Proceedings

appropriated funds and local government units are required to conduct an internal
audit when a certain amount of income or expenditure is exceeded. In the remaining
institutions internal audit can be conducted if the head of this organization has the
will, or when it is imposed by the responsible minister.
According to the European guidelines (Agenda 2000), mentioned at the beginning of
the article, the concept of public internal financial control is associated with the
provision of "an independent internal audit, acting in all the public institutions by
law". It should therefore be considered whether the legislative requirement should
differentiate internal audit units in the Polish public sector due to the amount of
revenues or expenditures made. So should the financial aspect be the factor
determining the proper and effective functioning of public institutions? On the one
hand, internal auditing in Poland is developing through the implementation of
international standards and change of policies, on the other hand it always remains in
the area of financial control, by limiting the directory of units required to conduct the
audit using a single criterion - the amount of revenue or expenditure.
Another key issue in the field of auditing in public finance sector organizations is the
obligation to employ an internal auditor. Until 2009, each public sector entity obliged
to conduct an internal audit was required to hire an internal auditor. According to
current legislation some institutions are given the choice between the internal audit
being conducted by an employed internal auditor or by an auditor working for several
organization. This alternative results in public organizations using external audit.
External service provider may be either a natural or legal person who must meet
certain requirements imposed by law on public finance. These include in particular:
• the need to meet eligibility requirements governing the profession of internal
auditor in the public finance sector,
• the obligation to conduct an audit under the provisions of the Public Finance
Act and its implementing legislation.
When an organization decides to use the services of an external audit it is required to
sign a contract for at least a year. The possibility of using external service is accepted
by the responsible minister. The local government organizations can use external
audit services only if the amount of income and the amount of revenues and expenses
and expenditures is less than 100 000 000.
From an organizational point of view of internal audit, one should also mention the
protection of people employed as auditors in the public finance sector. In 2002-2005,
the body authorised to terminate the contract with an internal auditor or to change
conditions of contract was the Chief Inspector of Internal Audit. After the liquidation
of the position of Chief Internal Auditor the responsibilities were taken over by
Minister of Finance. In 2009, the amended Finance Act retained the entry defining
employment and change of working conditions of the internal auditor, but limited the
circle of auditors, only to chiefs audit executives.
5. LICENCE TO PRACTICE AS AN INTERNAL AUDITOR
Since 2002, namely the emergence of internal audit in the Polish law, the internal
auditor could be anyone who (Art. 35k, Act of 26 November 1998 ) :
• has the Polish citizenship (January 2006),
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