The application of the internal audit function at a selected telecommunications company : a case study

Abstract

Purpose: The purpose of this study was to evaluate the internal audit function operating within a local telecommunications organisation. The objectives of this study were 1) to assess how the internal audit function operates within the organisation by evaluating its interaction with other departments and how the function carries out its role, 2) to identify any weaknesses in the internal audit function of the organisation and 3) to provide possible recommendations aimed at improving the organisation’s internal audit function. Design: Semi-structured interviews were carried out with the Internal Audit Manager, two senior management participants and three departmental managers. The interviews addressed various aspects relating to the organisation’s internal audit function including its structure, how it’s duties were determined and carried out, the reporting environment within the organisation and perceptions held by the function’s stakeholders. Findings: This study found that the internal audit function has only recently been formed and made up purely of in-house staff. The function is not wholly perceived as being independent within the organisation, mostly due to the lack of an audit committee. The function, in addition to its more traditional duties, has also been noted to carry out a role aimed at enhancing customer experience, in line with the changing definition of internal auditing that encompasses an advisory role as well as the more conventional assurance role. Conclusions: Despite only being set up recently within the organisation, the internal audit function is off to a promising start and given its current limitations, it seems to be operating in an appropriate manner. However, in this early stage in its life, the organisation’s management should aim to strengthen the function and allow it to grow and prosper by ensuring that the function is provided an environment that enables it to strive. Implications/Value: Recommendations have been provided on the basis of this study with the aim of improving the internal audit function within the organisation. Additionally, it is the researcher’s hope that this study can be used to contribute towards adding awareness on the internal audit profession in the local context.