Influence of Internal Audit on Effective Financial Management at the Cape Coast Metropolitan Assembly

Nuhu Alhassan

doi:10.6007/ijarbss/v8-i9/4673

Abstract

The purpose of the study was to investigate the influence of internal audit on the effectiveness of financial management at the Cape Coast Metropolitan Assembly (CCMA), Central Region of Ghana. The correlational research design was used for the study. The study population was 123 while the sample size for the study was 100. The lottery method of simple random sampling procedure was used to select the respondents. Questionnaire was used to collect data. The Cronbach alpha reliability coefficient of the questionnaire was 0.851, which was deemed appropriate and significant. The data were analysed using inferential statistics. The findings of the study revealed that determinants of internal audit (independence of internal audit, internal controls, professional competence and internal audit standards) have statistically significant influence on effective financial management at the CCMA. It is recommended to government through the Ministry of Local Government and Rural Development, and the management of the various MMDAs to ensure that internal auditors within the various MMDAs continue to update themselves with the changing times and technologies and sharpen their skills. Also, they should ensure that internal auditors within the assemblies are independent, qualify and act professional such that they will not be under the control of the Chief Executive but part of the management team.

Highlights

The concept of internal audit has served as a simple administrative procedure comprised mainly of checking documents, counting assets, and reporting to board of directors, management or external auditors
The study chose the staff of the Cape Coast Metropolitan Assembly (CCMA) as its population because they are the most appropriate group of elements to express their views on internal audit and its influence on effective financial management at the assembly
The first specific objective of the study focused on the relationship that exists between the four determinants of internal audit and the effectiveness of the assembly’s financial management

Summary

Introduction

The concept of internal audit has served as a simple administrative procedure comprised mainly of checking documents, counting assets, and reporting to board of directors, management or external auditors. The concept of internal audit refers to an independent, objective assurance and consulting activity designed to add and improve an organisation’s operations (Dawuda, 2014). It helps an organisation to accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management control, and governance processes (Musa, 2015). Both public and private organisations have to demonstrate accountability in the use of shareholders or citizens money and efficiency in the delivery of services. Organisations, especially public ones, demand great competency and professionalism from internal audit, and scarce resources must be deployed more efficiently to minimise and manage risks. In many public institutions staff are poorly paid and unmotivated, ethical standards are weak, and governance practices are ineffective leading to asset mismanagement (Obert & Munyunguma, 2014)

Methods

Results

Conclusion