Proceedings

� there are cases of mergers of units or positions of the internal audit with
internal control unit or another (the overwhelming trend in this area is in units
of local government).
IIA Standards raise questions related to the organization of internal audit, as well as
the tasks performed by internal auditors. According to them, the internal audit unit,
precisely the chief audit executive should be on the level of the organization which
will give him/her the organizational and functional independence in performing their
audit activity (Kubik A., 2005, p. 6). According to the Institute of IIA the chief audit
executive should report directly to a functional internal audit committee or its board.
For administrative purposes, however, the chief audit executive should report directly
to the President or the Director of the organization (Gleim I.N., 2004, p. 38). IIA
Institute in its Standards emphasizes a need to establish the committee and council
audit which they believe should be composed of people independent of the
management unit and whose responsibility is to assist internal auditors in carrying out
their duties independently and objectively. Standards indicate the position of the chief
audit executive in the organizational structure but do not designate the place for other
internal auditors. As a result of above mentioned managers are given the freedom to
shape the function of the audit. One should be remember though that each institution
is different, has its own regulations and organizational structure. The Standards are
meant to provide guidance and assistance in the era of internal audit organization but
do not impose a ready and unambiguous solution.
Another important issue is the number of internal auditors working in institutions of
the public finance sector. Some organizations employ from 1 to 5 or even 20 auditors
and other auditors work half or quarter-time. There are no guidelines to regulate this
issue. On the other hand, if such guidelines were to occur, it is worth considering their
content. According to E.J. Saunders, there are no established standards for the
construction, organization of internal audit and the number of people that should be
employed in it. This decision may be taken based on the assessment of the
organization, its structure and specificity of function. Number of employed internal
auditors should reflect the needs and development of an institution. The above cited
author recommends that their number in the unit should account for 2% of the
employees in the organization (Saunders E.J., 2003, p. 47). However, the quality of
the human factor should be considered there because, as K. Czerwinski points out,
employing even a large number of internal auditors in the organization will not
compensate for the lack of experienced people in the field of internal auditing, which
may lead to limiting the scope of audit work (Czerwinski K., 2004, p. 32). It should be
also noted that each institution operates in a changing environment and, therefore, an
internal audit of the unit must keep pace with these changes, and even overtake them
(See E.J. Saunders, p. 47).
Without questioning any of the listed solutions for the internal audit organization it
should be emphasized that while creating the internal audit unit one should take into
account the needs resulting from the necessity to ensure the supervision and control
over the functioning of the institution. This unit should be adjusted to the size,
structure and needs of individuals and consist of highly qualified people to ensure a
variety of performed tasks (Czerwinski K., 2004, p. 24). The main objective
underlying the introduction of internal audit in any institution should be to strive for
high quality of its operations by streamlining management processes, to stimulate
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