Internal Auditing and Performance of Local Governments in Uganda: A Case Study of Ntungamo District Local Government

ABSTRACT

The general objective of the study was to examine the relationship between internal auditing and financial performance of Local governments in Uganda, a case study of Ntungamo District Local Government the specific objectives were, to find out the role of internal auditing on financial performance of local governments in Uganda, to examine the role of internal auditing on non financial performance of Local governments in Uganda and to assess the role of internal auditing on managerial performance of Local governments in Uganda. The study assessed the role of internal auditing on performance of Local governments in Uganda a case study of Ntungamo District Local Government. It answered three study objectives that included: to find out the role of internal auditing on financial performance, to examine the role of internal auditing on non-financial performance at NDLG and the role of internal auditing on managerial performance at NDLG. The findings of the study indicated that there is a significant relationship between internal auditing and financial performance, non financial performance and managerial performance. Therefore, Local governments should carry out internal auditing in order to improve their financial, non financial and managerial performances and the entire performance in general. The study suggested that more emphasis should be put on internal auditing as results indicate that it promotes organizational performance, there is need to recruit more human resource personnel in the field of internal auditing to improve the performance of the entity since internal auditing promotes organizational performance and that there is need to emphasize on the budget and planning for departments to control measures and enable proper financial reporting in Local governments

TABLE OF CONTENTS

DECLARATION

APPROVAL

DEDICATION

ACKNOWLEDGEMENT iv

TABLE OF CONTENTS

LIST OF FIGURES ix

ACRONYMS

CHAPTER ONE 1

INTRODUCTION 1

1.0 Introduction 1

1.1 Background to the study i

1.1.1 Historical perspective 1

1.1.2 Theoretical perspective 2

1.1.3 Conceptual perspective 2

1.1.4 Contextual perspective 3

1.2 Statement ofthe Problem 3

1.3 Purpose ofthe study 4

1.4 Specific objectives 4

1.5 Research Questions 4

1.7 Scope 5

1.7.1 Geographical scope

1.7.2 Theoretical scope 5

1.7.3 Content scope

1.7.4 Time scope

1.8 Significance of the study 5

1.9 Operational definition ofthe key terms 6

CHAPTER TWO 7

LITERATURE REVIEW 7

Vi

2.0 Introduction .7

2.1 Theoretical Review .7

2.2 Conceptual frame work Model 9

2.3.Related Literature Review 10

2,3.1 The role of internal auditing on financial performance 10

2.3.2 Internal auditing and non-financial performance 13

2.3.3 .Internal auditing on managerial performance 15

CHAPTER THREE 18

METHODOLOGY 18

3.0 Introduction 18

3.1 Research Design 18

3.2 Study population 18

3.3 Sample size 18

3.4 Sampling Techniques and Procedures 19

3.5 Data Collection Sources 19

3.5.1 Primary Data 19

3.5.2 Secondary Data 19

3.6 Data Collection Methods 19

3.7 Research Collection Instruments

3.7.1 Questionnaire 20

3.7.2 Interviews 20

3.8 Ethical consideration 20

3.9 Validity and Reliability 20

3.9.1 Validity 20

3.9.2 Reliability 20

3.lO.Data Analysis 21

3.11. Anticipated limitations of the study 21

CHAPTER FOUR 22

PRESENTATION, DATA ANALYSIS AND INTERPRETATION OF FINDINGS 22

V

4.0 Introduction .22

4.1 Demographic characteristics of respondents 22

4.1.1 Age of the respondents 22

4.1.2 Gender of the Respondent 23

4.1.3 Level of Education of the respondents 23

4.1.4 Level of Experience 24

4.2 The roles of internal audit on financial performance at NDLG 25

4.3 Role of internal auditing and non-financial performance at NDLG 27

4.4 Role of internal audit on managerial performance NDLG 28

4.4.1 Determining the Relationship between internal Auditing and performance of local

governments 31

4.4.2 Regression analysis 32

CHAPTER FIVE 33

DISCUSSION OF THE FINDINGS, CONCLUSION AND RECOMMENDATIONS 33

5.0 Introduction 33

5.1 Discussion ofthe findings 33

5.1.1. Internal auditing and financial performance of Local governments in Uganda 33

5.1.2 Internal auditing and non-financial performance of Local governments in Uganda 33

5.1.3. Internal auditing and managerial performance of Local governments in Uganda 33

5.2 Conclusion 34

5.3 Policy Recommendations 34

REFERENCES 35

APPENDIX I: QUESTIONNAIRE 41

APPENDIX II: INTERVIEW GUIDE 45

APPENDIX III:TIME FRAMEWORK 46

APENDIX IV: ESTIMATED BUDGET 47