Face to face interview is chosen because it gives the researcher the opportunity to make observations and seek further explanations. Internal auditors, management members and other staff members will be interviewed. Information on working relationship between internal auditors, management and other staff members and information on their good and bad experiences was gathered.
Many questions or information cannot be asked or gathered during interview because of time constraints. Questionnaire is chosen to give respondents ample time to answer questions pertaining to the research to help in the achievement of set objectives. It was distributed to internal auditors, management members and other staff members. To know the current situation of internal auditing in public institutions and also challenges internal auditors face as well as problems other staff members and management have about internal auditors.
Survey research design was used to gather information. Gathering of information or data for this research is very important; the primary data was obtained through the administering of questionnaire, conducting of interviews and observation on the field. Secondary data was gathered by reviewing documents such as internal controls, policies, procedures, laws, rules, regulations and Acts.
Three (3) public institutions from the health and education sectors in Kumasi in the Ashanti region of Ghana was used for this research (Kumasi Technical University, Komfo Anokye Teaching Hospital and University of Education, Winneba, Kumasi Campus). The questionnaire is designed in two categories, one for internal auditors and another for other staff members including management members. This was done in order to get the views and thoughts of internal auditors and other staff members to help in answering the research questions.
A total of 100 questionnaires were distributed. It has three sections, the first is about whether internal audit departments are well established, it looks at the availability of resources, the condition of service of internal auditors, the existence of audit documents for execution of their duties, the training of internal auditors.
The second is on management support, that is, management giving internal auditors the independence to operate, implementation of internal audit recommendations, involving of internal audit in decision making and the third is on policies, laws and regulations.
The last section is about internal controls, policies, procedures, rules, regulations, code of conduct and laws in the public institutions.
The data gathered from the questionnaires and interviews were analyzed with their significance to the hypothesis. Simple percentages were used for the analysis.
The following hypotheses were formulated to help obtain the objectives of the research.
H1 Management support and independence of internal auditors to operate has an influence on effective internal auditing.
H2 Availability of resources, better training, internal controls and good working relationship are essential to ensure effective internal auditing.
A total of 100 questionnaires were distributed and 80 questionnaires were received representing 80%, deemed fit for the research. The 80 respondents had 30 being internal auditors representing 37% and 50 being other staff members representing 63%.
16 internal auditors had worked from 1-10 years representing 53.3% and 14 had worked from 11-20 years representing 46.7% indicating they have the required knowledge to execute their duties diligently and also the information gathered is accurate.
Internal Audit Agency Membership
According to the data gathered out of the 30 respondents that are internal auditors, 18 respondents representing 60% are not registered members and 12 respondents representing 40% are registered members of the Internal Audit Agency of Ghana,. This indicates not much internal auditors are registered members. This is an agency solely for the welfare of internal auditors and they must be part to have access to training programmes and other necessary documents.
Management Follow Policies
80% of respondents said management follows policies, procedures and internal controls and 20% said management does not.
Implementation of Recommendations
56.7% respondents said management does not implement recommendations made in internal audit reports, they do not write to explain either and 43.3% said management implement the recommendations.
Interviews conducted by the researcher revealed that management support is an important factor in the activities of internal auditors in the public institutions. Management members play vital role in public institutions, making decisions, establishing policies and procedures, internal control, governance process and they control the entire operations to ensure that activities done are channeled to the achievement of set objectives. Management supports internal auditors by seeking advice from internal auditors, following policies, procedures, rules and regulations.
Independence of Internal Auditors
53% respondents said the rate of independence of internal auditors is strong, 30% respondents said the rate is very strong and 17% respondents said the rate is weak. This indicates that internal auditors have the independence to execute their duties.
According to internal auditors that were interviewed, effective internal auditing involves the independence of internal auditors to operate. They need to have absolute independence to audit any department or section of the institution in order to improve the various sections, also restriction prevents internal auditor to detect or prevent fraudulent actions in the restricted sections or departments.
Availability of Resources
76.7% respondents said resources are available and 23.3% respondents said resources are not available. This is good.
Internal Auditing Seminars
70% respondents said internal auditors attend internal auditing seminars and 30% respondents said otherwise which is good.
Condition of Service
67% respondents said the state of condition of service for internal auditors is good, 20% said its bad, 7% said its worse and 6% respondents said its better. This indicates the condition is good.
Relationship Between Management and Internal Auditors
97% said there is a cordial relationship between management and internal auditors and 3% said otherwise. This indicates that there is good working relationship.
The organization of internal audit seminars is necessary because it gives internal auditors the opportunity to explain their purpose, activities in order for other staff members to have a deep understanding of what internal auditing is all about. This will change the mind set of many that thinks internal auditors are intruders, police and they are always looking for people to blame for issues at the workplace. Other staff members will cooperate by making the necessary documents available, not hindering information and internal auditing will be simple, easy and beneficial to the institution.
A healthy relationship at work is very vital because it brings about great team work and better co-operation with each other thus creating good working atmosphere, also the resources needed when available helps internal auditors to execute their duties on time.
Internal auditors are honest and loyal but good working conditions also boast them to work harder to achieve better results thereby ensuring that the set objectives of the institution are achieved efficiently.
INTERNAL AUDITORS EVALUATED BY EXTERNAL AUDITORS
63% of respondents indicated that internal auditors are not evaluated by external auditors and 37% respondents said that is not the case.
64% respondents said internal auditors are not assessed by other staff members and 36% said they are assessed by other staff members.
RECOMMENDATION AND CONCLUSION
The study indicates effective internal auditing is very important aspect in the growth of public institutions and Ghana as a whole. The study outlines that internal auditing should be modernized to help in risk management and governance processes because we are in a technological and dynamic world.
• Internal audit software should be developed to help in the execution of internal audit functions.
• Internal auditors should be trained to use the various software used in the numerous department in order to aid in auditing such departments.
• The establishment of suggestion box is also necessary because it will help other staff members to express their opinion about issues in the institution and also report fraudulent actions to internal auditors.
• Internal auditors should ensure to register with the Internal Audit Agency (IAA) and also Institute of Internal Auditors (IIA) to have full access to training and necessary documents to increase their knowledge and skills.
• Internal auditors should be evaluated by other staff, this can be in a questionnaire form designed by the planning department or the quality assurance department. This will help internal auditors to know their strength and weakness to improve their strategy or approach.
• Internal auditors should organize internal auditing workshop for other staff members so that they can be understood better for a great working relationship and better results.
• Internal auditors should not intimidate audit clients, discriminate against common staff and favour principal officers, each person is not above the law so equal treatment should be ensured.
• Internal auditors should discuss findings with audit clients before final audit report is written.
• Internal auditors should be proactive in executing their duties.
• Staff members should help internal auditors by reporting criminal or fraudulent actions, follow rules, regulations, policies and procedures.
• Officers from the Internal Audit Agency (IAA) should visit internal audit departments in the public institutions to know their current status and to help in solving challenges they have.
The study was about three public institutions that have internal auditing department in one of the big cities in Ghana, audit committee members were not included in the interviews conducted. A further study may involve more public institutions in both cities and local areas. Also, a further study can be on the computerization of internal auditing departments in public institutions.