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NCJ Number: 67475 Find in a Library
Title: WILL THE IG (INSPECTOR GENERAL) ACT IMPROVE INTERNAL AUDITING IN FEDERAL AGENCIES?
Journal: INTERNAL AUDITOR  Volume:3  Issue:3  Dated:(JUNE 1980)  Pages:97-101
Author(s): W R DEZERNE
Date Published: 1980
Format: Article
Annotation: THE INSPECTOR GENERAL ACT OF 1978 IS EVALUATED FROM THE HISTORICAL PERSPECTIVE OF FEDERAL INTERNAL AUDITING AND ITS POTENTIAL EFFECTS ON INTERNAL AUDITING ARE ASSESSED.
Abstract: THE IDEA OF CONGRESS PRESCRIBING RULES BY STATUTE TO ACCOMPLISH PROFESSIONAL ACCOUNTING OBJECTIVES DATES FROM 1950, WHEN THE GENERAL ACCOUNTING OFFICE (GAO) WAS AUTHORIZED TO PRESCRIBE THE PRINCIPLES, STANDARDS, AND RELATED REQUIREMENTS OF ACCOUNTING FOR EXECUTIVE AGENCIES. AT THE SAME TIME, THE NEED FOR INTERNAL AUDITING OF FEDERAL AGENCIES WAS RECOGNIZED, AND FUNDAMENTALS FOR INTERNAL AUDITING WERE DEFINITIVELY ISSUED BY GAO IN 1974. THE PASSAGE OF THE INSPECTOR GENERAL (IG) ACT WAS NECESSARY BECAUSE FEDERAL AGENCIES FAILED TO COMPLY WITH THE EARLIER MANDATES TO ESTABLISH EFFECTIVE INTERNAL AUDIT SYSTEMS. THE PRIMARY PROVISIONS OF THE IG ACT CREATE INSPECTORS GENERAL IN THE 12 EXECUTIVE AGENCIES AND CONSOLIDATE AUDITING AND INVESTIGATIVE RESOURCES FOR USE IN COMBATTING FRAUD, ABUSE, WASTE, AND MISMANAGEMENT IN THE AGENCIES' PROGRAMS AND OPERATIONS. THE IG'S COORDINATION AND LEADERSHIP ARE EXPECTED TO STRENGTHEN COOPERATION BETWEEN THE AGENCY AND THE DEPARTMENT OF JUSTICE DURING FRAUD INVESTIGATIONS AND PROSECUTIONS. THE ACT IS ALSO EXPECTED TO UPGRADE THE AUDITING AND INVESTIGATIVE FUNCTIONS IN THE EXECUTIVE AGENCIES. THE ACT CONTAINS SOME HAZARDS TO IMPROVED INTERNAL AUDIT SYSTEMS, HOWEVER, BECAUSE IG'S ARE TO BE RESPONSIBLE TO BOTH CONGRESS AND THEIR RESPECTIVE AGENCY HEADS. IN ADDITION, THERE MAY BE TEMPTATION TO SUBORDINATE INTERNAL AUDITING PRIORITIES TO INVESTIGATIONS, WHICH WOULD NARROW THE SCOPE OF INTERNAL AUDIT AND RESULT IN A DEEMPHASIS OF THE INTERNAL AUDIT MISSION. AN AGENCY'S SUCCESS OR FAILURE IN MEETING GAO AUDIT STANDARDS WILL DEPEND ESSENTIALLY ON WHETHER INTERNAL AUDIT IS USED TO CARRY OUT THE AUDIT MISSION OR THE AUDITOR IS LOOKED UPON AS A READILY AVAILABLE TALENT POOL TO USE ON SHORT NOTICE FOR INVESTIGATIONS THAT APPEAR MOMENTARILY CRITICAL. IN THE FINAL ANALYSIS, THE ONLY EFFICIENT WAY TO REDUCE FRAUD, WASTE, AND ABUSE, AND ERROR IN ANY ORGANIZATION IS THROUGH MANAGEMENT ACCOUNTABILITY AND CONTROLS. INVESTIGATION AND AUDIT ARE NOT SUBSTITUTES FOR MANAGEMENT; THEY ARE TOOLS TO ASSIST MANAGEMENT IN ITS RESPONSIBILITY TO PREVENT FRAUD AND ABUSE. (MRK)
Index Term(s): Auditing standards; Audits; Fraud; Laws and Statutes; Regulations compliance; US Government Accountability Office (GAO)
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http://www.ncjrs.gov/App/publications/abstract.aspx?ID=67475

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