<![CDATA[This study aims to analyze the effect of internal audit system implementation on audit quality within the Cabinet of Inspection and Audit (CIA) in the MOP and MDRHC. It focuses on how elements such as clear audit procedures, auditor independence, auditor capacity, audit technology, and planning contribute to improving audit outcomes. A quantitative approach was applied using questionnaires distributed to 45 auditors, with 31 valid responses analyzed. Data processing was conducted using IBM SPSS Statistics 16, including validity, reliability, and simple linear regression tests. The findings indicate that all research instruments are valid (r-count > 0.355; p < 0.05) and reliable, with Cronbach’s Alpha values of 0.626 for the internal audit system variable and 0.843 for audit quality. The regression analysis reveals a positive and significant relationship between internal audit system implementation and audit quality (b = 0.925; p = 0.000). The coefficient of determination (R² = 0.575) shows that 57.5% of the variation in audit quality is explained by the internal audit system, while 42.5% is influenced by other factors. These results support the hypothesis that effective internal audit system implementation significantly improves audit quality. The findings align with Agency Theory, Fraud Theory, and Institutional Theory, emphasizing the role of internal control in enhancing transparency, reducing information asymmetry, and preventing fraud. Overall, a well-implemented internal audit system strengthens governance, integrity, and accountability in public sector institutions in Timor-Leste.]]>
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