Effectiveness of Internal Audit in Micro Financial Institutions: Evidence from Selected Financial Institution in Ghana

Abstract

The primary objective of the study is to measure the factors influencing internal audit effectiveness in savings and loans companies. Specifically, the study ascertained the suitable criteria or framework for measuring the effectiveness of the internal audit functions in micro finance institutions (MFIs). Data was obtained from three leading MFIs in Ghana. The data was collected from 30 respondents in these MFIs using structured questionnaires and in-depth interview with chief internal auditors of the MFIs. The result indicated a negative relationship between technical competence and internal audit effectiveness, no significant relationship between independence and internal audit effectiveness.  The study recommends the upgrading of technical competence in audit staff through training programs to boost the effectiveness of the internal audit function.