ASSESSMENT OF INTERNAL AUDIT FUNCTIONS ON IMPROVEMENT OF FINANCIAL PERFORMANCE A CASE OF PUBLIC INSTITUTIONS IN TANZANIA

Abstract

ABSTRACT This research report aimed to assess the functions of internal audit on the improvement of the financial performance of Public Institutions in Tanzania. The study employed an exploratory single case study design to assess internal audit functions on the improvement of the financial performance of Public Institutions in Tanzania and used a mixed research approach because the researcher is a novice in the research profession. The sample consisted of 80 respondents, including top management, internal auditors, accounts department personnel, managers, human resources staff, and other employees in the public institutions in Tanzania. Furthermore, a purposive sampling technique was used to select key respondents as the internal audit directly relates to their areas of responsibility. The study used techniques like questionnaires, interviews and documentary analysis to enable the collection of sufficient and correct information regarding the elements influencing the efficiency of the internal audit functions at public institutions in Tanzania. The findings indicate that 60 (or 85.7%) of respondents consider the effectiveness of the internal audit function within the selected public institutions. These results reveal that a substantial number of the respondents agreed with the identified factors that are believed to enhance the internal audit function's effectiveness. Furthermore, the findings revealed that 55 (or 80.3%) of the respondents agreed that the internal audit unit's audit competence and quality contribute to the effectiveness of the internal audit function in the selected public institutions. Finally, the study assess top management support that influences the effectiveness of the Internal audit in selected public institutions. The findings indicate that 62 (or 87.9%) of the respondents agreed that top management supports the internal auditor's practices and value of internal audit for the effectiveness of the internal audit function. The study concluded that, internal auditing plays an indispensable role in promoting institutional accountability, ensuring effective financial management, and upholding organizational integrity within public institutions. However, several critical areas necessitate further exploration and improvement. The study recommends that to improve the effectiveness of the internal audit function in the public sector of selected public institutions, auditors in public sector institutions should have independence within the internal audit function, allowing them to report all critical findings without interference from management. Secondly, governments should promptly upgrade their systems to encourage internal audit staff to use computer-based auditing techniques.