The role of internal audit in internal control effectiveness in Rwenzori Field, Uganda

Abstract

The role of internal audit is to provide independent assurance that an organization’s internal control processes are operating effectively. Organizations have internal controls to promote operational efficiency, ensure accurate, reliable accounting records, safeguard assets, encourage employees to follow company policy, and comply with legal requirements. The Internal Audit Department in Rwenzori Field, Uganda, was created in January 2013, as the result of combined pressure from many stakeholders: a recommendation from the General Conference Auditing Service; the Uganda union mission mandate to every field to have an internal audit department; and the need of pastors for internal audit in their churches to arouse carefulness and responsible stewardship among the local church treasurers. However, there is seemingly doubt of whether the Internal Audit Department is performing its function successfully and meeting expectations. The aim of this study was, therefore,to analyze the role of internal audit in internal control effectiveness of Rwenzori Field. The study was cross-sectional and utilized a causal research design to examine the role of internal audit on internal control effectiveness of Rwenzori Field. The study used descriptive and inferential statistics whereby mean and standard deviation, as well as bivariate correlations and regression analyses were respectively used for analyses of data. Results from the descriptive statistics showed that the internal audit department is effective in ensuring internal controls in Rwenzori Field institutions and churches. The results of correlation revealed significant positive relationships between internal controls and key elements in the internal audit department. Also, multiple regression analysis for institutions revealed that among the three predictors, competence (p < .01, beta = .454) and management support (p < .01, beta = .432) are significant predictors of internal controls. The same is true for the local churches (management support = p < .01, beta = .388; competence = p < .05, beta = .201). These results show that internal audit plays an important role in the Rwenzori Field of Seventh-day Adventists.