Determinants of Internal Audit Effectiveness in Selected Hospitals within the Kumasi Metropolis

International Journal of Research and Innovation in Social Science (IJRISS) | Volume III, Issue VII, July 2019 | ISSN 2454–6186

Determinants of Internal Audit Effectiveness in Selected Hospitals within the Kumasi Metropolis

Armstrong Ephraim Awinbugri¹, Yidana Daniel²

¹Exams Officer, Department of Business Studies, Kessben University College-Ghana
²Senior Audit Assistant, PKF-Accountants and Business Advisers, Kumasi-Ghana

Abstract:-The study examined the Determinants of Internal Audit Effectiveness in Selected Hospitals within the Kumasi Metropolis using qualitative study. Primary data in the form of administration of questionnaire to (60) respondents was used.
The discovered that internal audit units of the four selected hospitals were effective in the discharge of their duties and further observed that, the determinants of Internal Audit effectiveness included amongst others(arranged chronologically): Higher salaries and incentives of internal auditors (motivation) with a mean score of 2.10, Organizational Independence also had an average score of 1.77, Effective internal controls scored 1.71 as a third variable of internal audit effectiveness determinant, Adequate internal audit charter and frequent internal audit meetings both came fourth and fifth scoring an average of 1.61 respectively, Competent internal audit staff came sixth with a mean score of 1.35, with last but not least being management support which also scored an average mark of 1.29.
Based on the findings of the study, the researcher recommended that there should be separation of powers between the appointing authority of internal auditors and those in charge of determining their incentives and remuneration so as to ensure total independence of internal auditors.

I. BACKGROUND OF THE STUDY

Good corporate governance system in every organization requires the establishment of internal audit unit. The value and the need to focus on improving strong corporate governance have augmented due to series of corporate failure (bankruptcy and fraud) and financial scandals like earnings restatement to ensure financial reporting quality (Zeleke Belay, 2007). These corporate upheavals have driven external regulators to find ways of promoting greater accountability, disclosure and transparency. The main role of corporate governance is to restore the trust and market confidence as well as shareholders. (Carl Rosen, 2010). It has been widely recognized that the role of the internal auditor becomes a continuing contributor in terms of developing good corporate governance practices and structure. There is evidence that an effective internal audit function enables the board to perform its corporate governance duties through organizational involvement, assessment, training, professional guidance and communication at all levels within the organization (Kenneth D’Silva, Jeffrey Ridley, 2007).

Read More