School of Business

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Subject: search.filters.subject.Internal Audit

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    Effect Of Internal Audit Practices On Fraud Risk Management In State Corporations In Kenya
    (Kca University, 2017) Obonyo, Beatrice A.
    Most internal audit functions of many organizations have adopted practices of fraud risk management yet fraud is still prevalent and occurrences are reported. The fraud problem in all its forms; corruption, asset misappropriation and fraudulent financial reporting registers a continuous upward trend. Fraud is an emerging problem affecting public organizations and private companies as well in all the countries and all the industries/sectors. The response to the fraud problem stands not just in the regulatory environment and the supervision bodies’ monitor, but first of all in the companies’ awareness that fraud does happen and there is a stringent need to proactively manage fraud risk. This study sought to establish the extent to which internal audit practices contributes to success of fraud risk management in State Corporations in Kenya. The target population was all state corporations in Kenya; Stratified random sampling was used to sample the state corporations under study. Structured questionnaires were used to collect data which was then coded and analyzed. 40 state corporations were sampled for the study and out of these 33 responded which gave a response rate of 82.5%. The researcher found that fraud policy had a combined mean of 3.19, standard deviation of 1.072, variance of 1.149 and a Pearson Chi-Square statistic of 0.001; Periodic assessment of fraud risk exposure had a mean of 3.13, standard deviation of 1.1.0, variance of 1.217 and a Pearson chi-square statistic of 0.582; Fraud prevention had a mean of 2.92 , standard deviation of 0.956, a variance of 0.915 and a Pearson chi-square statistics of 0.319; Fraud detection had a mean of 2.93, standard deviation of 0.912, variance of 0.832 and a Pearson chi-square statistic of 0.005. The study concludes that internal audit practices; fraud policy, periodic assessment of fraud risk exposure, fraud prevention and fraud detection when combined contributes to success of fraud risk management in state corporations in Kenya. The researcher recommends that State corporations should promote fraud policy as part of their key policies in terms of governance and strengthen their measures as a way of facilitating internal audit in the organization. To ensure successful fraud risk management; State corporations must analyze and assess periodic fraud risk exposure in the organization as a way of promoting internal audit that may positively impact on the institutions success on fraud risk management; State corporations to put in place appropriate measures of fraud prevention that may help effective and efficient internal audit that supports on the success fraud risk management and lastly that state corporations must assess all the internal and external environment to help in fraud detection and enable the organization administer and post a successful fraud risk management.
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    Effect Of Internal Audit on Reduction of Fraud on State Corporations in Kenya (Case of State Corporations in Nairobi CBD)
    (KCA University, 2016) Chungani, Hamred
    Although internal auditing in state corporations in Kenya is intended to eradicate misuse of the entities’ funds, fraud reduction has not been so successful, raising questions on its effectiveness. More often than not funds are lost and such lost funds are never recovered due to rampant fraud in these corporations. In Kenya, state corporations have been reported to be ineffective and corruption has led to their closure. The failure to ensure fraud reduction is attributable to weak internal auditing system of state corporations in Kenya. This then result into financial losses of these organizations. This means that weak internal auditing provide avenues for fraud in these organizations, which challenges the performance of these state corporations in Kenya. Studies have been carried out locally, regionally and globally on internal auditing and fraud. However, there is scanty information on fraud reduction of state corporations in Kenya as being as being influenced by audit staff competence, attributes of the audited, independence of the internal audit staff and objectivity of individual audit staff. This is despite the fact that there has been uncontrolled occurrence of fraudulent acts that have continued to challenge the performance of the state corporations in Kenya. It is in this light that the study sought to fill the existing gap by carrying out a research on the role of internal audit in fraud reduction on state corporations in Kenya. The study used descriptive survey and had the 64 state corporations in Nairobi CBD as its target population. Since the target population was easily reachable and accessible, the study used census during data collection. The data was analyzed using descriptive statistics on SPSS 20.0.The study found that that state corporations in Kenya fraud reduction in their state corporations is by caused internal audit. The main factors leading to this effect include; internal audit staff competence attributes of the audited, internal audit objectivity factors and internal audit staff independence. The study concludes that; internal audit staff competence, attributes of the audited, internal audit staff independence and internal audit objectivity highly influences fraud reduction of state corporations in Kenya. The study concludes that; internal audit staff competence attributes of the audited, internal audit staff independence, and internal audit objectivity factors, are useful in predicting fraud reduction of state corporations in Kenya. The study recommends that the state corporations in Kenya should come up with standards and policies that ensure staff competence, and ensure continuous assessments on the staff competency by qualified and recognized bodies and ensure frequent on job training of its audit staff to ensure vast experience in auditing of its staff. The study further recommends that state corporations in Kenya should allow their internal audit staff gain full access to all activities, records and properties, and have unrestricted access to all activities, records and properties, and ease of access to required records required for auditing. Further, the study recommends that there should be regulations and policies to internal audit staff independence and objectivity.
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    The Role Of Internal Audit In Promoting Organizational Performance Of Commercial State Corporations In Kenya
    (KCA University, 2023) Oyagi, Agnes K.
    Many state enterprises in Kenya have recently suffered poor performance patterns, which has jeopardized the sustainability of most of these vital institutions. Some state corporations have a reputation for repeatedly producing poor results, relying excessively on the exchequer, and losing their viability. The study's specific goals were to ascertain the extent to which audit quality affects the organizational performance of commercial state corporations in Kenya, to investigate the impact of audit independence on those organizations’ performance, and to ascertain the impact of audit standards on those corporations' performance. At a 95% level of confidence, a similar number of hypotheses were developed and tested. Three theories served as the study's foundation: the agency theory, the contingency theory, and the auditor's theory of inspired confidence. In this Cross-sectional study, descriptive, and correlational research designs were used. The study's target population consisted of all commercial state corporations, The study used primary data giving a total of 33 targeted respondents out of which 31 were filled and returned. The questionnaire was used in data collection. Data were summarized using descriptive statistics, by use of frequencies and percentages (%), while the causal relationship between the variables was determined using inferential statistics, using correlation analysis (R-value) and regression analysis (beta coefficients, R2 & p values). For ease of comprehension and interpretation, the collected data were analyzed using SPSS version 20.0 and Excel and then presented as tables and figures. The results showed that audit standards (β = 0.399, p=0.001), audit independence (β = 0.326, p=0.009), and audit quality (β = 0.254, p=0.018) all significantly and positively affect the organizational performance of commercial state firms in Kenya. Therefore, the study draws the conclusion that audit standards, audit independence, and audit quality all significantly and favorably affect the organizational performance of Kenyan commercial state firms. The study advises policymakers to pay great attention to internal audit, particularly in monitoring and evaluating procedures to ensure quality standards. For accountability and openness, the study advises routinely monitoring the audit department. The results of the study suggest that risk analysis be encouraged at the level of individual enterprises as well as across the whole range of functions and extensions of the established organization. The researcher suggests that commercial state organizations might improve the quality of their audits by creating and putting into practice methods to assess the auditor's likelihood to find and disclose errors.