Internal auditing and financial performance of public institutions in Kenya: A case study of Kenya Meat Commission

Abstract

Internal auditing provides audit services to the management at all levels, including board of directors and audit committee, thus improving the organizations corporate governance. The objectives that guided the research were effect of corporate governance on financial performance and effect of audit committee on financial performance. The researcher used case study research design; this was due to the fact that data was collected from one organization only, that is, Kenya Meat Commission (KMC). The sample size was all fifty seven management staff at KMC. Open and close ended questionnaires were used to collect primary data from the respondents. The data collected was quantitative. Descriptive statistics, time series and regression analysis were used to analyze the data. The data was presented in the form of tables. The data collected ascertained that internal auditing plays a major role in the financial performance. The findings of this study, however, are at odds with the aforementioned position. The researcher found that the relationship between the internal audit function existence and financial performance at the KMC was insignificant. That is, existence of internal auditing does not influence the profitability and return on investment. The researcher recommends that the internal audit function should be more independent and manned by competent staff. There should also be an independent oversight body to oversee the operations of the state corporation.