The Impact of Professional Competence &amp; Staffing of Internal Audit Function on Transparency and Accountability Case of Zimbabwe Local Authorities

Moses Jachi ,Lucky Yona

doi:10.7176/rjfa/10-8-15

Abstract

The study aimed at investigating the impact of internal audit function competence & staffing on transparency & accountability in Zimbabwe local authorities. The study adopted professional competence & staffing as the independent variable and transparency & accountability as the dependent variable. Survey data was obtained from management and internal audit personnel from local authorities in Zimbabwe using semi-structured questionnaires and focus group discussions. Questionnaire responses were obtained from 182 respondents. Two focus group discussions were held separately with 13 senior managers and 8 Chief Audit Executives from local authorities in Zimbabwe. Regression and multivariate analysis were used to test the hypothesis that internal audit function professional competence & staffing is positively associated with transparency & accountability in Zimbabwe local authorities. The study established that there is a significant positive relationship between internal audit function competency dimensions of qualification, experience and training and transparency & accountability in Zimbabwe local authorities. The study reveals the need to improve and uphold internal audit function competency through creation of an enabling environment to support internal audit functions and guarantee their effectiveness in upholding corporate governance practices. The study recommends the establishment of a centralized Local Government Internal Audit Agency under the Ministry of Local Government, Public Works and National Housing, responsible for coordinating, supervising, monitoring and reviewing local authorities internal audit functions as a stride towards improving public finance management systems and corporate governance practices within the country’s public sector. Keywords: Professional Competence & Staffing, Internal Audit Function, Transparency & Accountability DOI : 10.7176/RJFA/10-8-15 Publication date : April 30 th 2019

Highlights

Contemporary internal audit literature accentuates the need for an improvement in the quality of internal audit function so as to guarantee its effectiveness (Mihret & Yismaw, 2007), to match its value proposition (Lenz & Sarens, 2012; Endaya & Hanefah, 2013; Lenz & Hahn, 2015)
Results on table 8 below shows internal audit function competency dimension of qualification & experience with a positive result (Beta 0.047), being significant at 0.05, meaning that internal audit function professional competency as determined by internal auditors’ qualifications & experience positively influences the existence of an organizational policy authorizing internal audit. This leads to the conclusion of rejecting the null sub-hypothesis (H3b) that internal audit function professional competence & staffing is negatively associated with the existence of an organization policy authorizing internal audit
The study investigated the impact of professional competence and staffing of internal audit function on transparency and accountability in Zimbabwe local authorities

Summary

Introduction

Contemporary internal audit literature accentuates the need for an improvement in the quality of internal audit function so as to guarantee its effectiveness (Mihret & Yismaw, 2007), to match its value proposition (Lenz & Sarens, 2012; Endaya & Hanefah, 2013; Lenz & Hahn, 2015). The internal audit profession has recently been seen to play a very important role in upholding corporate governance best practice requirements (IIA, 2016), the profession had shifted towards a proactive and value addition approach, a development that has generally changed stakeholders’ view of the profession (Arena & Azzone, 2009; Mihret, et al, 2010; Soh & Martinov-Bennie, 2011; Lenz & Hahn, 2015) This new approach has fostered the profession to look beyond compliance to improvement of the overall organizational performance and governance (Chambers, 2014; IIA, 2016). The Performance Standard 2100 of the International Standards for the Professional Practice of Internal Auditing (2012) mandates internal auditors to have the capacity to evaluate and contribute to the improvement of organization wide governance, risk management and control processes (IIA, 2016)

Methods

Results

Discussion

Conclusion