Internal Audit Practices and Their Effectiveness in Local Government: A Comparative Sector Analysis using a systematic review
The investigations into effectiveness of current internal audit practices within local government is mandatory given deficiencies in their value. Using PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) methodology, a systematic review of 77 peer reviewed articles, reports, and case studies published between 2015 and 2024 was conducted. The analysis focused on audit planning, risk assessment, control evaluation and reporting practices of local governments. The findings indicate that while internal audit practice’s significant role in influencing organisational effectiveness, issues such as inconsistencies in compliance with audit standards, lack of sufficient resources and limited independence hinder their effectiveness. Notably, local governments facing financial distress display a weaker internal audit process, resulting in systematically sub‐optimal fraud detection and weak compliance oversight. Standardisation, resource allocation and stakeholder communication are areas where gaps in current practices need to be addressed to enhance transparency. The study emphasis need to utilise technology driven solutions such as data analytics in enhancing audit efficiency, increasing legislative reforms of audit independence and capacity-building initiatives of internal auditors and contributes to the discussion on how to improve the practices of internal audit in local government in order to enhance local government’s contribution to sustainable governance across the sectors. This research also contributes towards a conceptual framework to address the interface between internal audit practices and their effectiveness.