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Internal audit is an independent appraisal function set up by the management of an entity for the inspection of the internal control system as a ministry to the entity. It objectively investigates, assesses and reports on the sufficiency of internal control as a dedication to the appropriate, economic and effective utilize of resources. Besides, internal audit is a management responsibility as to retain the internal control system and to assure that the entity's resources are appropriately made used in the manner and on the activities planned. It also includes the responsibility of the internal auditor for the prevention and detection of fraud and other illegal acts. In Malaysia, internal audits are governed by The Institute of Internal Auditors Malaysia (IIA Malaysia), and complied with International Professional Practices Framework (IPPF).
The summary assesses that the effort of the Institute of Internal Auditor (IIA) in improving the professional status of both the discipline of internal auditing and the IIA itself. Over the last half-century, the Institute of Internal Auditor (IIA) has already put a lot of efforts in raising professionalization of internal auditing. The IIA has set up the paraphernalia of a formal professional framework but several factors arise to block the professional "project", the most significant of the factor is the absence of monopolistic to dominate the discipline. The IIA confront two options in the future. It may wish to continue further along the way of establishing a formal professional framework. Alternatively, the IIA in its modern form may be ideally placed for a new, post-professional world from the traditional, antiquated professional institutions seems ill equipped.
What is a profession? Macdonald (1995, p. 1) offers a useful working definition of professions as "occupations based on advanced, or complex, or esoteric, or arcane, knowledge". The definition definitely determined knowledge as a fundamental composition in professionalism. However, knowledge alone is an inadequate of the definition of professionalism. It lacks a social legitimacy since it has absence of an institutional framework and an acceptable ethical basis. The social legitimacy of a profession thus has to be derived from the manner that a knowledge base is institutionalized and ethically framed. In summary, a profession is defined as an occupation based on advanced, complex, or esoteric knowledge, backed by a social legitimacy deriving from both an institutional framework and a credible ethical basis.
The Institute of Internal Auditors (IIA) is a non-profit professional organization dedicated to the advancement and development of the internal audit profession. The mission of the Institute of Internal Auditors is to stipulate a "dynamic leadership" for the global profession of internal auditing such as to advocate and promote the value that internal audit professionals add to their organizations, provide the comprehensive professional education and development opportunities, standards and other professional practice guidance and certification programs, and even research, disseminate, and promote to the practitioners and stakeholders knowledge concerning internal auditing and its appropriate role in control, risk management, and governance. Furthermore, IIA also has putting more efforts on to educate the practitioners and other relevant audiences on best practices in internal auditing, and even to bring together internal auditors from all countries to share information and experiences. In addition, there are some certificates are offered by the IIA. The Certified Internal Auditor (CIA) is the primary professional designation offered by the IIA for internal auditors and is a standard by which individuals may demonstrate their competency and professionalism in the internal audit field. While the other certificates offered by the IIA includes Certification in Control Self Assessment (CCSA), Certified Government Auditing Professional (CGAP) for government performance auditing and government auditors, Certified Financial Service Auditor (CFSA), and Certification in Risk Management Assurance (CRMA).
Sawyer and Vinten suggest that there are some problems about the identification of internal auditors as true professionals. Degrees and certification may not do it. After all, only doctors can write prescriptions. Only attorneys can submit legal briefs. Only certified public accountants can certify to financial statements, but anyone can sign an internal audit report (Sawyer and Vinten, 1996, p.34). There is no doubt that the principal driving force behind the increasing professionalization of internal auditing has been the IIA. Therefore, the IIA has established three elements of a proto-professional framework comprising with the definition of a profession: an autonomous expertise, an institutional framework and a public service ethos.
For the first proto-framework of an autonomous expertise, IIA have identified a credible knowledge basis as a prerequisite in the definition of a profession. The importance of an intellectually robust epistemology of internal auditing is a recurring theme in the discipline's literature. Secondly, the institutional framework of a profession bolsters and formalizes its theoretical basis that delivers certification, a sophisticated literature (including serials), research activities and written standards. Examinations and certification rest on the assumption of the existence of a body of knowledge that can be taught and tested. Research activities assume that there is a body of knowledge to be investigated, and a developed literature suggests that there is a sufficiently coherent body of knowledge to be communicated to a wide audience. Thirdly, a public service ethos should to be embodied in a code of ethics. An ethical foundation is essential for a profession, and the IIA's aspirations to professional status have therefore necessarily involved ethical considerations. The IIA's Code of Ethics in setting out standards of conduct, is an attempt to claim institutional moral authority for the IIA and for internal auditing.
To enhance professional status of internal auditing has not developed from the IIA's creation of a proto-professional framework alone. It is also assisted by international corporate governance initiatives that have endorsed the importance of internal auditing, the IIA has made a powerful claim for authoritative status for both itself and the practice of internal auditing.
Although tangible progress in all these areas has been considerable, a number of factors appear to restrain the potential for a fully blown professional "project" which should has been the IIA wish to undertake one. Five sources of weakness in internal audit's professional status are suggested: symbolism and mythology, short term tenure, established title, ethical compromise and, exclusivity which is the most serious.
Symbolism and mythology can create a sense of mystique and aloofness crucial to a profession's social legitimacy. However, the IIA and internal auditing are weak in the field of symbolism and mythology, and there is no obvious image that identifies the internal auditor as a professional. There is no symbolic image in internal auditing to compare with. The second potential weakness is about the post of internal auditor can be little more than a transient position on the way to jobs in other parts of the enterprise. The short term tenure in internal auditing positions may erode the professional status of internal auditing, by downgrading the intrinsic value of the discipline as a rewarding and credible career. In the matter of established title for the internal auditing, there is a considerable debate over the appropriate title for the internal auditor. Some of them propose titles of internal audit as "control assurance consultant" or "business process consultant". The lack of clarity over professional designation is a potential weakness in establishing the professional legitimacy of internal auditing. Furthermore, the perception that internal auditing was compromised in the excesses of the new public management (NPM) for the late twentieth century with a rather hard-nosed managerialism also may be potential source of weakness in the ethical status of internal auditing.
All of the weaknesses above are all potential retraining factors on the further development of the professional status of internal auditing. However, exclusivity is essential to the professional project, and this may be the most important limiting factor on the further professionalization of the discipline. The IIA does not have restrictive or monopolistic control over areas such as the certification of internal auditors and definitions of internal auditing. The internal auditors do not enjoy the monopolistic privilege or of even a clearly defined jurisdiction of activity appear to be the most significant brakes on any further professional "project" the IIA may wish to undertake.
In a conclusion, the IIA still has not yet reached a "regulative bargain" with a state to obtain a jurisdiction within which it can set the terms of reference. In the absence of monopolistic or quasi-monopolistic rights, accountants and others are freely roam into internal auditing territory and the IIA finds itself competing with alternative sources of authority. However, the IIA may still bolster its professional status by forging stronger links with other professional organizations and by continuing its impressive and prestigious publication programmes, an area in which the organization has already distinguished itself as an indispensable source of authority on internal auditing. In addition, traditional professional institutions increasingly appear antiquated in a post-modern world characterized by portfolio careers and multi-disciplinary activities. The IIA in its current form could be well positioned to prosper in this new, "post-professional" environment.