Effect of Internal Audit Function on Financial Performance of Microfinance Institutions in Kenya

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dc.contributor.authorBisieri, Bogonko Faith
dc.date.accessioned2024-10-28T09:18:54Z
dc.date.available2024-10-28T09:18:54Z
dc.date.issued2022-06
dc.descriptionMASTER OF BUSINESS ADMINISTRATION in Finance
dc.description.abstractThe purpose of this study was to determine the effect of internal audit function on financial performance in microfinance institutions in Kenya. The objectives of the study were to examine the factors influencing performance of internal auditors, analyze the measures of financial performance used by microfinance institutions in Kenya, and examine the effect of internal audit function on the financial performance of the microfinance institutions in Kenya. The study was anchored on Agency, stakeholder, and contingency theories. The study employed a descriptive survey design and the target population was 47 staff members in the accounting, finance and audit departments of microfinance institutions based in Nairobi that provide both banking and lending services. The study used a census approach where all the 47 members of the target population comprised the sample size. Data were collected from both primary and secondary sources. The Statistical Package for Social Sciences (SPSS) version 23 was used to analyze data into descriptive statistics including frequency, percentages, mean and standard deviation. Financial statements from the target microfinance institutions were also analyzed to explain the financial performance variable. The study found that professional competency at a mean of 4.08, reporting structure at a mean of 4.60 and internal controls at a mean of 4.58 were the major factors influencing performance of internal auditors. It was also found that growth in profitability, return on equity and return on assets were key indicators of financial performance used by MFIs. It was concluded that the auditors in the MFIs had the requisite audit skills required to carry out internal audit tasks. The study also concluded that a significant relationship exists between the internal audit function and financial performance. The study recommends that internal auditors be periodically appraised on the audit standards and be involved in the risk assessment of the organization. Similarly, MFIs should recruit competent internal auditors and provide them with a competitive package to ensure they correctly advise management by producing quality internal audit reports
dc.description.sponsorshipDaystar University, School of Business and Economics
dc.identifier.citationBisieri, B. F. (2022). Effect of Internal Audit Function on Financial Performance of Microfinance Institutions in Kenya. Daystar University, School of Business and Economics
dc.identifier.urihttps://repository.daystar.ac.ke/handle/123456789/5574
dc.language.isoen
dc.publisherDaystar University, School of Business and Economics
dc.subjectinternal audit function
dc.subjectfinancial performance in microfinance institutions
dc.subjectcontingency theories
dc.titleEffect of Internal Audit Function on Financial Performance of Microfinance Institutions in Kenya
dc.typeThesis

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