Audit Capacities in the Public Sector of the Republic of Moldova: Challenges and Opportunities for Increasing the Efficiency of the Internal Audit Function

Abstract

This study investigates the capacities of internal audit within the public sector of the Republic of Moldova, emphasizing the critical role of organizational structure, resources, and processes in determining the effectiveness of the audit function. The research aims to address the significant challenges faced by internal audit subdivisions, including under-resourcing, insufficient staffing, and the lack of standardized procedures. These factors hinder the ability of internal audit units to provide comprehensive audit coverage, independent assurance and consulting, thus to contribute to effective risk management and internal control. By conducting a detailed analysis of various public entities, based on their annual self-assessment reports, the study uncovers substantial disparities in resource allocation, with many audit units struggling to meet their responsibilities due to limited personnel and fragmented organizational structures across various entities and levels of the administration. The findings highlight the urgent need for strategic investments in human capital, the adoption of uniform procedures, and alignment with international standards. Enhancing audit capacities is essential not only for improving audit quality and scope but also for strengthening governance, ensuring responsible public finance management, and upholding transparency and accountability in public administration. These improvements are vital for fostering greater trust and efficiency within Moldova's public sector, contributing to better public service delivery. UDC: [657.6:334.012.33](478); JEL: H83.