The Perceptions Of Managers And Internal Auditors On The Factors Affecting The Effectiveness Of Internal Audit In The Public Sector: A Case Study Of Dodoma Municipality

ABSTRACT

There has been a concern, on the effectiveness of the audit units in the public sector given the way, this unit is considered by the management and the fact that, still in public institutions, embezzlement and misappropriation of funds is rampant. This study was therefore put in place in order to fulfil three objectives namely; to identify main factors influencing internal audit effectiveness, to explore managers and internal auditors‟ perceptions on the perceived factors affecting the effectiveness on internal auditing and to analyze the link between internal auditors‟ effectiveness and the main factors affecting internal audit effectiveness. The study was conducted by using a holistic explanatory case study design by considering public institutions operating within Dodoma Municipality. The study involved eight institutions, namely; Dodoma Municipality, LAPF, CDA, and the Parliament. Others were TAMISEMI, UDOM, IRDP and the Treasury Office in Dodoma. Data were collected from auditors using a questionnaire and from managers using interviews. Furthermore, data were analysed by using both qualitative and quantitative techniques. It was found out that, the main factors which influenced internal audit effectiveness, according to their order of importance are; independence of internal audit unit, management support, size of internal audit unit, competence of auditions and the relationship between the internal and external auditors. It was also uncovered that, of the eight indicators employed in this study, only four were evaluated moderately favourable by respondents. These were competency of the internal auditors in executing their duties, level of effectiveness of internal audit unit, level of quality for the work performed by the internal audit unit and level of satisfaction regarding the effectiveness of internal audit units. Furthermore, the study has not been able to vi establish any relationship between factors of internal audit efficacy and internal audit effectiveness like what have been uncovered by other researchers. Finally, it was recommended that, the Government creates a mechanism to ensure that internal audit units are not operating under the management which they report to. In addition to that, management of public institutions were advised to provide support to the internal audit units in order to make the units operate effectively and should not treat them as watch dogs