Efficiency in Banking: Analysis of Factors Affecting the Internal Audit Effectiveness in Ghana

Abstract

Although organizational internal control is for the purpose of ensuring effectiveness and efficiency of operational activities, trustworthiness of financial data amidst compliance with auditing standards which have been instituted into the mundane activities of banks in Ghana, many banks still have difficulties in recovering facilities which are granted to customers after expiry. This study assesses the effectiveness of internal auditing in rural banks in the Central Region of Ghana. Adding to the body of knowledge, the paper argues that in spite of the instituting of internal audit units in various rural banks, the issue of default of bank facilities is gradually destroying most gains and also crippling business opportunities. Methodologically, the paper adopts a descriptive survey where primary and secondary data are effectively utilized. The findings of the study revealed that the default in rural banks facility recoveries are accorded to the fact that most recommendations cited by internal auditors are not applied. The study findings also showed that most internal auditors lack the necessary in training to be updated on the job in order to make them function at their full human resource capacity while other bank operating units rip the internal auditor of privacy and independence. The study recommends among others that prior to the findings of the study, internal audit findings should be used as a gauge to facilitate banking operations while implementing suggested recommendations so as to achieve set targets of rural banks. Furthermore, the banks should endeavor to periodically offer training programs for internal audit staff to enlighten and update them on the ethics of the auditing profession.

Keywords: Internal Audit Effectiveness, Rural Banks, Ghana

DOI: 10.7176/RJFA/10-4-05