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Internal Audit And Financial Accountability In County Governments Of Western Kenya: Applications Of Internal Audit Competence

Volume 5 - Issue 10, October 2022 Edition
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Author(s)
Ojili Justus, Atieno Margaret, Ouma D.
Keywords
Internal Audit: Financial Accountability: County Governments
Abstract
Internal audit is a critical aspect in all organizations as it aids in efficiently and effectively managing public resources. Auditor general report has established that many county governments are still facing challenges of resource allocation and misappropriation of funds which has increased the need for internal audits in all county governments. The main objective of this study was to evaluate the effect of internal audits on financial accountability in county governments of western Kenya. The specific objective was to determine the influence of internal audit competence on financial accountability in county governments of western Kenya. The study was guided by fraud triangle theory. The study's target population was 194 respondents composed of; 67 cabinet executive committee members for finance, 4 director of internal audit services, 4 principal auditors, 36 audit assistants and 83 accountants in four county governments of western Kenya. A correlational research design was used. Proportionate stratified random sampling was used to select respondents. Primary data was collected through questionnaires and secondary data through analysis of auditor general reports. Kisumu county government was used for a pilot study. Cronbach’s Alpha was used to test reliability. Experts and factor analysis were used to test validity. Data were analyzed using SPSS version 26 with the aid of descriptive and inferential statistics. Multiple regression analysis indicated that, internal audit competence had a significant influence on financial accountability by reducing the unsupported expenditure with a coefficient of -0.246 and p-value of 0.021 being less than 0.05. The study depicted that internal audit competence had a significant influence on financial accountability with an R2 of 0.346 and derived f statistics of 3.89 that was more than f critical of 2.45. Therefore, the study concluded that internal audit competence improvement improves financial accountability by reducing unsupported expenditure. The study recommended that management of the county governments should employ experienced auditors.
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