CHAPTER ONE: INTRODUCTION
1.1. BACKGROUND OF THE STUDY
Auditing refers to the process of checking and analyzing of financial statements to prove that they give true and fair view of the company and to ensure that they were prepared according to the accounting standards and finally producing a report after their opinion. Internal audit is professional activity involved in helping organizations to achieve their objectives. And the goals using systematic methodology for analyzing business processes, procedures and activities by highlighting organizational problems and recommending solutions. Famous authorities an auditing literature; defined auditing the internal auditing system as the whole system of controls , financial and otherwise, established by the management in the conduct of business including internal check, internal audit and other forms of control . In the management of government institutions like other companies, general directors or managers set objectives and formulate strategies. The internal auditor is supposed to examine financial information on behalf of the management to ensure that various corporate objectives are achieved with minimum costs possible. For this reason the internal auditor should be able to review and to keep track of the company’s performance to ensure that it is operating as per the pre-determined course of action. In this case the internal auditor will need to review and to assess the company’s performance from a much broader perspective and this presupposes that the internal auditor understands the objectives of an organization as manifested in the articles and memorandum of association or any other statutes governing the company’s performance. This means that the internal auditor must understand corporate policies to enable him to identify and to analyze the company’s performance from predetermined course of action. Such a process will entail a review of each part of the organization. It consists of performance measured from the entire organization.
Internal audit has been in place in Rwanda Revenue Authority since its creation in 1997. Internal audit practiced in RRA and highly contributes in its operational effectiveness and efficiency. It also provides an assurance to senior management, the Rwanda Revenue Authority Board of Directors and the Ministry of Finance and Economic planning that the systems of controls in Rwanda Revenue Authority are operating efficiently and effectively. Internal audit helps RRA in achieving of its objectives and goals by preventing errors and frauds and advising RRA management on how these errors and frauds may be corrected at early stage. Particularly, public institution and Rwanda Revenue Authority have to know how to assess the role and impact of internal auditing department. This will help them to have strong internal audit department and this will increase the confidence of the donors, government since they will ensure the best use of their financial assistance. 1.2 STATEMENT OF THE PROBLEM
In the public sector management, the managers use internal audit as a key helps the managers to be what they want to be. Managers use many different techniques of control to ensure better management of their organization. The problem state here is to analyze the strategic techniques and approaches in management and to establish the impact and role of assessing internal audit on the performance of public institutions. The problem occurred also is the non-support of internal audit or ignorance of the role and impact of internal audit in organization while it is as key for effective operation of organization, this can provide lower financial resources and human resources. The above issues raise several questions on internal audit function (department). 1.3. OBJECTIVE OF THE STUDY
1.3.1 General objective: Generally, the study is to identify the effect of internal...
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