WHEN PAKISTAN gained independence in 1947, the state-owned Pakistan Railways had a formal internal audit function. Other government and semi-government organizations at the time featured an inspection department, whose role resembled that of internal auditing.
After the promulgation of Pakistan's 1973 constitution, the Office of the Auditor General of Pakistan was formed. The auditor general had the authority to audit receipts, expenditures, and the use of any public funds at the federal and provincial level. Before long, an internal audit function was added to other mature public-sector organizations.
The political and social wave against corruption in the society as a whole led to a culture of public accountability and transparency in decision-making--an environment for which internal auditing was well-suited.
AUDITING LEGISLATION
During the past several years, internal auditing has been introduced gradually in the public sector. In 2001, a local-government ordinance was promulgated that requires all district-level bodies to have an internal audit function led by a chief audit executive.
Also in 2001, the federal government hired foreign and local consultants to help draft the Public Sector Internal Audit Act of 2003, which will make having an internal audit function mandatory for all local, provincial, and federal government institutions. When finalized, the act will be applicable to all institutions to which the government provides funds.
Pakistan's private sector is also subject to audit legislation. In March 2002, the Securities and Exchange Commission of Pakistan issued a code that required all companies listed on any of Pakistan's three stock exchanges to have an internal audit function.
RISING TO THE CHALLENGE
After the promulgation of Pakistan's 1973 constitution, the Office of the Auditor General of Pakistan was formed. The auditor general had the authority to audit receipts, expenditures, and the use of any public funds at the federal and provincial level. Before long, an internal audit function was added to other mature public-sector organizations.
The political and social wave against corruption in the society as a whole led to a culture of public accountability and transparency in decision-making--an environment for which internal auditing was well-suited.
AUDITING LEGISLATION
During the past several years, internal auditing has been introduced gradually in the public sector. In 2001, a local-government ordinance was promulgated that requires all district-level bodies to have an internal audit function led by a chief audit executive.
Also in 2001, the federal government hired foreign and local consultants to help draft the Public Sector Internal Audit Act of 2003, which will make having an internal audit function mandatory for all local, provincial, and federal government institutions. When finalized, the act will be applicable to all institutions to which the government provides funds.
Pakistan's private sector is also subject to audit legislation. In March 2002, the Securities and Exchange Commission of Pakistan issued a code that required all companies listed on any of Pakistan's three stock exchanges to have an internal audit function.
RISING TO THE CHALLENGE
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