The Impact of Risk Based Audit Approach on the Implementation of Internal Control System: A Case of Government Departments and Agencies in Kumasi Metropolis

Abstract

The main aim of this study was to investigate the impact of risk-based audit approach on the implementation of internal control systems in government departments and agencies in Kumasi metropolis. The objectives of this study were to find out whether Risk-Based Audit Approach (RBAA) is used in implementing internal control activities, whether Risk-Based Audit Approach has influenced internal control activities of government departments and to explore the challenges encountered by RBAA in implementing internal control activities of government departments and agencies in Kumasi metropolis. Among the key findings of this study was that Risk Based Audit Approach is used in government departments and agencies in Kumasi. In government departments and agencies the strategies adopted are; use of risk register, definition of RBAA in the Audit charter, reporting to the committees on department risk exposures, and allocation of resources to internal audit activities, risk management and finance activities. It was also found that the challenges encountered in implementation of RBAA of internal control systems are; lack of relevant knowledge, experience, proper tools to identify risks and relevant principle or guidelines as the main challenges encountered in implementing RBAA. Based on the conclusions above, this research recommends that relevant training should be given to staff on RBAA to equip their knowledge level. Also, adequate proper tools should be provided to identify risks, and audit committees should be established with the mandate of monitoring and evaluating RBAA use and organization of workshops on RBAA activities in public departments and agencies to enhance awareness.