Effectiveness of Internal Audit in Rural Banks

Abstract

The purpose of this study is to assess the efficiency of internal audit implementation. This study takes a quantitative approach and employs a survey-descriptive method. A proportional stratified random sampling approach was used to pick respondents. A total of 59 persons were chosen from a total population of 110. Internal audit variables measured include independence, professional ability, the scope of work, implementation of inspection activities, and management of the internal audit department. Several steps of data analysis were completed. The instrument is initially tested for validity and reliability, after which the findings of the questionnaire are scored using a Likert scale. The categorizing of each response element is the final step. The results showed that the internal audit at PT BPR Intan West Java was carried out effectively, with the order of the highest to lowest scores being: Professional Ability, Implementation of Examination Activities, Scope of Work, Management of the Internal Audit Section, and Independence. Other findings indicate that the assessment of the effectiveness of the internal audit of PT BPR Intan West Java received positive opinions, both respondents from the elements of the Branch Head, Head of Section, and staff representatives.

Internal Audit Practice and Financial Reporting Quality: Perspective From Nigerian Quoted Foods and Beverages Firms

“…The results of the analysis indicated that all the identified variables of internal audit practice like technical proficiency of staff of internal audit unit, firm size and internal audit staff remuneration positively influenced the financial reporting quality of selected food and beverages firm, lagos state, Nigeria .The results implies that an increase in identified attributes of internal audit practice increased financial reporting quality which will trigger user confidence in financial information of the sampled firms. This results is in line with outcomes of scholars like (Baharud-din et al, (2014), concluded that successful internal audit department generally depends on management support strength ;Mustika, (2015) found that the internal audit effectiveness can be attained through increase internal audit competence, independence and Azizi, Yeganeh and Azinfar, (2010) with opinion that attributes of technical proficiency of an auditor, audit remuneration benefit and auditor independence will facilitate financial report and enhance investment efficiency. The result is however negates the study of Hikmayah and Aswar (2019) who argued that auditor competency and professional commitment were not significant to audit quality…”

“…Management style and organizational structure determine the independent internal audit which provides the assurance services and consultations to the organization for effective and efficient utilization of organizational resources. Mustika, (2015) examined the factors that influence the internal audit effectiveness, including internal auditor competencies, internal auditor independence, auditee support to internal audit activity, and the internal and external auditor relationship. Using the internal auditor inspectorate in Java Province, Indonesia, they found that the internal audit effectiveness can be attained through increase internal audit competence, independence and strong relationship between internal and external auditor.…”