The relationship between effectiveness of internal audit function and financial

performance: Evidence from the Nairobi Securities Exchange

The study seeks to answer the following questions;

i. What role does internal audit play for companies listed at the Nairobi Stock

exchange?

ii. To what extent does internal audit function affect the financial performance of

companies listed at the Nairobi Stock Exchange?

iii. To what extent does the quality of Internal audit work impact on the financial

performance of companies listed at the NSE?

Proportion of internal audit staff who have prior work experience in auditing to the size of the
internal audit function on performance
Proportion of internal audit staff who have accounting qualification to the size of the internal audit
function on performance
The proportion of independent members to the total number of members in the audit committee
has an effect on performance
Hours of Training per Auditor has an effect on performance

Total Internal Audit Department Costs/Total Annual Revenues has an effect on performance

Proportion of internal audit staff who have accounting qualification to the size of the
internal audit function has an effect on performance
 Management Skills
Adequate Working Capital
Business Registration
Access to Business Information
Growth of Small Business Enterprises

Proportion of internal audit staff who have prior work experience in auditing to the size of the
internal audit function on performance
Proportion of internal audit staff who have accounting qualification to the size of the internal audit
function on performance
The proportion of independent members to the total number of members in the audit committee
has an effect on performance
Hours of Training per Auditor has an effect on performance

Total Internal Audit Department Costs/Total Annual Revenues has an effect on performance