Analysis Of The Role Of Internal Audit In Enterprise Risk Management (ERM) In Insurance Companies In Kenya
The importance to strong corporate governance of managing risk has been increasingly acknowledged. The objective of the study was to establish the role of internal audit in enterprise risk management in insurance companies in Kenya and if it is compliant with Institute of Internal Auditors’ guidelines. The study adopted a descriptive cross-sectional survey. The study populations of the study were 50 insurance companies in Kenya as at 31st December 2015. The study used questionnaires to collect primary data. The questionnaires were perused for completeness, incomplete questionnaires were discarded and only complete ones were used for analysis. Complete questionnaires were coded and keyed into SPSS. Data was presented in tables with percentages, means, standard deviations and frequencies. The information was displayed by use of bar charts and graphs. Content analysis was used to test data that is qualitative in nature or aspect of the data collected from the open ended questions. From the findings the study concludes that that internal audit plays a significant role in enterprise risk management in insurance companies in Kenya, which was compliant with Institute of Internal Auditors’ guidelines. The study established that the role of internal audit in enterprise risk management was to provide objective assurance that the major business risks are being managed appropriately and providing assurance that the risk management and internal control framework is operating effectively. The study found out that top management plays a key role in influencing the success of ERM. The study found out that staff work as team which helps in mitigating risk in the organization and staff appreciation helps in reducing fraudulent cases in the company. The study found out that in the company training on risk improves employee knowledge on risk management and the process of staff training on risk management is to fulfill the organization’s objective. The study revealed that technology plays a key role in achieving an organization’s objectives on risk management; technology is considered as an important factor in the face of increasing risk. The top management should support external expertise which positively influences the implementation of ERM. The study recommends that there is need for Insurance Companies to consider the various factors affecting implementation of ERM in Kenya. There is need for Insurance Companies to enhance their organisation culture and structure as this will influence the implementation of ERM. There is need for the management of Insurance Companies to create budget and resource allocation for implementation of ERM in the organization.
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