273 THE ROLE OF INTERNAL AUDIT WITHIN PUBLIC ENTITIES MARIA MORARU, FRANCA DUMITRU WEST UNIVERSITY OF TIMISOARA, J.H.PESTALOZZI STR.,NR.16,TIMISOARA,ROMANIA TIBISCUS UNIVERSITY OF TIMISOARA, DALIEI STR. NR.1A, TIMISOARA, ROMÂNIA mariamoraru2002@yahoo.com, francadumitru@yahoo.com Abstract: The auditors have a key role in the development of modern economics and accounting rules in progress. Auditing is a profession that has emerged over the years trying to meet the changing needs which public entities have. Public internal audit activities role is to improve public entities providing management advice for the proper administration of public revenues and expenditures. This paper presents the role of internal audit as a tool in changing the mentality of management and employees of entities. Key words: internal audit, public entity, observation, diagnosis, counseling. JEL classification: M42 INTRODUCTION The emergence and development of the audit concept is linked directly to the evolution of accounting and the need for an independent control on information of public interest. Originally, audit emerged from the State’s need to control public finances. Subsequently, the audit experienced a tendency of diversification and expansion and today we are talking about tax audit, production audit, quality audit, and legal audit. Audit is a term used to designate a professional verification of information, namely situations for expressing a competent substantiated and independent opinion on the basis of reporting to a quality standard. 1 The audit must verify whether the necessary conditions are met in order to ensure the balance of an organization, to investigate the dominion of disorder, adaptation to changes and to assess their safety degree and the risks that an entity may encounter. Internal audit is a well organized profession with an increasing influence, retrieved in over 90 national institutes which are part of the Institute of Internal Auditors (I.I.A.) created in 1941. J.B.Thurston, president of the Institute of Internal Auditors, declared in 1941 that the most brilliant perspective of internal audit will be “managerial assistance”. Joseph J Mossis, president of the UK Institute of Internal Auditors said in 1991: “it is clear to those who work within the internal audit function that it has a vital role to play, helping management to take in hand the reins of internal control.” 2 The internal audit function was established in England and France in the early '60s, being strongly influenced by its origins in financial accounting control. In the ’80-’90 the internal audit function begins to take shape in the entities' activities and its evolution continue to this day. 1 Dicţionar de economie, Ediţia a doua, Editura Economică, Bucureşti, 2001, pg.44 2 Jacques Renard - Teoria şi practica auditului intern, Ediţia a IV-a elaborată prin programul UE PHARE, ”Dezvoltarea procedurilor de audit şi control intern în România” sub coordonarea MFP, Bucureşti, 2003, pg.15