Perceived Internal Audit Roles and Challenges in a developing economy
Loading...
Date
2017
Journal Title
Journal ISSN
Volume Title
Publisher
Makerere Business Journal
Abstract
The purpose of this study was twofold: 1) to explore the perceived Internal Audit (IA)
roles and challenges faced by internal auditors in fulfilling their mandate among listed firms in
Uganda and 2) to examine the extent to which internal auditor challenges could inhibit the performance
of internal auditor roles.
Design/ methodology – This is an exploratory study with mixed methods design. We collected
data from internal auditors of 13 listed firms in Uganda through both the questionnaire and interview
guide. Data were analyzed using SPSS and XL STAT 2016 with Partial Least Square Modelling
because of the small sample used in this study.
Findings – We find eight (8) most perceived internal auditor roles in Uganda such as ‘internal audit
reports on the system for generating financial information’. Many of these roles suggest that internal
auditors perceive their roles consistent with traditional ones that were designed to safeguard
firm’s assets and assist in the production of reliable accounting information for decision-making
purposes. We also find five (5) most perceived internal auditor challenges such as ‘internal audit
recommendations are not worked on by management’. Furthermore, these internal auditor challenges
explain about 31% variation in perceived internal auditor roles.
Research limitations/implications - As the internal auditors face many difficulties, it is difficult
to see how they could perform their perceived roles effectively and thereafter embark on their
expanded roles as espoused in the model charter of Institute of Internal Auditors (IIA). Although
we employ a relatively small sample size, this study’s findings can be generalized to Uganda and
other similar environments’ listed firms. The results are useful in informing the debates of the
regulators, standard setters, external auditors, academicians and policy makers. If internal audit
function appear incipient in listed firms in this environment, it could be a worthwhile endeavor to
establish what it is like in non-listed firms.
Originality / value – We examine perceived internal auditor roles, internal auditor challenges
and how the latter affects the former using evidence from Uganda – a developing economy. We also
contribute towards a methodological position of mixed methods design by producing results from
a smaller sample augmented by interview results in an environment characterized by smaller populations
so that inferences can be made. The interpretive research agenda caters to social aspects of
internal auditing neglected by positivist studies that largely tackle questions founded in the realist
ontological position.
Description
Keywords
Internal auditor roles, Challenges, Uganda, Listed companies, Partial Least Square Modelling
Citation
Bananuka, J., Mukyala, V., & Nalukenge, I. (2017). Perceived internal audit roles and challenges in a developing economy. Makerere Business Journal