THE IMPORTANCE OF ESTABLISHING AND DEVELOPING INTERNAL AUDIT IN HIGHER EDUCATION INSTITUTIONS IN BOSNIA AND HERZEGOVINA

Abstract

Higher education in Bosnia and Herzegovina faces significant challenges related to transparency, accountability, and governance quality. In this context, the development of internal audit systems has become an important mechanism for strengthening institutional integrity and improving overall performance. Internal audit contributes to the efficiency of processes, transparency in financial management, and compliance with legal and strategic obligations. However, its implementation remains uneven, and its role is often insufficiently recognized or integrated into governance structures.This paper examines the importance of establishing and developing internal audit in higher education institutions in Bosnia and Herzegovina, focusing on key challenges, systemic shortcomings, and areas for improvement. The aim is to analyse how internal audit principles, risk management practices, and alignment with European standards can enhance governance quality in the higher education sector. The study is based on empirical research exploring employees’ perceptions of the role and importance of internal audit, its impact on institutional performance, and the level of trust in internal processes. The findings indicate a high level of awareness regarding the importance of internal audit, but also reveal challenges that limit its full development. Key weaknesses point to the need for stronger human and institutional capacities, improved standardization, and better alignment with European requirements. Overall, the results confirm that strengthening the establishment and continuous development of internal audit can significantly enhance transparency, accountability, and long-term sustainability in higher education, providing a foundation for modernization and more effective governance.