TABLE OF CONTENTS
DECLARATION ............................................................................................................................ ii
APPROVAL .................................................................................................................................. iii
DEDICATION ............................................................................................................................... iv
ACKNOWLEDGEMENT .............................................................................................................. v
TABLE OF CONTENTS ............................................................................................................... vi
LIST OF TABLES .......................................................................................................................... x
LIST OF ABBREVIATIONS ........................................................................................................ xi
ABSTRACT .................................................................................................................................. xii
CHAPTER ONE ........................................................................................................................... 1
INTRODUCTION ......................................................................................................................... 1
1.0 Introduction ............................................................................................................................... I
1.1.1. Historical Perspective ........................................................................................................... I
1.1.2. Theoretical Perspective ......................................................................................................... 3
1.1.3 Conceptual Perspective .......................................................................................................... 3
1.1.4 Contextual perspective ........................................................................................................... 4
1.2 Statement of the problem .......................................................................................................... 5
1.3 Purpose of the study .................................................................................................................. 6
1.4 General Objective ..................................................................................................................... 6
1.4.1 Specific Objectives ................................................................................................................ 6
1.5 Research Questions ................................................................................................................... 6
1.6 Scope of the Study .................................................................................................................... 6
1.6.1 Geographical scope ................................................................................................................ 6
1.6.2 Content scope ......................................................................................................................... 6
1.6.3 Time Scope ............................................................................................................................ 7
I. 7 Significance of the Study .......................................................................................................... 7
vi
1.8 Conceptual Framework ............................................................................................................. 7
CHAPTER TWO .......................................................................................................................... 8
LITERATURE REVIEW ............................................................................................................ 8
2.0 Introduction ............................................................................................................................... 8
2.1 The concept of internal audit Function ..................................................................................... 8
2.2 Essential elements of Internal Auditing .................................................................................... 9
2.3 Determinants of Internal Audit ............................................................................................... 11
2.4 Role of internal audit function ................................................................................................ 13
CHAPTER THREE .................................................................................................................... 17
RESEARCH METHODOLOGY .............................................................................................. 17
3.0. Introduction ............................................................................................................................ 17
3 .1. Research design ..................................................................................................................... 17
3 .2 Study population ..................................................................................................................... 17
3.3 Sample Size and sampling strategy ......................................................................................... 17
3.4 Area of the Study .................................................................................................................... 18
3.5 Data collection sources, Methods and Instruments ................................................................. 18
3.5.1. SourcesofData ................................................................................................................... 18
3.5.2 Secondary Data .................................................................................................................... 18
3.6 Data collection Methods ......................................................................................................... 18
3.6.1 Source: Field Data, 2017 ...................................................................................................... 18
3.6.2 Secondary data ..................................................................................................................... 18
3. 7 Data collection Instruments .................................................................................................... 19
3.7.1 Questionnaires ...................................................................................................................... 19
3.7.2 Interviews ............................................................................................................................. 19
3.8 Data processing and Analysis ................................................................................................. 19
3. 8. I Data processing .................................................................................................................... 19
vii
3.8.2 Editing .................................................................................................................................. 19
3.8.3 Coding .................................................................................................................................. 19
3. 9 Data Analysis .......................................................................................................................... 19
3.10 Validity and reliability .......................................................................................................... 20
3.10.1 Validity .............................................................................................................................. 20
3.10.2 Reliability ........................................................................................................................... 20
3 .11 Limitations of the study ........................................................................................................ 20
CHAPTER FOUR ....................................................................................................................... 21
PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS .................................. 21
4.0 Introduction ............................................................................................................................. 21
4.1.1 Response Rate ...................................................................................................................... 21
4.1.2 Demographic traits of respondents ...................................................................................... 21
4.1.3 Gender .................................................................................................................................. 23
4.1.4 Age of respondents .............................................................................................................. 23
4.1.5 Education of respondents ..................................................................................................... 24
4. I .6 Period of Work ..................................................................................................................... 24
4.1.7 Position of respondents ........................................................................................................ 24
