INTERNAL AUDIT AND PERFORMANCE OF MANUFACTURING COMPANIES CASE STUDY:BRALIRWA PERIOD: 2020-2023

Abstract

The purpose of this study was is to examine the effect of internal audit on performance of manufacturing companies in Rwanda.The specific objectives of the study were to examine the effectiveness of internal audit in BralirwaPlc and To assess the relationship between internal auditing and Financial performance. The population under study is 30 employees of Bralirwa Plc include finance employees, accounting, procurement, inspection, internal audit and managers to be given questionnaires and interviewed. An explanatory research survey was adapted as research design where a total sample of 30 respondents was selected. 100% of the respondents agree that they like to have their Manufacturing audited. All supported their answers by mentioning that through auditing, ones knows the financial status of Manufacturing. Other said that the auditing leads to signified that having financial institution’s audited, Manufacturing performance is achieved that ranges between 4.41 and 0.49 with standard deviation ranges said tha internal audit are independent from 4.34and 0.65with standard deviation said that the internal audit is characterized by objectivity, range between 4.26 and 0.60 with standard deviation argued that the internal is competence. From these findings it is revealed that the internal audit is effective and reliable based on the characteristics during 2020 to 2023 internal audit of Bralirwa plc identify the following errors: errors of omission with 4.41 mean and 0.49standard deviation, 4.34mean with 0.65 standard deviation mean errors of principle, 4.26 mean and 0.60 compensating errors, 4.34mean with0.48 standard deviation, clerical errors and 4.38 mean with standard deviation 0.49 are embezzlement. These findings allowed the researchers to say that the accountant of Bralirwa plc was not qualified of preparing the financial statement fairly .But, the auditor contributed in collecting those errors. net profit margin ratio from 2020 up to 2023 the ratio are 8.9%, 14.1%,14.3% and 16.1% respectively. This means that in 2020 for 100rwf of sales has got 8.9 Rwf, in 2021 for 100 Rwf of sales has got 14.1Rwf. in 2022 for 100 Rwf of sales had got 14.3 and in 2023 for 100 Rwf of sales had got 16.1 The significant Spearman correlation coefficient value of 0.708 confirms what was apparent from the table; there appears to be a strong positive correlation between the two variables. It means in BRALIRWA PLC Internal Audit is essential in all operations.