The public sector needs a strong understanding of both its assurance requirements and the contribution of internal audit teams, according to a report from the Chartered Institute of Public Finance and Accountancy (CIPFA).

The research found that the wide range of services provided by internal audit teams are not always fully appreciated by public sector managers. For example, 91% of heads of internal audit who responded said they provided advice to the client on new systems or developments, while only 62% of managers agreed.

The report also identified cyber security, digitisation and climate change as the top strategic areas that internal audit should focus on in the next three years to stay relevant and provide most impact.

Internal audit: untapped potential is based on responses from over 800 internal audit professionals and clients from across the UK public sector.

CIPFA governance advisor and report author Diana Melville said: “This report provides a snapshot of the state of internal audit across the UK public sector. The impact of internal audit is dependent upon the audit team, the quality of the audit framework but also the organisation itself.

“Without good organisational governance and managerial processes in place, internal audit cannot realise its full potential and support the organisation in achieving its goals. The report highlights a lot of good progress, although there’s still room for improvement.”

CIPFA CEO Rob Whiteman added: “CIPFA believes that strong and high-quality internal audit has a vital role to play in helping improve public services. As the assurance needs of organisations change and evolve, we want to see internal audit keep up with these transformations and continue to make itself relevant in the years to come. Better internal audit means better public services – and that’s good for everyone.”