4.2 The role internal audit function and financial performance at National Social Security Fund.
·············································································································································4.2.1 Advising the management for reliability and authenticity in financial repo1iing ................ 25
4.2.2. Recommends improvements in controls which reduce internal risks ................................. 25
4.2.3 Assessing compliance with policies and procedures and sound business practices ............ 26
4.2.4 Helps in investigating occurrences of fraud, embezzlement, theft, and waste within an
organization ................................................................................................................................... 27
4.3: The challenges limiting the carrying out of independent audits at National Social Security
Fund .............................................................................................................................................. 28
4.3.1 Lack of independence .......................................................................................................... 28
viii
4.3 .2 There is lack of efficient and effective internal audit system .............................................. 29
4.3.3. Conflict of interest situations .............................................................................................. 30
4.3 .4 Lack of professional in reviewing financial statements ....................................................... 31
4.3.5 Biased opinions in reviewing financial statements .............................................................. 32
4.4 The relationship between internal audit function and financial performance at National Social
Security Fund ................................................................................................................................ 32
CHAPTER FIVE ........................................................................................................................ 34
SUMMARY OF FINDINGS, CONLUSIONS AND RECOMMENDATIONS .................... 34
5.0 Introduction ............................................................................................................................. 34
5.1 Summary of major findings .................................................................................................... 34
5.1.1 Summary on the role internal audit function and financial performance at National Social
Security Fund ................................................................................................................................ 34
5.1.2 Summary on the challenges limiting the caITying out of independent audits at National
Social Security Fund ..................................................................................................................... 34
5. 1 .3 Summary on the relationship between internal audit function and financial performance at
National Social Security Fund ...................................................................................................... 34
5.2 Conclusions ............................................................................................................................. 35
5.3 Recommendations ................................................................................................................... 36
REFERENCES ............................................................................................................................. 37
APPENDIX I: QUESTIONNAIRE TO THE RESPONDENTS .................................................. 40
APPENDIX II: ACTIVITY CHART ............................................................................................ 45
APPENDIX III: BUDGET ........................................................................................................... 46
APPENDIX IV: INTRODUCTORY LETTER ............................................................................ 47
ABSTRACT The study was done on internal Audit function and Financial Performance. The study was carried out at NSSF-head office Kampala. The researcher collected both primary and secondary data, using the survey method and review of the existing literature respectively. Questionnaires were used for data collection. Data obtained from findings indicate that internal audit has several fimction on the financial performance at NSSF. Some of the roles realized from the study findings include, advising the management for reliability and authenticity in financial reporting, Recommends improvements in controls which reduce internal risks for better financial performance, Assessing compliance with policies and procedures and sound business practices, Helps in investigating occurrences of fraud, embezzlement, theft, and waste within an organization which leads to better financial pe1formance. The study also revealed several challenges limiting the carrying out of independent audits at NSSF. Some of the challenges include Lack of independence, lack of efficient and effective internal audit system, Conflict of interest situations, Lack of professional in reviewing financial statements, biased opinions in reviewing financial statements. The study also revealed a strong relationship between internal audit and financial pe1formance. It was revealed that internal audit is part and partial of the financial performance of any organization working as a watchdog on issues of ji·aud, embezzlement and checkups in the internal control systems for improved financial pe1formance. It was recommended that it is necessary for the management at NSSF to provide support to the audit department and internal auditors in order to have successful audit reports for better financial pe1formance. Evidence ji·om this research suggests that increasing the capacity and support to the audit department reduces system loopholes for better financial pe1formance. From the findings and conclusions, it is recommended that: A well-established internal audit control system must be created with its staff fully equipped with qualified personnel and resources needed by them to pe1form effectively. The internal training programmes given to the staff at the internal audit unit in the form of seminars and accounting courses should be continued with. Management should not in any way inte1fere in the work of the internal auditor, although the internal auditor is employed by management. The co-operation between management and internal audit staff should be maintained and strengthened. Management should al'ways take the recommendations of the internal audit unit into consideration. This may serve as a morale booster to the staff at the unit and cause them to work harder.
