Abstract:
The study was about The effect of internal audit on financial performance of financial institutions in Rwanda. A case of Bank of Kigali PLC within the period of 2019-2022. Specifically this study examined the effectiveness of internal audit applied by Bank of Kigali PLC and find out the contribution of internal audit to the financial performance of Bank of Kigali PLC.In virtue to the main purpose of this study, researcher designed an appropriate research methodology and used the interview, documentary review and questionnaire techniques to collect data and SPSS was used to analyse relevant data which allowed the researcher to obtain the following results:
Regarding to the effectiveness of audit function applied by applied by Bank of Kigali PLC results demonstrate that the majority of respondents with 64.5% agreed that internal auditors in Bank of Kigali PLC have access to all the information which they consider to be pertinent to the conduct of their audit; this is followed by strongly agree with 24.7%. On the other side, by83.9% strongly disagree that internal audit activities in Bank of Kigali PLC sometimes face interference by management in determining its scope and communicating its results. The results also shows that 68.8% of the total respondents strongly agree that internal audit in Bank of Kigali PLC ensuring that the risk assessment identifies those risks presenting. Regarding to the financial performance profitability ratio shows that From 2019 up to 2022.The ratio of Return on Assets are 3.66%; 2.95%; 2.95% and 3.22% respectively. And from 2019up to 2022, the ratios of Return on Equity are as follow: 16.90%, 14.86%; 18.16% and 18.72% respectively. Regarding to the relationship between the studied variable results shows that regression equation established, taking all factors (Auditors‟ independence, Respecting auditing standard, Ensuring risk management, Ensuring the effective internal control, Ensuring the effective corporate governance) constant at zero, financial performance of Bank of Kigali PLC will be 2.837. The data findings analyzed also shows that taking all other independent variables at zero, a unit increase in Auditors‟ independence will lead to a 0.637 increase in financial performance of Bank Of Kigali PLC. Therefore, this allows us to confirm that there is a strong relationship between internal audit and performance of Bank of Kigali PLC.
