Effect of Computerized Accounting Systems on Risk Based Internal Auditing in Homa Bay County Government, Kenya

Abstract

For several centuries, internal auditing has been believed to be helping firms in protecting financial resources and assess recognized internal control measures with the key concentration being control awareness and monitoring. Similarly, internal auditors are endured, and have not been treated with esteem in most organizational control. The advent of contemporary operational and commercial risks has obligated various companies to articulate policies and to upraise the standing of internal audit. Though a change of internal auditing from system based internal auditing to risk based internal audit has been applied extensively with the developed nations in the centre stage, previous research in internal audit has explored objectivity issues in relation to computerized accounting systems. The financial performance requires suitable risk based internal audit practices hence efficient and effective internal audit. In this study the researcher sought to find the effect of computerization in relation to RBIA in the county government of Homa Bay, Kenya. This study adopted descriptive survey research for it best explains the explicit occurrence in its contemporary tendencies, modern measures and connections among dissimilar aspects at the present. The target population for the study constituted of 60 respondents who were finance officers, internal auditors, the information technology officers, relationship officers/managers and accountants. The study administered questionnaires which comprised of structured and unstructured queries to all the respondents since it was the best suitable instrument to collect data. From the findings, the study concludes that RBIA over risk valuation/assessment, risk profiling, and yearly risk based audit planning and auditing staffing should be enhanced transparency and accountability in computerized environment, hence enhancing financial procedures. The study recommends that policy makers in the county government of Homa Bay in Kenya should adopt effective computerized accounting systems in implementation of risk based internal audit practices such as risk profiling, risk assessment, annual risk based audit scheduling, internal auditing standards/policies and auditing recruitment to enhance effective and efficient financial performance.