A new concept of public sector audit in the context of law, politics and economy: Internal audit

Public administration has been going through restructuring on a global scale throughout the final quarter of the 20th century. Reforms which performed in this sense question the position and structure of state. This process of change and transformation follows its course under the influence of specific factors, which are namely competition, recessions and globalization.The changes and transformation which took place in Turkey and all around the world also profoundly affected the public administration. Upon being recognized as a candidate for the EU at Helsinki Summit in 1999, practices started to be introduced for purpose of harmonizing the legal legislation that governs financial administration and control with the EU acquis. Within the framework of agreements implemented together with the IMF and the World Bank since the beginning of 2000's, the need for internal audit was noticed and practice of the 'Public Internal Financial Control' system -a standard practice for budgetary applications of member states- in our country as part of the process of harmonizing with the EU acquis.The concept of internal audit, in particular, was brought to the table with the law number 5018. The most important innovation that accompanied the internal audit system was that predetermined and internationally recognized standards constituted the basis of audits. This is to say, internal audit applications were to be performed in compliance with those standards and performance evaluation was to be carried out accordingly. The new approach was based not only on conventional practices but also on various official documents and reports which contained norms, standards and official rules acknowledged by international organizations.The general discussions in the literature examined the need for internal audits by reducing the topic down to merely legal and administrative elements, whereas some discussions took political events as the only determining element. It was established and highlighted in the thesis that discussions and assessments of both approaches were un-holistic and unidimensional, thus deficient and misleading. In this line, the subject of internal audits was looked into by making a common synthesis of both approaches.Additionally, analyzing the law number 5018 in terms of its relation to the global economic system and the actors of the system is a vital matter. Therefore, it will also cover considerable space in this thesis study.In conclusion, the objective of this thesis is to examine the *'internal audit' system within the scope of the law number 5018, which has just been introduced into the Turkish public financial administration system. During the course of this study, internal audit will be taken into account not only in terms of its legal aspects and technical functioning but also through a theoretical analysis of what the political, economic and social elements underlying and determining such a fundamental and substantial change are.