Internal audit in the statutory bodies and government-linked companies of Malaysia (2005 - 2008): Dream of Dreams?

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.