The Effect Of Audit Services On Financial Performance Of banking Firms In Kenya

Abstract

In order to secure consistent good financial performance appropriate good management practices and audit services are needed to guarantee sustainable good results through optimal use of resources. For purposes of this study was determining the impact of audit services on financial performance of commercial banks in Kenya. Audit services that were used were international auditing standards, professional competence, internal controls, independence of auditors, various audit services bank liquidity and reported fraud levels. The study used a sample of 20 respondents who were senior managers selected from 20 banks located in Nairobi. The researcher used questionnaires to collect data from the respondents. Secondary datawassourced from the respective banks‟ websites for periods 2013 through 2017.Methods of analyzing data that were applied were the quantitative and regression analysis. It was established that liquidity and fraud didn‟t frequently have direct positive association with financial performance. Also it was found that change in audit services results to changes in financial performance of commercial banks. It is recommended that management of commercial banks need to adopt audit practices that are effective based on international auditing standards, advocate the independence of auditors, auditors‟ professional competence and strengthening of internal controls and other audit services to secure the financial performance of their organizations.