Internal Audit Engagement and Risk Management in Public Sector Organizations: Does It Really Exist?

Abstract

Business entities have undergone a shift in the internal audit function towards a more consultative role. Conversely, in public sector institutions like universities, it is not widely recognized. This study investigates how the new paradigm shift in Internal Audit Engagement in Risk Management impacts the Efficiency of Internal Audit. This study introduces Management Support as a moderating variable in the relationship between the two variables. The study included a sample of 51 internal auditors at PTN BLU. Snowball sampling is employed for sampling, and a questionnaire is used for data collection. The data analysis employed Moderated Regression Analysis (MRA). The results indicate that the first hypothesis is confirmed: Internal Audit's participation in Risk Management impacts the Efficiency of Internal Audit. The second hypothesis is confirmed: Management Support influences the relationship between Internal Audit Engagement in Risk Management and Internal Audit Effectiveness. Management support has a substantial impact on the relationship between the two, accounting for 61.1%. This study confirms that cooperation between internal audits and public entity management can enhance the internal audit's effectiveness.