Internal Audit and Profitability of Banking Institutions in Kenya: A Case Study of Commercial Banks in Kericho County, Kenya by Dr. Kimetto Richard, Scientific Research Journal (Scirj), Volume VII, Issue V, May 2019 Edition

Scirj Volume VII, Issue V, May 2019 Edition
ISSN: 2201-2796

Internal Audit and Profitability of Banking Institutions in Kenya: A Case Study of Commercial Banks in Kericho County, Kenya

Dr. Kimetto Richard

Abstract: Banking sector faces myriad challenges in delivery of services to its clients. Among these include: ineffectiveness in internal audit and profitability in their mandates in providing banking services. Thus, the aim of this research was to find out the factors that impede effective internal audit and profitability of banking sector in Kenya based on a case study of Commercial Banks in Kericho Town. The study focused on the effectiveness of internal audit in Commercial Banks, to determine factors affecting profitability of Commercial Banks, and to establish the relationship between quality of internal audit and profitability. The data were collected using questionnaire and interview schedule. The study had a sample size of 30 employees sampled from various commercial in Kericho town using stratified random sampling method. The research findings indicated that: internal auditors contribute to profitability of firms mainly through detection of fraud and advising management on internal control system; also it indicated that the major constraints to internal audit effectiveness were lack of independence and lack of enough qualified audit staff. Profitability of Commercial Banks was mainly affected by high tax liability on profits, low productivity per employee and increasing cost of production. Furthermore it established that effective internal audit influence profitability of firms. The study recommends that if the Commercial Banks were provide effective internal audit and real its profitability they should provide a conducive working environment to the internal auditors to enable them executive duties well.

Reference this Paper: Internal Audit and Profitability of Banking Institutions in Kenya: A Case Study of Commercial Banks in Kericho County, Kenya by Dr. Kimetto Richard published at: "Scientific Research Journal (Scirj), Volume VII, Issue V, May 2019 Edition, Page 46-62 ".

Search Terms: commercial banks, conducive environment, internal audit, effective, and profitability

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