Effects of internal auditing on organisational performance

Abstract

The study investigated the effect of internal auditing on organizational performance and was carried out at Makerere University Kampala. The main objective of this study was to examine how the operations of internal auditing have an effect on the performance of organizations. Specifically, the study examined the effects of internal audits on organizational adherence to laws and regulations, effects of internal audits on management and reporting of financial information and examined the effects of internal audit on organizational auditor’s professional practices. To achieve this, the study used a self-administered questionnaire to collect data from employees of Makerere University. The findings of the study revealed that there was adherence to laws and regulations due to audit controls, management ensured that the management and reporting of financial information was used optimally. It was also observed that organizational auditor’s practices were perfectly maximized and respected by management as required. The study recommended that management should ensure that internal auditing is often seen as an independent, objective assurance and consulting activity, which should be optimally used to reduce, avoid or mitigate risks, add value and improve an organization’s operations and lead to improved performance. It also recommended providing of reports on activities by different departments, training of staff and giving support to managers in improving overall organizational performance. Future research studies should also focus on a wider geographical coverage and widen its content scope to cover the effect of internal auditing in both private and public institutions.