Determinants of Internal Audit Effectiveness of Public Sector; A Case Study Rwanda Revenue Authority

The current trend in Rwanda is that each public institution reports annually to the Office of the Auditor General of state Finances (OAG). The critical situation is that Government Business Enterprises in Rwanda are still challenged by improper management of public funds, lack fair financial reporting and yet they have the services of the internal audit. The general objective of this study is to examine the effect of internal audit in Rwanda Revenue Authority. The study was expected to examine the determinants of internal audit in Rwanda Revenue Authority. Researcher used descriptive research design. The Researcher collected primary data using questionnaires. The questionnaires were distributed to both organizations senior management team and the internal auditors. The researcher used purposive sampling as one of the sampling techniques. The sampling technique of this study constituted by 89 employees of Rwanda Revenue Authority 27 Managers/Supervisors and 62 Auditors. The primary data was used to accomplish the study, and to collect the data from the respondents included in the sample questionnaires distributed. The questionnaires were distributed to the managers and the internal auditors of RRA. The value of R2 is 0.805. This indicates that there was a variation of 80.5 % of internal audit in RRA at a confidence level of 95 % which is strong and positive. . In addition other factors that were not studied in this research contribute to 19.5 %. Therefore, further research should be conducted to investigate the other factors which contribute to the internal auditing. This means that approximately 80.5 % variations of internal auditing are explained by the four sub variables, at 5 % level of significance. Analysis of Variance shows that f-calculated is greater that f critical that is 2.301greater than0.00. This implies that the regression equation was well specified and therefore the co-efficient of the regression shows that there is a strong relationship between internal audit and public sector growth. The analysis of variance of the predictors of the model has a significance of 0.000. Results indicate that management support is the most significant in explaining the public sector with a significance of 0.000 which is less that a p-value of 0.05 and beta value is 0.801. The aim of this research is to analyze the effect of internal audit in the public sector. The Management support, the managements perception, organizational independence and competent internal audit to public sector development. The Staff result showed that those sub-variables have significant and positive effect on the internal audit. The ability of independent variables to explain the dependent variable is 80.5 %. The audit structure has to be improved and the internal audit manager should report to the Board (Audit committee). Internal audit should get support from management. Audit should be independent and given correct auditing tools. Top management should accept audit findings and correct errors rather than view audit as fault finders.