The Impact of Internal audits on the quality of financial reports

Author

Nhanga, Kudzai

Title

The Impact of Internal audits on the quality of financial reports

Abstract

The focus of this research centered around examining how internal audits influence the quality of financial reports –specifically studying Nicoz diamond Insurance Company. The following were the research objectives of the study, to investigate the impact of auditor professional competency on the quality of financial reports, to examine the perception of key employees regarding the impact of internal audit function and to ascertain the impact of auditor independence on the quality of financial reports. The study hinged on the institutional theory, information asymmetry theory and stakeholder theory .The researcher adopted the quantitative and descriptive approach to ascetain the relationship between the variables .The use of questionnaires to acquire primary data was utilized with a sample size of 54 being achieved as per the original 59 comprising of finance and underwriting personnel .SPSS social sciences software was used to help quantify the data collected using Pearson Correlation tests, Alpha Cronbach test, normality and multicolinearity tests to make sure the data was valid and reliable .The study discovered a strong positive correlation between auditor professional competency and the quality of financial reports in Nicoz diamond insurance company. The study concluded that employee perceptions of the internal audit function does impact the quality of financial reports significantly and conclusively the study discovered that auditor independence has a positive correlation with the quality of financial reports. Better auditor education and better corporate structure development in the company were recommended to better enable the audit function to give better financial results.

Date

2023

Publisher

BUSE

Keywords

Financial report

Quality

Internal audits

Financial reports

Supervisor

N/A