IMPACT OF INTERNAL AUDIT ON THE PERFORMANCE OF MANUFACTURING COMPANIES OF RWANDA A CASE OF BRALIRWA PLC (2021-2023)

Abstract

The research titled "The Impact of Internal audit on the Performance of Manufacturing Companies: A Case Study of Bralirwa Plc" aimed to assess how internal audit influences the financial performance of manufacturing companies, specifically Bralirwa Plc. The general objective of the study was to evaluate the effect of internal audit practices on Bralirwa's financial performance, while the specific objectives were: (i) To evaluate the impact of internal auditor competence on the performance of Bralirwa; (ii) To examine the impact of internal auditor independence on the performance of Bralirwa; and (iii) To assess the impact of internal auditor management support on the performance of Bralirwa. The study adopted a descriptive research design, utilizing both qualitative and quantitative methods. Data were collected through a combination of questionnaires, interviews, and documentation reviews targeting 116 respondents from Bralirwa Plc. Both primary and secondary data were used, with the primary data gathered directly from Bralirwa's employees. The data were analyzed using SPSS to generate descriptive statistics and inferential analysis, providing insight into the relationship between internal audit practices and financial performance. Findings revealed that internal auditor competence significantly impacts Bralirwa's financial performance, with 100% of respondents affirming the competence of auditors, and the majority agreeing that competence leads to improved operational efficiency and profitability. Additionally, internal auditor independence was found to positively influence financial performance, with all respondents (100%) agreeing that independence enhances transparency, accountability, and financial decision-making. Lastly, the study demonstrated that management support for internal auditors plays a crucial role in enhancing Bralirwa's financial performance, contributing to better asset utilization and operational efficiency. The conclusion of the study is that internal audit practices, particularly auditor competence, independence, and management support, are key factors in driving financial performance at Bralirwa Plc. The recommendations for Bralirwa Plc include investing in continuous professional development for auditors, strengthening management support for the audit function, and ensuring the independence of auditors to maintain transparency. Future research could explore the impact of internal auditing in other sectors, while policymakers should consider strengthening corporate governance regulations and auditor independence standards in Rwanda. This study contributes valuable insights into the role of internal audits in improving the financial sustainability of manufacturing companies in Rwanda.