Effect of internal audit practices on organization performance:A case of regulatory bodies in Kenya

Abstract

For a large portion of its history internal control has served as a straightforward managerial strategy involved primarily of checking archives, numbering resources, and answering to Board of Directors, Management or External Auditors. As of late, be that as it may, a blend of various powers has prompted to a calm upset of the calling. Associations need to show responsibility in the utilization of shareholders cash and effectiveness in the conveyance of administrations. Associations now request awesome competency and polished methodology from interior review, and rare assets must be conveyed all the more proficiently to minimize and oversee dangers. An internal control framework includes the entire system of frameworks set up in an association to give sensible certification that hierarchical targets will be accomplished. The study aimed to investigate the effect of internal audit system on organization performance with focus to regulatory bodies in Kenya. The study investigated whether control environment, risk evaluation, internal auditing and control activities influence performance of regulatory bodies in Kenya. The study aimed to analyze the effect of internal audit system on organization performance with focus to regulatory bodies in Kenya. The target population of the study was employees of from 265 regulatory Bodies. The study employed stratified sampling technique in coming up with a sample size of 53 respondents where one respondent was targeted in each organization. The primary data collection method was used in collecting information through use of a questionnaire. The collected data was analyzed using regression analysis and descriptive statistics using SPSS version 20 and presented through percentages, means, standards deviations and frequencies. The findings were presented in form of frequency tables and figures while data was presented in prose. Multiple regression analysis was also used to establish the relationship between the dependent and independent variables. The study found that risk management was not significant in predicting the organization performance in regulatory bodies with p-value = -0.007. The regression coefficient of risk management is negative and insignificant in predicting the organization performance. This implies that a unit increase in risk management with lead to -0.752 will lead to decrease in organization performance. Further the study found that control environment had a significant co-efficient with a p-value of 0.242. The regression coefficient of control environment was positive and significant in predicting organization performance. This implies increase in control activities by a unit leads to increase in organization performance by 0.262. the study further found that Control activities had significant correlation with organization performance with p-values greater than 0.005 with a p-value of 0.009. The regression coefficient of control environment was significant in predicting organization performance. Thestudy recommends risk assessment appraisal ought to be directed at the level of individual organizations and over the wide range of exercises and auxiliaries of the merged association. The concentrate additionally suggests that where an endeavor has ecological contemplation as some of their destinations it is totally vital and fitting that inside control ought to encourage the guaranteed accomplishment of those goals. Finally, the study recommends that internal control ought to be viable when analyzing outline can to a great degree valuable to guarantee a shielding assets and favorable exchanging climate particularly bookkeeping approach, administration arrangement, and operational strategy.