Kaplelach SamsonMbaruk, Mohamed Idris2023-01-242023-01-242022http://ir-library.ku.ac.ke/handle/123456789/24502A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfilment of the Requirements for the Award of Master of Business Administration (Finance) Degree of Kenyatta University November, 2022.Financial performance of County governments in Kenya has been rated to be below average, as is evidenced in the 2017/2018 Auditor General’s report, on County governments’ performance. Available information attests to the fact that Audit practices are an inherent function of the operations of all government activities. Audit provides unbiased, objective assessments of responsible and effective public resources management in an effort to achieve intended results. Poor financial performance despite existence of audit functions is therefore an understatement. The disparity between budgeted and actual revenue collection has prompted an investigation into the cause. The researcher intended to determine whether internal audit practices affects financial performance of county government of Mombasa, Kenya. Particularly, the study endeavored to; ascertain the effects of internal control system, independent assurance, financial reporting and risk management on financial performance of County government of Mombasa, Kenya. Relevant theories used were agency theory, stakeholder’s theory, and Institutional theory of organization and stewardship theory while empirical literature was reviewed and gaps identified to inform the study. Descriptive research design was used and a population of 108 employees comprising of internal auditors, finance staff, accountants and Directors of the County Government of Mombasa were targeted as respondents. Stratified sampling was adopted to select 85 respondents. Semi-structured questionnaire was used to collect data while reviewed audited financial reports were used to generate secondary data from Mombasa County Government. In this research content validity and reliability were enhanced through the use of experts’ opinion in the area of study. Measure of central tendency and standard deviation aided in deriving fundamental material about nature of variables in a data set using descriptive statistics. The findings which were reinforced by the regularities of the feedback from the responses in form of inferential statistics that is Pearson correlation study discovered affirmative and significant correlation amid the variables with a value of between 0.0258 and 0.09727. Further the findings were supported by multiple regression equation to give the predictive analysis of the data. From this outcome of research, the researcher concluded that internal audit practices influenced financial performance of county government of Mombasa. The researcher recommended that the internal auditing practices need to be strengthened, well conducted and well-reported to ensure proper utilization of County resources to enhance financial performance. The study further recommends more financial reporting procedures to ensure accountability in utilization of County resources. The study also recommends that risk management be taken in order to mitigate threats to loss of public money. It is the recommendation of the researcher on basis of the research outcomes that the same study needs to be done with different variables being; monitoring and evaluation, quality control, and governmental regulation among others and their effect on financial performance in county government. In addition, the research having been only done at Mombasa County Government it is found essential that similar researchers be done in other Kenyan Counties.enInternal AuditInternal Audit PracticesFinancial PerformanceFinancialCounty Government of MombasaKenyaThesis