| dc.description.abstract | Through a risk-based internal audit (RBIA), companies can use internal audit capabilities
to improve management and control of risks. It also improves the accountability and
accuracy of financial statements. This study focused on the deposit-taking savings and
credit cooperatives (DT-SACCOs) in Nairobi Metropolis, Kenya. Some DT-SACCOs
today are faced with the challenges of auditing in their operations despite having an audit
department in place. A risk-based internal audit helps an organization in the identification
of high-risk areas which helps in giving priorities to such areas. This enables the
improvement of the financial performance and provision of high-quality reports by the
company. This study focused on the effect of risk-based internal audit on the financial
performance of DT-SACCOs in Nairobi Metropolis, Kenya. The study used a descriptive
research design and was anchored on three theories namely: fraud triangle theory, audit
theory, and risk management theory. The research conducted a census of 43 DT-SACCOs
in Nairobi Metropolis, Kenya, and collected primary data from respondents consisting of
one audit manager per DT-SACCO. Secondary data was also collected to validate data on
financial performance. Regression models were used to test hypotheses where risk
assignment and risk-based audit planning proved affirmative to having a statistically
significance effect on the financial performance of DT-SACCOs. The research established
that corporate governance has a controlling effect on the association between risk-based
audit and financial performance of DT-SACCOs. This research has contributed to the
existing theoretical and empirical literature on risk-based internal audit and will inform the
practice by helping the managers understand its importance and incorporate it into their
firms. The findings will also encourage the regulatory body (SASRA) to be able to
incorporate RBIA as a critical requirement for all DT-SACCOs. | en_US |
