Effect of Internal Auditing on Financial Performance of Commercial Banks in Kenya

Abstract

Goal for the study was to ascertain how internal auditing affect financial performance of commercial banks. The study's main goals was to evaluate the independence of internal auditing, the level of technical proficiency of internal auditing, and the impact of the control environment on internal auditing of commercial banks in Kenya. In order to understand the study's determinants, the study used agency theory, contingency theory, and institutional theory. To create closed-ended questions and determine their applicability, a descriptive research design that was in line with the study's aims was used. Thirty nine commercial banks was the study's target population. Secondary and primary data was gathered for the study. Secondary data was gathered from the yearly financial statements of commercial banks under CBK supervision, while primary data was gathered using a closed-ended questionnaire presented to respondents using the drop-and-pick approach. One management staff member and two representatives from the finance and accounting department made up the study's unit of analysis. The study's data analysis was quantitative. Link between variables in the study was established using multiple-regression analysis. The frequency distribution, percentages, mean, and standard deviation were used to analyze and show the coded data