Audit and risk control among devolved units in Kenya

Abstract

The purpose of this paper was to evaluate audit function in relation to risk control among Kenyan devolved units. The county audit reports can provide a good source of knowledge on whether the devolved units have met the objectives for which resources were allocated. Using mixed-method survey, the study was conducted among Kenyan county government’s auditors. The target population comprised 94 auditors from whom primary data was gathered by the use of questionnaire with both closed-ended and open-ended questions. The study variables were measured using both the ordinal scale and Likert-type of scale. The Partial correlation analysis, multiple linear regression analysis, andstatistical tests such as the F-test and ANOVA were used. Multiple regression analysis was used to determine the relationship between the audit function and risk control. The study findings showed that, having easy access to all required audit information (M=3.49, SD=1.332) had an averagely high influence on risk control while having separate departments for accounting and audit staff (M=4.47,SD=0.959) had the greatest influence on risk control. On the other hand, establishing a corporate governance structure to safeguard the Kenyan County Governments’ assets from loss due to theft and other fraudulent activities (M=3.59, SD=1.055) measured above average on its influence on risk control. The top risks faced by devolved units in Kenya according to the findings of this study included financial risk (22.7%), internal control risk (12.0%), and fraudulent risk (9.3%). In conclusion, internal controls, human capital adequacy, audit information, timely implementation of audit findings had a substantially positive impact on risk control. This study recommends that Kenyan Counties should focus more on adequacy of audit information and human capital. Multi-unit approach to Kenyan Counties’ audit is also recommended owing to its effectiveness in financial risk control for enriched livelihoods of the Kenyan people.