New law aims to protect internal auditors, strengthen public oversight

Institute of Internal Auditors Chairperson Lilian Wangeci presents an award of special recognition to Sammy Kimunguyi, on Internal Auditor General Treasury, during the 2nd Internal Audit and Risk Awards gala dinner in Nairobi, on April 12, 2025. [File, Standard]

Kenya is on track to enact a landmark Internal Auditors Act, designed to shield the profession from litigation, victimisation, and executive interference, while strengthening public-sector accountability.

The legislation establishes a robust disciplinary framework to enforce global auditing standards and professional ethics.

The Act, will empower internal auditors to operate independently, a critical requirement given the unique demands of their role in evaluating governance, risk, and controls within organizations.

This comes at a time when the Auditor General's reports show that roughly 79 per cent of audit recommendations are not fully implemented. At the same time, oversight offices are sometimes viewed as competitors to established governance structures, a perception that hinders auditors' access to critical financial documents during active audits. 

As of late 2025, the auditor general reports that only 21 per cent to 27 per cent of audit recommendations were fully implemented by government entities. Majority remain unimplemented or partially ignored, undermining legislative oversight.

Between 2022 and 2025, the OAG issued only 7,312 reports against a target of 9,658 due to limited resources.

Auditors stressed that evidence-based auditing, rigorous criteria and clear reporting are essential to prevent the repetition of findings and ensure audit conclusions drive real change.

The proposed Act is seen as a significant step toward professionalizing internal auditing in Kenya and reducing mismanagement of public resources. If passed as scheduled, it will mark a new era of protected independence for auditors and stronger governance nationwide.

Speaking during an internal audit and risk awards 2026 in Nairobi, hosted by the Institute of Internal Auditors Kenya (IIA Kenya), in partnership with the Public Sector Accounting Standards Board (PSASB), IIA Chairperson, Lilian Wangechi, noted,

“auditors must work independently, uphold integrity, and adhere to the highest ethical standards. This Act will protect them even as they engage stakeholders,” Wangechi.

The push for the law stems from persistent challenges facing internal auditors, particularly in the public sector.

According to Georgina Muchai, the CEO Public Sector Accounting Standards Board, noted lack of support from chief executives and accounting officers, as well as chronic underfunding, hampers effective operations.

The Act is expected to address these gaps by legally guaranteeing independence and providing mechanisms to discipline non-compliant members.

Officials believe the legislation will elevate the entire profession and reinforce its central role in good governance.

“When the internal auditor is empowered and able to work without fear of victimization, good governance will be established within our organizations,” Muchai said.

Pius Nduatih, Chairman of the Public Sector Accounting Standards Board said that strong internal audit functions are directly linked to greater transparency and accountability, issues that remain high on the national agenda.

The first final draft of the Internal Auditor’s Bill has been shared with members, with a feedback forum scheduled for Tuesday, April 14.

Additionally, IIA Kenya launched a Member Protection Framework to safeguard professionals facing victimization or retaliation for upholding ethical standards.

The institute’s student membership has also grown significantly to 800, providing mentorship and networking opportunities to build a strong talent pipeline for the future.

The announcement came during an awards gala that celebrated excellence in internal auditing and recognized leaders who champion the function.

The event also featured student awards, including the CRMA Student of the Year and Quality Assessor Student of the Year categories.

Government reforms such as the zero-fault audit were highlighted as complementary efforts to upscale accountability across the public sector.

Auditors reiterated that excellence in internal auditing is essential for safeguarding public resources, building trust, and supporting sustainable development in both public and private institutions

According to Stanley Mwangi, the deputy AG, leadership and management should take internal audit reports seriously and act promptly on them to identify and mitigate risks early, fix loopholes, reduce losses, and lower the cost of corrections.

He further notes that the adoption of the 15 principles from the 2024 Global Internal Audit Standards will significantly enhance professionalism, uniformity in reporting, and consistency at national, regional, and international levels.

“This will enhance the government's initiative of having a zero-fault audit regime in the public sector. Internal auditors will play a big role in seeing the success of that zero-fault audit initiative,” Mwangi said.

The event was held under the theme, Internal Audit and Risk Management Excellence: Elevating Standards. It brought together professionals from both the public and private sectors to recognise individuals and organisations demonstrating exceptional commitment to quality, ethics, and value delivery in internal auditing.