Internal auditors: their role in the institutions of higher education in Malaysia

Purpose - To provide evidence on the establishment of the internal audit function in the higher education institutions in Malaysia and also to obtain the perceptions of the management of the higher education institutions towards the role and scope of the internal audit. Design/methodology/approach - Sample consisted of 17 public universities and 49 private universities in Malaysia and variables used by Gordon and Fischer were adopted for this study. Findings - The findings revealed that a substantial number of private institutions of higher education do not have an internal audit function. The study also indicates that the management of both types of institutions have similar perceptions on the role of internal auditors and the important audit areas as there are no significant differences between public and private institutions of higher education. Research limitations/implications - The main limitation of this study is that it only examines whether the scope of internal audit covers the areas mentioned by treasury circular or the IIA Guideline. It ignored the extent to which the higher education institutions comply with both guidelines. It is, therefore, suggested that future research could consider the degree of compliance to the above guidelines. The difference in the role of internal auditing between the education sector and other industries represents an interesting area for further research. Also, since this study only focuses on the perceptions of the management and the internal auditor themselves, the perception of other parties such as regulators and the audit committee on the role of internal audit in institutions of higher education will be an interesting area to explore for future research. Practical implications - The failure to establish an internal audit function in the private universities calls for government intervention to ensure the existence of an internal audit function in the private sector higher education institutions. Originality/value - The findings of this paper will be important in further refining the scope of the internal audit function in the higher educations institutions in Malaysia, especially to policymakers concerned with regulations governing the internal audit function.