IMPACT OF EXTRERNAL AUDIT TO THE PERFORMANCE OF FINANCIAL INSTITUTIONS IN RWANDA A CASE STUDY OF BANK OF KIGALI /RUBAVU-BRANCH (2021-2023)

Abstract

The study aimed at comprehensively examine and analyse the relationship between external audits and the performance of the Bank of Kigali within the Rwandan banking sector during the specified timeframe, and specifically to assess the effectiveness of external auditing within Bank of Kigali Plc; to analyse the performance of Bank of Kigali Plc within the period of the study and to determine the relationship between external audit to performance of Bank of Kigali Plc. The study used a descriptive research design and used also mixed method (Quantitative and qualitative methods) in data collection and analysis. The population size for this study was composed of 28 employees of BK Group Plc in Rubavu District. Respondents were selected using purposive sampling technique. The study used both primary and secondary data as sources of information. Primary data were collected by using questionnaire and secondary data were collected using documentary review. Data collected was recorded and coded into (SPSS) software version 16.0 and they were analysed using frequencies, mean and standard deviations. Multiple regression analysis was used to enable the researcher to establish the relationship between the variables under study. The study found out that there is a positive high relationship between external audit to performance of Bank of Kigali Plc. The result found from regression analysis shows that the Multiple R is equal to 0.869 which high relationship between external audit and financial performance of BK Plc. The coefficient of determination, adjusted R Square indicates the variation in the dependent variable (financial performance) due to changes in the independent variable. The findings in the above table the value of adjusted R square was 0.511. This indicates that there was a variation of 51.1% in financial performance of BK Plc due to changes external audit. However, 48.9% of the variation in the financial performance of BK Plc is explained by other factors which are not explained by this model. The study recommended that BK Plc should be reviewing and restrategizing its audit plan at the end of every financial year so as to improve their efficiency. BK Plc should put much focus on qualified personnel; this may help it to minimize costs resulting from investing in hireling due to retention and maximize profit and profitability as intended.