Effectiveness of internal audit function in Tanzania commercial banks

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University of Dar es Salaam
The study investigated the effectiveness of internal audit function as the tool for risk management and regulatory requirement in Tanzania commercial bank. In order to achieve this objective, extensive field research was undertaken to obtain relevant data from a random sample of 100 respondents including bank managers and officers, (Auditees), bank internal auditors, members of bank audit committee and external auditors by means of questionnaires and interviews, which were then analyzed using descriptive statistics and interpretation of the qualitative responses. Different indicators used to test internal audit effectiveness were quality of internal auditors in terms of qualification, experience and competences, management support to internal audit unit, quality of internal audit work and independence of internal auditors. The findings of the study revealed that there is a mixed perception on effectiveness of internal audit function in Tanzanian commercial banks. Internal auditors are satisfied with the quality of their work in banks but they need more support in terms of training on new developments in internal audit and more independence in performing their internal audit assignments and reporting. Auditees indicate that internal audit function is vital to the banks and plays a great role in bank performance and therefore its effectiveness is of importance, but they have argued that the nature of internal audit works is more reactive than being proactive, more investigative than advisory, awareness of the most internal auditors on banks operations not satisfactory to enable them to undertake their assignments more effectively. There is argument also on internal auditor's communication skills and their IT competence. Implications from the study are that training to internal auditors on new developments in internal and and on bank operations as well as on IT and communication skills are vital for internal audit effectiveness. Also risk based audit approaches as well as proactive and advisory internal audit reports are important for banks internal audit effectiveness.
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library
risk, internal audit, banks
John, S.(2010) Effectiveness of internal audit function in Tanzania commercial banks. Master dissertation, University of Dar es Salaam