Evaluation Criteria for Internal Control and Internal Audit in the Public Sector: Differences, Complementarities and the Need for a Common Measurement Framework

Abstract

Internal control (IC) and internal audit (IA) are two important components of public governance, including public internal financial control (PIFC), but they are assessed through different criteria, instruments and methodological ways. This paper aims to examine the evaluation frameworks applied to IC and IA in the public sector, with a particular focus on the Republic of Moldova, and to identify the need for a common measurement approach able to better capture their functional inter-dependence. The study is based on a qualitative analysis of the national regulatory framework, including the Law on public internal financial control, national standards and reporting regulations, as well as on internationally recognised frameworks such as COSO, PEFA, SIGMA, ISO 9001, CAF and the Three Lines Model. The analysis is complemented by empirical evidence from the author’s previous research on the success factors of IA, based on a questionnaire survey of 47 internal audit professionals. The findings show that IC evaluation remains largely oriented towards compliance with standards and annual self-assessment process, while IA evaluation combines compliance, performance and value-added dimensions, including independence, professional capacity, implementation of recommendations and external quality assessment. The results also confirm that IA effectiveness is strongly associated with independence, adequate capacity, professional development, time management and managerial support. The paper concludes that the diversity of existing frameworks should not be viewed as a weakness, but as a basis for developing a common measurement language. CZU: [657.6:334.724]:005.585(478); JEL: M42, M48