Abstract:
The study was conducted to assess the internal audit effectiveness and its
relatedness with financial performance of selected non-banking financial
institutions in the Ashanti Region of Ghana. The study adopted an
observational cross-section descriptive survey approach aimed at ensuring the
thorough capture of details on the internal audit efficiency and financial
performance situations without influencing the study environment. Purposive
sampling technique was employed in collecting information from the staff of
thirteen selected non-banking institutions. Close ended semi-structured
questionnaires were used in obtaining data on issues pertaining to internal
audit effectiveness whilst open-ended questionnaires were used to obtain data
on financial performance indicators. Responses from questionnaire
administration were analyzed using the Statistical Package for Social Sciences
(SPSS) analytical tool, version 16.0. Both descriptive statistics and inferential
statistics were obtained for the purpose of the study. The study found a
significant level of internal audit competency (around 55 percent), a fair level
of management support to ensure non-banking financial institutions' internal
audit effectiveness, and a high positive association between internal audit
competency and non-banking financial institutions' financial performance.
Internal audit independence was also found to be positively related to financial
performance. It was thus recommended that board and management of non-banking financial institutions ought to maintain adequate audit staff size, and
strictly adhere to strategies aimed at promoting internal audit competence,
independence and management support systems
