CONTRIBUTION OF INTERNAL AUDIT ON THE FINANCIAL PERFORMANCE OF BANKING INSTITUTIONS IN RWANDA CASE STUDY: ACCESS BANK RWANDA PLC RWANDA (2020-2023)

Abstract

This study investigates the Contribution of internal audit on the financial performance of banking institutions in Rwanda, case study: Access bank Rwanda PLC Rwanda (2020-2023), the general objective was to examine the contribution of internal audit on the financial performance of banking institutions in Rwanda, with specific objectives which are to assess effectiveness of internal audit functions in Access Bank Rwanda PLC Rwanda, and to analyze the effect of internal audit system on financial performance of Access Bank Rwanda PLC Rwanda. The description research design was used for frequencies, averages and other statistical calculations. Often the best approach, prior to writing descriptive research, is to conduct a survey investigation. Data was collected from 58 respondents who were employees of Access Bank Rwanda PLC. The analysis employed descriptive statistics and data were interpreted using SPSS. Key findings include: The findings on table 3 reflect the mean value of 3.72 indicates that, on average, respondents tend to agree that internal audits play a significant role in ensuring effective internal control within the bank. Since the mean is close to 4 on a 5-point scale, it suggests a generally positive view toward the contribution of internal audits. The standard deviation of 1.542 reflects the variability in respondents' opinions. A standard deviation of this magnitude indicates a moderate spread of responses, suggesting that while many respondents agree on the positive impact of internal audits, there is some degree of variability in their opinions. This variability might indicate that some respondents have a less favorable view or are neutral regarding the role of internal audits, while others strongly agree. The data provided by table 7 above shows the responses from a sample of 58 participants regarding the perception of the effectiveness of internal audits in increasing the profitability of Access Bank Rwanda PLC. The mean score of 4.03 indicates that, on average, the respondents agree that internal audits significantly help Access Bank Rwanda PLC in enhancing its profitability with a mean above 4.00 suggests a strong consensus among the respondents that internal audits are beneficial to the bank's profitability. The standard deviation of 1.075 indicates that there is some variability in the responses, but it is relatively low. A standard deviation around 1.075 suggests that while most respondents agree on the effectiveness of internal audits, there is still some divergence in opinions, with a few respondents perhaps being less convinced or having different perspectives on the degree of impact internal audits have on profitability. Table 11findings shows that the variation of equity, from 2020 to 2021 increased from 20,863,994Rwf to 22,659,229Rwf which is 8% of increase, in 2021 the Equity increased from 22,659,229Rwf to 27,387,180Rwf which is equal to 17.26% of increase 2022 and from 2022 to 2023 increased from 27,387,180Rwf to 33,366,882Rwf which is 18% of increase, in 2023.