Factors affecting internal audit effectiveness in the Ghanaian public sector in Central Region

Abstract

The rise in financial scandals in recent times in government institutions and entities despite the existence of internal audit units in the public sector has made the role of internal audit effectiveness to attract the attention of academic researchers, professional bodies, the financial community and regulators. The purpose of this study was to examine factors that influence internal audit effectiveness in the Ghanaian Public Sector. To sample the respondents for the study, purposive and stratified random sampling techniques were adopted and questionnaire was used to solicit information from 130 internal auditors in the study area. The study used Structural Equation Modelling to estimate the factors that influence effectiveness of internal audit. The study found out that, independence of internal auditors, competence of internal auditors and control environment have significant positive influence on internal audit effectiveness in the public sector in the Central Region. However, management support does not have significant positive influence on internal audit effectiveness. The study therefore recommends more regular training and development of internal auditors on new internal audit policies, rules, procedures and also sharing of experiences among internal auditors across various public institutions and organizations. Finally, the study recommends continuous improvement in control environment and independence of internal auditors. With management support, management should be proactive in the provision of all necessary financial, logistic, and human resource for internal audit effectiveness.