Assessment of the adequacy of internal audit function in determining internal control effectiveness: a case of Tanga Urban Water Supply and Sewerage Authority (Tanga UWASA)

Business failure as a result of ineffective Internal Control Systems (ICS) is a heightening global concern. Despite repetitive efforts by organizations to effectively make use of ICS, there has been an increasing rate of recorded business failures due to broken ICS. In Tanzania weakness in ICS is widely observed in the public sector as cited in this study on the case of Tanga UWASA (CAG, 2011).This research aimed at assessing the adequacy of the internal audit function in determining the effectiveness of the ICS in public entities in Tanzania, instigating discussion on audit competence, staffing, audit environment, work relations and reporting structures. On a sample of 47 case entity employees, data was collected using structured questionnaire and interviews and analysed using a Chi-Square test, through the SPSS software was made, hypotheses tested and interpreted. The study found that audit work environment fail to support audit functions. Audit activities were observed to be more reactive than pro-active, the prevailing reporting structure impairing independence, absence of cross-functional (3600) audit activities, limited use of ICT and the audit output being rarely consulted by higher authorities. The study recommends; establishment of an environment that supports independence, cross-functional audit practice, elimination of management override, staffing audit units adequately in number and skills, enhance relationship and promote use ICT. Lastly, further research is needed to assess effective use of MIS in ICS enhancement, evaluate use of independent audit shops to reduce management override, and determine best reporting structure for audit units in public entities.