Factors That Contribute to the Effectiveness of the Internal Audit Function as a Corporate Governance Mechanism in Public Universities in Kenya: (a Case Study of the University of Nairobi)

Abstract

The purpose of the study was to establish the factors that contribute to the effectiveness of the internal audit function as a corporate governance mechanism in public universities in Kenya. The study set to provide an understanding and appreciation of the factors that are necessary for the Internal Audit Function to be effective, and how best the function could be made to contribute to the promotion of Good Corporate Governance in public institutions in Kenyan. A case study design was adopted, and the UON was chosen for the study. To address this purpose, the study sought to answer the following research question: what is the perception of the internal auditors at the UON on the factors that contribute to the effectiveness of the internal audit function. The target population for the study was all the Internal Audit staff in the internal audit department of the UON. A total of 40 respondents were targeted. The dependent variable was the Effectiveness of the Internal Audit Function, while the independent variables were: Professional Proficiency of Internal Auditors, Quality of Audit Work, Organizational Independence, Career and Advancement, and Top Management Support. The researcher analyzed the collected data using descriptive statistics and presented the presented the data in terms of percentages, frequency distribution and charts. The findings from the study were that various factors contribute to the effectiveness of the internal audit function as a corporate governance mechanism in public universities. These factors range from professional proficiency of internal auditors, quality of audit work, organizational independence, career and advancement and top management support. The study findings were similar with those in existing literature reviewed; hence the conclusion that an effective internal audit function contributes to corporate governance to a great extent. The research findings indicated that there was a positive relationship between the variables, and that the effectiveness in internal audit function in public universities can be explained by the identified factors. The study recommended that there was need to invest in the internal audit function of organizations, as this was bound to contribute to the enhancement of the corporate governance structures. The study suggested that future research should focus on all public universities in Kenya, and that a broad based study on role of Internal Audit on organizational performance in both private and public organizations should also be carried out in future.