Internal Audit and Financial Misconduct: The Case of the South African Social Security Agency(SASSA)

Abstract

The paper which emanates from author's doctoral study, explored the role of an internal audit function in averting financial misconduct, at the South African social Security((SASSA). A review of literature pointed to the scarcity of research that focuses on the role that an effective internal audit function can play in making recommendations for the institution of internal controls that would contribute to averting or reducing financial misconduct, in developing countries such as South Africa . In this context, the study emphasised that although internal audit plays an advisory role the function still has an important task to play as highlighted above. Thus the problem statement for the study was articulated as follows: The existence of an internal audit function at SASSA had not resulted in improved internal control, which contribute to the curbing of financial misconduct. Consequently, the main research question for the study was : what are the necessary conditions under which an internal audit function could be improved? Using Agency theory the study conceptualised an internal audit function as an important part of internal management controls that functions by reviewing, evaluating and making recommendations for the improvements of other controls within an institution, with the aim of promoting good governance. The research design and methodology for the study was qualitative as it was necessary to get the views of the respondents on the various themes covered in the interview schedules and survey questionnaire. The Case study design was employed as the operational framework for data collection. The main findings of the study are articulated in a conceptual framework for the effective implementation of an internal audit function.