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Effect of Internal Audit Practices On Financial Performance in Kenya: A Case of Vihiga County Government

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dc.contributor.author EHAJI, Lumwaji Hesborn
dc.date.accessioned 2020-02-17T13:22:36Z
dc.date.available 2020-02-17T13:22:36Z
dc.date.issued 2019
dc.identifier.uri https://repository.maseno.ac.ke/handle/123456789/1428
dc.description.abstract Financial performance of County governments in Kenya has been rated to be below average, as is evidenced in the 2017/2018 Auditor General’s report, on County governments’ performance. Available information attests to the fact that Audit practices are an inherent function of the operations of all government activities. Audit provides unbiased, objective assessments of responsible and effective public resources management in an effort to achieve intended results, through accountability and integrity, improved operations, and instilling confidence among citizens and stakeholders. Public sector audit not only supports the governance responsibilities of oversight, insight, and foresight, but generally lends to increased performance measurements. Below average performance despite existence of audit functions is therefore an understatement. The Purpose of this study is therefore to investigate the effect of internal audit Practices on financial performance of County governments in Kenya, with specific interest on Vihiga County Government. The study focused on Vihiga county because from the Summary of the report of the Auditor General on financial statements for county governments for the year 2017/2018, Vihiga County executive and the County assembly had had qualified and disclaimer opinions respectively, the county had total pending bills of ksh.1, 881,292,987 and 73 systemic issues affecting them. The specific objectives of the study were to establish the association between risk management practices and financial performance, the contribution of internal environment practices to financial performance; and analyse effect of monitoring and control practices on financial performance. The study was guided by stewardship and Agency theories; where stewardship explains that the executives and managers of an entity work to protect and make profits for the stakeholder and agency explain principal-agent’s relationship. The Cross –sectional correlation design was applied because it has capacity to determine effect, and coefficient contribution of factors on single or aggregate dependent variables. The study targeted population 100 people consisting of Heads of departments, Directors, Chief Officers, Accountants, Internal auditors and Procurement Officers of Vihiga County government. The study employed Krejcie& Morgan (1970) table to determine a sample size of 80 respondents. The study used primary data collected using structured questionnaires. The SPSS version 20 was used in the statistical analysis. Reliability of data collection was realised through consistency measure known as Cronbach’s alpha (ɑ=0.767). Data validity was achieved through liaison of research expert who validated the research tools. The collected data was analysed using correlation, regression, Descriptive Statistics, inferential statistic e.g. ANOVA, the results showed that internal audit practices affect financial performance significantly, evidenced by F-statistics of + 0.679 and therefore the null hypothesis (Ho) that there is no significant relationship between internal audit practices and finance performance is rejected at 0.05 ( 5 %) level of significance. The study has potential to researchers to understand why organizations perform poorly, despite internal audit practices in place; students and academicians may use this study as a basis of discussions on corporate governance practices and how these affect performance en_US
dc.publisher Maseno University en_US
dc.title Effect of Internal Audit Practices On Financial Performance in Kenya: A Case of Vihiga County Government en_US
dc.type Thesis en_US


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