Effect of Internal Audit Timeliness on Financial Performance of Deposit Taking Savings and Credit Cooperatives in Western Kenya

Abstract

Savings and Credit Cooperatives (SACCOs) in Kenya and all over the world play a key part in development of the nations. They have tremendously contributed to the economic growth of third world countries in the world. The objective of the study was to determine the influence internal audit timeliness on financial performance of Saccos in Western Kenya. The main theory was signalling theory. The study was guided by descriptive survey research design. The study targeted 129 internal auditors, accountants, finance officers and chief executive officers in all the 15 Deposit Taking SACCOS. Stratified random and simple sampling techniques were used to select 97 respondents from a target of 129. The study used primary data obtained through self-administered structured questionnaire. Data was analysed using both descriptive and inferential statistics, thus for descriptive mean, standard deviation, frequency and percentages were used. For inferential, correlation analysis and regression was used. Data was analysed using the SPSS 26 software. The results indicated that one-unit increase in internal audit timeliness would results to significant increase in financial performance by 0.339 units (P=0.000). Internal audit timeliness has significant positive effect on financial performance of deposit taking Saccos. The study concludes that the internal audit team's timely follow-up on audit issues showcases a proactive approach to financial risks. Timely resolution of audit issues reflects accountability and drives continuous improvement. The study recommended that top management should provide sufficient financial and human resources for internal audit activities especially through continuous professional development of the internal audit staff.