Evaluation Of Factors Affecting Internal Audit Effectiveness In Kirinyaga County Government

Abstract

Internal audit, as a function is supposed to provide reasonable assurance of the existence of efficient and effective systems and procedures that support achievement of devolved governments’ objectives worldwide. The Kirinyaga County Government in Kenya is one such affected of County governments which have had qualified audit reports since the year 2013 indicating breakdown in internal audit effectiveness. This study therefore sought to evaluate the factors that affect internal audit effectiveness in Kirinyaga County Government. The study was guided by three objectives; to assess the relationship between internal audit work environment, internal audit independence, monitoring of internal audit and internal audit effectiveness in the County. Agency, insurance, contingency and leading credibility theories were used to establish rationale for internal auditing. The study used descriptive research design. The target population was all the forty six (46) employees of Kirinyaga County Directorate of Internal Audit. Primary data was collected using self-administered questionnaire. Secondary data was collected from reports of the Auditor General, newspapers, The County Strategic Plan, Reports of the County Governments Transition Authority and literature review in relevant journals, magazines and other publications. A pilot study was conducted to enhance the validity and reliability of the data collection instrument. Cronbach alpha coefficient of 0.7 was used to test the reliability of the data collection instrument. Data for analysis was obtained from 41 respondents out of the targeted 46 achieving 89.1% response rate. Results were presented using frequency distribution tables while bi-variate linear regression and multiple linear regressions were used to study the relationship between internal audit effectiveness and the independent variables. The results indicated that internal audit work environment, independence and monitoring of internal audit had positive and significant effect on internal audit effectiveness in the County Government when considered singly and when combined. The results further indicated that internal audit function is not adequately supervised by audit committee and internal audit plans are not regularly reviewed. The study recommends that the County Audit Committee should adequately supervise and regularly appraise internal audit plans and activities and enhance internal audit work environment, independence and monitoring of internal audits for effectiveness. Future research could focus on evaluating the factors that affect internal audit effectiveness in the national government.