methodology
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Bibliography
Abu Tabar, T. A. (2015) The Role of Internal Audit function in the Public Sector.
Dube, S., & Danescu, D. (2011) Supplemental Guidance: Public Sector Definition.
Goodson, S.G., Mory, K.J., & Lapointe, J. R. (2012) Supplemental Guidance: The Role of
Auditing in Public Sector Governance.
MacRae, E. & Van Gils, D. (2014) Nine Elements Required for Internal Audit Effectiveness in
the Public Sector.
Mallari, M. Q. & Santiago M. M. (2013) Status, Problems, and Prospects on Internal Audit
Services of State Universities and Colleges in the Philippines Towards Strengthening
Internal Control System.
Sabio, C. J. (2013) The State of Internal Audit Practice in selected Philippine Government
Agencies: Basis for Policy.
Republic Act No. 3456 - An Act Providing for the Creation, Organization and Operation of
Internal Audit Services in All Departments, Bureaus and Offices of the National
Government” (The Internal Auditing Act of 1962), 16 June 1962
Republic Act No. 4177 - An Act to Amend Sections two, three and four of Republic Act
Numbered Three Thousand Four Hundred Fifty-Six, known as "Internal Auditing Act of
1962", 26 March 1965
Presidential Decree No. 1 - Reorganizing the Executive Branch of the National Government, 24
September 1972
Administrative Order No. 278 - Directing the Strengthening of the Internal Control Systems of
Government Offices, GOCCs, including GFIs and LGUs, in their Operations, 28 April
1992
Administrative Order No. 70 - Strengthening of the Internal Control Systems of Government
Offices, Agencies, GOCCs, including GFIs, SUCS and LGUs, 14, April 2003
Department of Budget and Management Budget Circular No. 2004-4 - Guidelines on the
Organization and Staffing of Internal Auditing Units (IAUs), 22 March 2004
Memorandum Circular No. 89 - Reiterating Compliance with A.O. 70, S. 2003 "Strengthening of
the Internal Control Systems of Government Offices, Agencies, GOCCs, including GFIs,
SUCS and LGUs" and its Implementing Guidelines under DBM Budget Circular No.
2004-4, 18 August 2005
Memorandum Circular No. 12 - Qualification Standards for IAS Positions, 22 June 2006
Department of Budget and Management Budget Circular No. 2008-5 - Guidelines in the
Organization and Staffing of an Internal Audit Service/Unit and Management
Division/Unit in Departments/Agencies/GOCCs/GFIs Concerned, 14 April 2008
Department of Budget and Management Budget Circular No. 2011-5 - Philippine Government
Internal Audit Manual (PGIAM), 19 May 2011
Memorandum Circular No. 12 - Qualification Standards for IAS Positions, 22 June 2006
Commission on Audit Circular No. 2018-003 - Prescribing the use of the Internal Auditing
Standards for the Philippine Public Sector and Internal Control Standards for the
Philippine Public Sector