Drivers of Enhanced Internal Auditor's Performance of NSE Listed Banks in Kenya

Abstract

The study evaluated the key driver of enhanced financial performance in the Nairobi Stock Exchange (NSE) listed banks in Kenya. The study posits objectivity, governance and independence have significant effects while the frequency of reporting has no significant effect on the auditor's performance in the NSE listed banks in Kenya. The study used a descriptive research design and a case study to analyze the impact of the variables on auditor's performance using Likert collected responses. The correlation results established that internal auditor's independence, good governance and objectivity positively influenced the performance as they all had positive values. The R squared value being at 75.4% hence showing a good fit. The F statistic was also significant showing that the independent variables were significantly different and that each could contribute differently to the auditor's performance. To enhance performance and mitigate adverse corporate governance issues management requires that the banks offer auditors independence and authority in the management protocols and establish internal audit unit to undertake periodical audits. To facilitate faster delivery of audit services including the detection and prevention of frauds and/or non-compliance with public expenditure, the listed banks should provide a conducive work environment that enables the use of cutting-edge ICT technology to support auditing functions, promote continuous training and develop institutional mechanisms (e.g., enforcement, auditing, or corporate governance structures) to encourage compliance with international standards.