International Journal of Finance & Managerial Accounting

International Journal of Finance & Managerial Accounting

Identifying and Ranking Weaknesses in Municipalities' Internal Auditing

Document Type : Original Article

Authors
Mina Bakhshizadeh 1
Zahra Yousefi Amin 2
Niloofar iman Khan 3
Yosuef Ahadi serkani 4
1 PhD student of accounting department, Firuzkoh Branch, Islamic Azad University, Firozkoh, Iran.
2 Assistant Professor of Accounting Department, Firuzkoh Branch, Islamic Azad University, Firozkoh, Iran.
3 Associate Professor of Business Management, Firuzkoh Branch, Islamic Azad University, Firozkoh, Iran.
4 Associate Professor of Accounting Department, Firuzkoh Branch, Islamic Azad University, Firozkoh, Iran
10.22034/ijfma.2025.78617.2280
Abstract
Municipalities are among the most important public institutions that have a great impact on urban order and discipline and have many financial and operational activities. Accountability is of great importance in this institution. Given the importance of accountability, corporate governance components such as internal audit should be considered. The aim of this research is to identify and rank the weaknesses of the internal audit of municipalities using the fuzzy Delphi method and the Analytical Hierarchy Process(AHP). In the first stage, to identify the components, specialized texts were studied and 14 experts familiar with the subject of internal audit and the activities of municipalities were consulted
. After mathematical calculations and fuzzification, 20 main weaknesses were identified
. Weak knowledge and competence account for the largest share of organizational problems, and weak quality control accounts for the largest share of managerial problems. Municipalities should develop their internal audit department and provide the necessary training in this field. This research has value and innovation in improving the financial and operational accountability of municipalities
Keywords
Internal Audit
Municipalities
Internal Audit Weaknesses
  1. Ackermann, C., & Marx, B. (2016). Internal audit risk management in metropolitan municipalities. Risk, Governance & Control: Financial Markets and Institutions, 6(3), 45-51.
  2. Albawwat, I. E., AL-HAJAIA, M. E., & AL FRIJAT, Y. S. (2021). The Relationship Between Internal Auditors' Personality Traits, Internal Audit Effectiveness, and Financial Reporting Quality: Empirical Evidence from Jordan. The Journal of Asian Finance, Economics and Business, 8(4), 797-808.
  3. Ayamga, B. N., & Bagina, R. W. (2019). The Effect of Internal Control Systems on Financial Performance in the Kassena Nankana Municipality, Upper East Region. Asian Journal of Economics, Business and Accounting, 10(1), 1-13.
  4. Barr-Pulliam, D., Eulerich, M. and Ratzinger-Sakel, N. (2024), "The effect of the internal audit function’s perceived assurance versus advisory purpose on the external auditor’s reliance decision", Managerial Auditing Journal, Vol. 39 No. 2, pp. 138-165.
  5. Botha, L. M., & Wilkinson, N. (2019). A framework for the evaluation of the perceived value added by internal auditing. Meditari Accountancy Research. 4(3), 27-39.
  6. Elmaasrawy, H.E. and Tawfik, O.I. (2025), "Impact of the assertive and advisory role of internal auditing on proactive measures to enhance cybersecurity: evidence from GCC", Journal of Science and Technology Policy Management, Vol. ahead-of-print No. ahead-of-print.
  7. Gaosong, Q., & Leping, Y. (2021). Measurement of internal audit effectiveness: construction of index system and empirical analysis. Microprocessors and Microsystems, 104046.
  8. Hunt, N. C., Curtis, M. B., & Rixom, J. M. (2022). Financial priming, psychological distance, and recognizing financial misreporting as an ethical issue: The role of financial reporting responsibility. Accounting, Organizations and Society, 101349.
  9. Husain, T. (2019). An Analysis of Modeling Audit Quality Measurement Based on Decision Support Systems (DSS). measurement, 275, 310-326.
  10. Islamzadeh, Omid, Hajinejad, Abolfazl, Zare, Parisa, Safari, Mehdi, (2022), Internal Controls in the Public Sector (Theoretical Perspective), Tehran: Termeh Publications.
  11. Khirkhah, A. , Abdoli, M. and Valiyan, H. (2021). Presenting a DACUM Model Based on the Triple-Strength Empowerment Approach to Women in Internal Auditing. International Journal of Finance & Managerial Accounting, 6(23), 35-57.
  12. Kokabi, S. , Kamyabi, Y. and Rezaeian, R. (2023). Identifying Criteria of Internal Audit Quality for Iranian listed Companies. International Journal of Finance & Managerial Accounting, 8(28), 55-74. doi: 10.30495/ijfma.2023.20523
  13. Lobo, G. and. Zhao, Y. (2012). “Relation between Audit Effort and Financial Report Misstatements” . The Accounting Review, In-Press.
  14. Mbewu, B. W., & Barac, K. (2017). Effective internal audit activities in local government: fact or fiction?. Southern African Journal of Accountability and Auditing Research, 19(1), 15-33.
  15. Molaei, M. E. Esmaeil , pouraghajan, A. A. and Abbasian Fredoni, M. M. (2022). Explanation and validation of the audit quality improvement model with the approach of focusing on internal and external components in Iran. International Journal of Finance & Managerial Accounting, 7(25), 29-43.
  16. Nerantzidis, M., Pazarskis, M., Drogalas, G. and Galanis, S. (2022), "Internal auditing in the public sector: a systematic literature review and future research agenda", Journal of Public Budgeting, Accounting & Financial Management, Vol. 34 No. 2, pp. 189-209.
  17. Shuwaili, A.M.J., Hesarzadeh, R. and Bagherpour Velashani, M.A. (2023), "Designing an internal audit effectiveness model for public sector: qualitative and quantitative evidence from a developing country", Journal of Facilities Management, Vol. ahead-of-print No. ahead-of-print.
  18. Sujan M, Smith-Frazer C, Malamateniou C,et al. (2023), Validation framework for the use of AI in healthcare: overview of the new British standard BS30440. BMJ Health Care Inform, doi:10.1136/ bmjhci-2023-100749
  19. Tlegray, J., & Selemani, Z. (2022). The Impact of Internal Audit Practices on Financial Management of Local Government Authorities: The Case of Morogoro Municipality in Tanzania. Asian Journal of Economics, Business and Accounting, 263-272.
  20. Vinnari, E., & Skærbæk, P. (2014). The uncertainties of risk management: A field study on risk management internal audit practices in a Finnish municipality. Accounting, Auditing & Accountability Journal, 27(3), 489-526.