Internal Audit and Business Resilience in Power Sector: A Case of Geothermal Development Company, Kenya
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Date
2023-11
Authors
Mwai, David Kanyi
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Over the years, internal auditors' roles have evolved from mere compliance checking to offering a
strategic perspective on organizational processes. They play a significant role in evaluating project
success potential due to the substantial cost and downtime associated with disasters. Consequently,
the concept of business resilience is gaining prominence in boardrooms. The general objective of
this study was to establish the role of internal audit in enhancing business resilience in the power
sector, specifically focusing on the Geothermal Development Company Limited in Kenya. The
specific objectives were to examine how risk management, business controls, governance, and
business advisory contribute to business resilience in this organization. The study was grounded
in various theories, including the balanced scorecard, strategic choice theory, transient advantage
theory, strategic management theory, complexity theory, and the normal accident theory. It
employed a descriptive research design and focused on three operational regions of the Geothermal
Development Company, with a target population of 200 staff members. A census approach was
used as the sampling technique due to the relatively small population size. Primary data was
collected using semi-structured questionnaires, and a pilot study was conducted to assess
instrument validity and reliability. Data analysis was carried out using SPSS, employing
descriptive and inferential statistics, including correlation and regression analysis. The results were
presented using tables and figures. The study found that risk management, business advisory,
internal controls, and governance all had positive and significant effects on the business resilience
of the Geothermal Development Company. It concluded that internal audits had a positive and
significant influence on the company's business resilience. Internal audit was identified as playing
a critical role in enhancing business resilience through effective risk management, robust
governance, and reliable internal business controls. These factors collectively contributed to the
organization's ability to withstand disruptions and ensure sustained growth in the power sector.
The study recommended that organizations elevate the strategic position of internal audit functions
and implement their recommendations. To enhance business resilience at the Geothermal
Development Company, it suggested strengthening risk management practices, improving
governance structures, and enhancing internal business controls. Capacity building in internal audit
and expanding business advisory services were also recommended to optimize the internal audit
function. Additionally, the company should consider benchmarking and collaborating with peer
organizations to identify areas for improvement and share best practices within the power sector.
Description
A Research Project Submitted to the Department of Econometrics and Statistics in the School of Business, Economics and Tourism in Partial Fulfillment of the Requirement for the Award Degree of Master of Business Administration (Strategic Management Option) of Kenyatta University, November 2023.
Keywords
Internal Audit, Business Resilience, Power Sector, Geothermal Development Company, Kenya