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Introduction

Internal auditing involves identifying the risks that could keep an organization from

achieving its goals, making sure the organization’s leaders know about these risks and

proactively recommending improvements to help reduce the risks. It assists management and the

governing body (e.g. the board, audit committee, government entities) in fulfilling their

responsibilities by bringing a systematic disciplined approach to assessing the effectiveness of

the design and execution of the system of internal controls and risk management processes.

Internal auditors add value to their organizations by providing assurance, insight, and objectivity.

Internal auditors can save their organization substantial amounts of money and protect its

reputation in the marketplace by identifying operating inefficiencies, wasteful spending,

employee theft, fraud, and cases of noncompliance with laws or regulations, for example.

According to The Institute of Internal Auditors (2015), internal auditing is an independent,

objective assurance and consulting activity designed to add value and improve an organization's

operations. It helps an organization accomplish its objectives by bringing a systematic,

disciplined approach to evaluate and improve the effectiveness of risk management, control, and

governance processes

In the public sector, auditing is a cornerstone of good public sector governance. By

providing unbiased, objective assessments of whether public resources are managed responsibly

and effectively to achieve intended results, auditors help public sector organizations achieve

accountability and integrity, improve operations, and instill confidence among citizens and

stakeholders. Auditors use tools such as financial audits, performance audits, investigations, and

advisory services to fulfill each of these roles Goodson, Mory, & Lapointe, 2012).
In the Philippines, the institutionalization of Internal Audit Service (IAS) in all agencies

of the national government is mandated under Republic Act No. 3456, otherwise known as the

Internal Auditing Act of 1962. This law was later amended by Republic Act No. 4177 in 1965,

which provided for the creation of IAS in government-owned and/or controlled corporations.

Subsequently, Administrative Order No. 278 was issued directing all heads of government

offices, agencies, government-owned and/or controlled corporations, including government

financial institutions and local government units to organize IAS in their respective offices, as an

integral part of the organization. To further ensure that IAS is institutionalized, Administrative

Order No. 70 dated April 14, 2003 and Memorandum Circular No. 89 dated August 2005 were

issued which provided for the strengthening of internal control systems in government offices,

agencies, government-owned and/or controlled corporations, government financial institutions,

state universities and colleges (SUCs) and local government units through the institutionalization

of IAS. In November 21, 2018, the Commission on Audit (COA) issued COA Circular No.

2018-003 prescribing the use of the Internal Auditing Standards for the Philippine Public Sector

(IASPPS) and Internal Control Standards for the Philippine Public Sector (ICSPPS). The

IASPPS provides guidance essential for the professional practice of internal auditing to improve

the effectiveness of governance, risk management, and control processes in all agencies of the

government (COA, 2018).

The Philippines does not lack initiatives pertaining to internal auditing. Five laws and at

least ten executive issuances have been made to mainstream internal audit in government

operations. However, there are still issues in internal auditing in the Philippine government such

as: enabling law(s) in the creation of IAU; organizational independence of IAU; conflict with

international standards and local practices; internal audit charter in government agencies; internal
auditing as assurance service and others (Mendoza, 2008). With the latest COA Circular

prescribing the use of IASPPS in 2018, this research would like determine the status of the State

Universities and Colleges (SUCs) in Region I in implementing the guidelines in the IASPPS and

the problems encountered in the implementation.

Theoretical Framework

The International Professional Practices Framework (IPPF) is the conceptual framework

that organizes authoritative guidance promulgated by The IIA. A trustworthy, global, guidance-

setting body, The IIA provides internal audit professionals worldwide with authoritative

guidance organized in the IPPF as mandatory guidance and recommended guidance. The updated

Framework was introduced in July 2015.


Conceptual Framework

Statement of the Problem

The study aims to find out the status of the State Universities and Colleges (SUCs) in

Region I in implementing the guidelines in the IASPPS and the problems encountered in the

implementation. Specifically it will answer the following questions:

1. What is the status of IAS among SUCs in Region I in the areas of:

1.1. Definition of Internal Auditing

1.2. Code of Ethics

1.3. Attribute Standards

1.4. Performance Standards

2. What is the status of IAS among SUCs in Region I, Philippines in the areas of:

Which among the components will show effectiveness in the internal control of

Significance of the Study

Scope and Delimitation

Methodology

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Bibliography

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1987 Philippine Constitution, 2(2), Article IX-D (Commission on Audit)

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Republic Act No. 4177 - An Act to Amend Sections two, three and four of Republic Act
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Department of Budget and Management Budget Circular No. 2011-5 - Philippine Government
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