Internal Audit and Organizational Performance in Selected Manufacturing Companies in Mogadishu Somalia

ABSTRACT 

This study was set out to establish the extent to which internal audit affects organizational performance in the selected manufacturing companies in Mogadishu Somalia .The study was to establish how internal audit affect organizational performance in the selected manufacturing companies in Mogadishu Somalia, the study was conducted through descriptive survey and correlation research design, quantitative approach: with a questionnaire and includes target population was 160 and sample 113 respondents from selected manufacturing companies in Mogadishu Somalia. The study utilized descriptive statistics frequencies and percentages, tables were used in the presentation of data and also Pearson’s product moment correlation coefficient was applied to test correlation between internal audit and organizational performance. The research found that the internal audit and organizational performance of selected manufacturing companies are significantly correlated r 0.950. Proper internal auditing significantly leads to the organizational performance in manufacturing companies. Organizational performance involves most of the following activities including management polices and management establishment minimum return required to meet the company’s return on assets, return on equity and also made comparison the current profit with profit made in the previous year to assess profitability Irends. The internal auditors of the manufacturing companies are not sufficiently skilled to undertake the~work~ program, and it is recommended that tr~ining be organized to enable to perform their jobs well and to develop an awareness of effective internal auditing and recommended that the company makes appropriate policy and procedures for the collection of its loans in default.

TABLE OF CONTENTS

Chapter Page

One THE PROBLEM AND ITS SCOPE

Background of the Study~ 1

Statement of the Problem 5

Purpose of the Study 6

Research Objectives 6

Research Questions 6

Null Hypotheses 7

Scope 7

Significance of the Study 7

Operational Definitions of Key Terms 8

Two REVIEW OF RELATED LITERATURE

Concepts, Ideas, Opinions from Authors/Expert 9

Conceptual frame work 23

Related Studies 24

Three METHODOLOGY

Research Design 27

Research Population 27

Sample Size 27

Sampling Procedure 28

Research Instruments 28

Validity and Reliability of the Instrument 29

Data GatheringPr6cedu~es~ 30

Data Analysis 31

Ethical Considerations 31

Limitations of the Study 32

Four PRESENTATION, ANALYSIS AND INTERPRETATION

Introduction 33

Profile of the respondent 33

The extent of internal audit 36

- The level of the organizational performance 41

Relation between internal auditing and of organizational 46

Five FINDINGS, CONCLUSION, RECOMMENDATION

Findings 48

Conclusion 50

Recommendation si

Suggestions for father research 52

References 53

Appendices

Appendix I Transmittal Letter 59

Appendix II Informed Consent 60

Appendix III Clearance from Ethics Committee 61

Appendix 1V Transmittal Letter for Respondents 63

Demographic Characteristics of the Respondents 64

Appendix VA Questionnaire to Determine internal audit 65

Appendix VB Questionnaire to determine organizational performance 67

Appendix VIA: sample size for research activities 69

APPENDIX VIB: TABLE FOR DETERMINING SAMPLE SIZE FROM A GIVEN POPULATION.

Appendix VIC: formulae for determining needed sample 72

APPENDIX VII RESEARCHER’S CURRICULUM VITAE 73