Internal audit includes self-inspection of cost-effectiveness and efficiency of organization;;s business and rule-observance. Internal audit evolved from surveillance to resources to create value for organization and from owner of control power to consultant or coach. In public sector, utilizing internal audit as self-regulating managerial control will be a good alternative to external surveillance. Thus, to prove internal audit can play a role in performance improvement, this study analyzed impact of internal audit performance on organization;;s major performance including effectiveness, productivity, response to client, integrity, and external appraisal. Data used in this study were gathered from public and quasi-governmental institutions. Vigorousness of internal audit, measured by numbers of prosecuted internal audit, has been proved to impact ln(capital productivity) and ln(labor productivity). In addition, administrative action as an indicator for audit quality had an impact on ln(capital productivity), efficiency indicator and action imposed on individuals on efficiency and response to client, respectively. Standing auditor and audit committee as indicators for organizational internal audit structure also had impact on performance. In sum, this study partially proved that internal audit can improve organizational performance in some parts, if it works properly. However, since many of hypothesis are rejected, actual causes hindering internal audit from improving performance should be studied further.
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