Internal auditing and financial performance of savings and credit cooperatives (SACCOS) in uganda: A case study of Wazalendo Sacco – Entebbe Branch

Abstract

The study is about internal auditing and financial performance in SACCOs in Uganda, using a case study of Wazalendo SACCO –Entebbe Branch. The study focused on three (3) specific objectives: To establish whether internal audit standards are complied with to enhance financial performance; to establish whether monitoring and control activities enhance financial performance and to examine whether credit risk management practices enhance financial performance of Wazelendo SACCO-Entebbe Branch.

The study used a target population of 1000 selected from WSACCO staffs and a sample of 286 respondents was selected using Neumann’s formula (2000), but 265 respondents were considered for data analysis. Cross-section research design was employed and both quantitative and qualitative approaches of data collection were used. Data were analyzed using descriptive statistics, Pearson correlation, coefficient, regression analysis, and analysis of variance (ANOVA); where the statistics proved that R2=0.630; significance level was found positive. This means that internal auditing improved financial performance of WSACCO-Entebbe.

Findings indicated that compliance with internal audit standards, monitoring and control activities and credit risk management practices have enhanced financial performance in WSACCO-Entebbe Branch, combined can explain 62.9% of the variance in financial performance (Adjusted R² = 0.629 and p≤0.01), implying that other factors other than these three are responsible for the 37.1% variance in financial performance.

The study concluded that complying with internal audit standards, proper monitoring and control activities and effective credit risk management practices enhanced financial performance of Wazelendo SACCO-Entebbe Branch.

The study recommended that WSACCO management should keep organizing seminars and workshops whereby internal auditors would be trained frequently by experts either internally or externally. Internal Auditors must have sufficient proficiency and training to carry out the tasks assigned to them. The auditor’s work must be carefully directed, supervised and reviewed