Internal Audit in The Public Sector in Kosovo: Promoting Good Governance and Improving Performance

Audit is an integral part of the corporate governance framework in entities, designed to manage risks and achieve their objectives. A sound built-in internal audit function can play a vital role in the process of good governance and accountability of public sector institutions to public enterprises with their assessments of key effectiveness measured through the variables examined in this study such as: management support, independence of the organization and the role of the Internal Audit Committee. The target populations for this research were the internal audit units in public enterprises in the Republic of Kosovo. In Kosovo there are 17 central Publicly Owned Enterprises (POEs) and 43 local POEs, a total of 60 POEs, while all these units have internal audit staff. The data used to conduct this study are the main data obtained through questionnaires. Areas of study were selected using the deliberate sampling method from the offices of public enterprises in the public sector, which have the greatest impact on the overall economy of the country. Multiple regression method was used to analyze the data. According to the regression output, all these predictors (management support, organizational independence, and the role of the Audit Committee) have contributed positively to the effectiveness of internal audit functions in internal audit units in public enterprises in Kosovo. Therefore, public enterprises should emphasize the use of these determinants of variables to make their service delivery effective, efficient and economical across their units. This study has identified the factors that determine the effectiveness of internal audit in public enterprises and then analyzing the organizational dimensions in which the public sector should operate to increase the effectiveness of internal audit.