Impact of auditing on performance of local governments in Uganda: a case study of Bushenyi Local Government

Abstract

The purpose of the study was to determine the impact of auditing in the financial performance and service delivery of Local Government and was based on three specific objectives which were; to establishing the level of auditing in Local Government, to find out the level of financial performance in Local Government, and to find out the relationship between financial performances and audit risk in Local Government. The study adopted a Cross sectional research design to get both qualitative and quantitative data where questionnaires, interview guides and secondary data for the period under review were used. The target population for the study constituted 50 respondents who were from accounting, auditing, finance and other departments and were obtained by use of purposive sampling. Descriptive statistics such as frequencies, percentages, P-Values and others were used to analyze data. Data presentation was done by the use of tables for ease of understanding and interpretation where data analysis was done by use of STATA. From the findings, the study concluded that there was a significant relationship between financial performance and Audit risk, where Inherent, control, detection and other Audit risks were faced due to weak test and procedures, inexperience of new staff and others which lead to poor service delivery to the public. Financial Performance was mainly affected by corruption through bribery, inexperienced staff who led errors into Financial Statements which lead to poor Financial Performance in Bushenyi Local Govenment. The study revealed loophole and the following recommendations were recommended and these included; designing very strong internal control systems, strong techniques to detect audit risk in Financial Statements, increasing the number of auditor and others to reduce audit risk and improve on financial performance of Local Government.