Internal audit control practice on financial performance of Kenyatta National Hospital, Kenya
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Date
2023
Authors
Maingi, Cosmas Makau
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
The Kenyatta National Hospital has not appropriately presented stable financial performance for the past years, which is accredited to political meddling, misuse of funds, poor instituting of internal control practices and prudential auditing values. Financial records obtained from the Hospital website shows a decline of 9.5% and a slighter margin progress of 2.5% annually, ever since the beginning of 2000. Therefore, this study sought to investigate the effects of internal audit control practice on financial performance of Kenyatta National Hospital, Kenya. The target of this review is to look at the impacts of adoption of audit internal control measures in improving the financial performance of Kenyatta National Hospital in Kenya. Therefore, this study sought to investigate the effects of internal audit control practice on financial performance of Kenyatta National Hospital, Kenya. The study specifically sought to determine the influence of financial information reporting, audit principle and guidelines compliance, accounting measures and oversight audit board on financial performance of Kenyatta National Hospital in Kenya. The study was guided by the agency theory, systems theory, reliability theory and stewardship theory. The study applied a descriptive research design. The unit of analysis was Kenyatta National Hospital. The unit of observation was 80 employees. A census of 80 employees was done. Data collection was done using questionnaires. 8 questionnaires were piloted with respondents from the Kenyatta National Hospital and were not involved in the final research. Content validity was applied in this study to test the validity of the questionnaire. The study used test-retest technique to determine the instrument reliability which assessed the degree to which test scores were consistent. Descriptive statistics such as mean and standard deviation were used to evaluate quantitative data. The inferential analysis was carried out to test for the relationship between variables by applying correlation analysis and regressions analysis. Data was presented using tables and figures. The study found that that financial information reporting, audit principle and guidelines compliance, accounting measures and hospital oversight audit board had a significant effect on financial performance of Kenyatta National Hospital in Kenya. The study concluded that the hospital has laid down proper measures in accessing data electronically, the records are properly maintained and data properly updated. The hospital has put appropriate measures to ensure that there is consistency in reporting the data and the compliance measures applied have positively affected the clinical operations. The hospital’s internal auditors frequently checks whether the financial reporting measures are efficient and effective. The hospital’s board has taken appropriate measures in managing confidential matters such whistle blowing and it approves the policies and practices before they are taken for implementation. The study recommended that the hospital should responsibly address department reporting needs including the need for financial report training while minimizing data security risks and transparently consolidate information on financial reporting tools while conveying guidance on the options best suited to specific user roles and needs. The hospital should the audit work should be carried out by the staff who are qualified to do so by having the right combination of the necessary skills, training and experience. The hospital should use modern technology on accounting and control standard tools that are compatible with the accounting measures systems. The hospital oversight board should provide increased transparency on how an audit committee has discharged its duties and enable a more informed assessment of its performance and effectiveness. The study would facilitate management and directors of Kenyatta National Hospital to appreciate, clinch, and integrate appropriate and viable internal control system practices that would effectively ensure firm amenability to all internal control practices.
Description
A research project submitted to the school of business, economics and tourism in partial fulfilment of the requirement for the award of the degree of master of business administration (finance option) of Kenyatta University, June, 2023
Keywords
Internal audit control, financial performance, Kenyatta National Hospital, Kenya