Internal Audit and Public Accountability as Strategic Instruments for Ensuring Transparency and Reliability in Public Financial Reporting

Abstract

The quality of financial statements represents a crucial component in achieving public accountability and good governance within the public sector. High-quality financial reporting characterized by reliability, transparency, and relevance serves not only as a tool for public disclosure but also as a strategic instrument that supports effective oversight, informed policy decisions, and sustainable trust between government institutions and society. Nevertheless, persistent challenges such as limited human resource capacity, inadequate compliance with accounting standards, and deficiencies in financial information systems often undermine the consistency and credibility of financial reports. Within this context, internal audit serves as a critical control mechanism that ensures the effectiveness of financial management, minimizes irregularities, prevents fraud, and enhances operational efficiency. Employing a systematic literature review approach, this study explores the interrelationship among financial statement quality, public accountability, and internal audit effectiveness in promoting good governance within governmental entities. The findings reveal that effective internal auditing positively contributes to improving transparency, strengthening the reliability of financial reports, and increasing public confidence in governmental accountability.