Internal Audit Function And Corporate Governance In Commercial Banks

This research paper examined the role of IAF in corporate governance effectiveness in therncase of 13 purposely sampled commercial banks by adopting concurrent mixed researchrnapproach. Quantitative methods were used through survey of internal auditors, andrninterviews and documentary sources taken under the qualitative methods. From the totalrnof 105 questionnaires were distributed to internal auditors, 78 had collected and 8rninterviews were conducted with vice-presidents of 8 banks.rnThe main findings of the study were that the rates of implementation to auditrnrecommendation by management, attributes of IAF (or the policy for hiring and training,rnexperience and professional certification of internal auditors), and use of IAF workingrnpapers by external auditors in the banks were low. Thus, an IAF of the banks don’trnpossess quality and its positive impact on corporate governance effectiveness isrnquestionable, though IA practices were maintaining independence and it is value-addedrnactivity. Management of the banks need to take corrective action to auditrnrecommendations and have to afford adequate attention to the proficiency of internalrnauditors to better equip an IAF quality and its role in corporate governance effectiveness.rnThis finding indicated that extensive research should be taken in the quality of IAF andrnits role in corporate governance mechanisms and their interrelationships.rnKey words: Internal audit; internal audit function; quality internal auditrnfunction; corporate governance; commercial banks

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