Abstract:
The study was conducted to examine the factors impairing the independence of internal auditors in Rwanda: the case study of selected internal auditors’ members of the institute of internal auditors Chapter of Rwanda. It aimed to study the factors impairing the independence of internal auditors.
The study used a descriptive research design and targeted 186 respondents’ members of institute of internal auditors in Rwanda. Data was collect by using a questionnaire designed to answer research questions and meet research objectives. The study used SPSS Version 20 to analyze data through frequency tables in percentages, mean, standard deviation and correlation
The study revealed that internal auditors in Rwanda are moderately independent with other emerging threats to their independence. The study further found that independence of internal auditors in Rwanda is very strongly impaired by reporting structures where audit reports are subject to prior approval of management before being released and have given unreasonable deadlines to complete the audit test. The study also found that independence of internal auditors is impaired by traditional practices and limitation in scope by being restricted on some financial matters and limited access to some financial records.
The study has also shown that independence of internal auditors have significant implications on corporate governance through enhancement of discipline, accountability and transparency.
Finally the study revealed that audit committee protects the independence of internal auditors by providing independent forum and regular meetings between internal auditors and audit committee to raise the matters on weakness of the management.
The study recommended that independence of internal auditors need to be strengthened, the study again recommended that reporting structures need to be improved and abandonment of traditional practices of internal auditing profession. Finally the study recommended the audit committee to provide consistent meeting with internal auditors for protecting their independence.
