Determinants of Internal Audit Quality in Metropolitan, Municipal and District Assemblies in Central Region

Abstract

The motivation for the study was the infractions cited by the Auditor General in the audit report of Metropolitan, Municipal and District Assemblies (MMDAs) from 2014 to 2018 as well as the Auditor General’s Report on Management and Utilization of District Assemblies’ Common Fund and other Statutory Funds from 2015 to 2018. The study examined the influence of competence, independence, nature of work performed, management support and stakeholder perceptions of internal audit staff on internal audit quality. Stratified random sampling was employed for data collection from one hundred and sixteen internal audit staff, management and other stakeholders of MMDAs in the Central Region of Ghana. Descriptive statistics was used to analyze objectives and multiple regression was employed to test the hypotheses of the study. The results of the study revealed that competence, independence, management support, nature of work performed by the internal audit staff and positive stakeholders’ perception of internal audit staff positively affect the quality of the internal audit work. The study affirmed inspired confidence theory which states that an auditor must be independent and professionally competent to enhance audit quality. The study recommends that MMDAs should enhance the competence of the internal audit staff through professional training and provide adequate resources to enable internal audit staff enhance the quality of their activities.