Internal Audit and Financial Performance of Kama Oil Ltd Mbale City

Abstract

This research report was undertaken to examine the effect of internal audit on financial management practices at Kama Oil Ltd. It was guided by three objectives; to determine the effect of risk assessment on financial performance of Kama Oil Ltd ,to analyze the effect of audit planning on financial performance of Kama Oil Ltd ,to assess the effect of audit execution on financial performance of Kama Oil Ltd. The researcher used a sample size of 45 respondents and used questionnaires and interview guide to collect data and later the data was analyzed using the statistical package for social sciences (SPSS). Results of the first objective showed that risk assessment has a significant effect on financial management practices of Kama Oil Ltd. Supported by the following responses; 80% were positive to the statement that there is identifying potential risks and vulnerabilities; 66.6% who were also the majority were positive to the statement that respondents develop effective risk mitigation strategies; 62.3% who also constituted the majority were positive to the statement that assessments may not always accurately predict all potential risks. Results of the second objective revealed that audit planning has a significant effect on financial management practices of Kama Oil Ltd. Supported by the following responses; 66.7% of the respondents were positive to the statement that supplier management helps identify the most cost-effective suppliers and negotiate better pricing, ultimately reducing expenses, 66.6% forming the majority were positive to the statement that effective supplier management ensures that suppliers adhere to quality standards, resulting in improved product quality and customer satisfaction 66.6% forming the majority were positive to the statement that there is an enhancement of the efficiency and effectiveness of the audit process, it can be observed that 64.5% were positive to the statement that inadequate planning may result in missed risks or inefficient audit procedures. Results of the third objective showed that audit execution has a significant effect on financial management practices of Kama Oil Ltd. 68.9% had a positive response to the statement that respondents contribute to enhancing transparency and accountability within the organization. There is need for Kama Oil Ltd to implement comprehensive risk management frameworks that incorporate both qualitative and quantitative analysis techniques. Utilizing advanced data analytics and financial modeling tools helps to predict potential risks and their impacts more accurately.