International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

An Analysis of the Role of Internal Audit in Implementing Risk Management- a Study of State Corporations in Kenya
Dr. Odoyo Fredrick S., Dr. Omwono Gideon A., Mr.Okinyi Narkiso O.

The study analyzed the role of internal audit in Enterprise Risk Management (ERM) by providing empirical Evidence on the Kenyan public sector firms. The study examined the impact of Involvement in ERM by auditors and internal auditors’ willingness to report a breakdown in risk procedures and whether a strong relationship with the audit committee affects willingness to report. The study also investigated the use of ERM and the role of internal audit in ERM. The study was carried out as a cross-sectional survey where the study population was 99 respondents from nine state corporations operating under the State Corporations Act. From the findings, the study concluded that management of State Corporation needs to create an environment that will harness commitment and support to internal audit if it is to effectively perform its responsibility of giving assurance that organizational risks are managed effectively. This will only be possible if individuals within organizations are aware of the role and importance of internal audit function in implementation of enterprise risk management. The study made the following recommendations; the process regarding internal audit and regulatory compliance certification should be amended to ensure the corporations’ trust in them. This will have the desired effect of their wide-scale adoption that, in turn, leads to stronger internal controls and standardization of operations. The study suggested further research should be carried out to find out how the auditors themselves contribute to the effectiveness of internal audit function, for example factors such as competences, education status and others.

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