IMPORTANCE OF INTERNAL AUDIT ON THE PERFORMANCE OF MANUFACTURING COMPANY CASE STUDY: BRALIRWA PERIOD: 2020-2023

Abstract

This study investigates the Importance of Internal Audit on the Performance of Manufacturing Company, Case Study: Bralirwa PLC, Period: 2020-2023” the general objective was to assess the Contribution of internal audit on financial performance of manufacturing company in Rwanda, using Bralirwa as a case study with specific objectives which are to assess the effectiveness of Internal Audit practices at Bralirwa (Headquarter), to examine the level of financial performance of Bralirwa (Headquarter) 2021-2023, To analyze the relationship between internal audit and financial performance at Bralirwa, with the hypothesis which are there is internal audit effective in Bralirwa from 2021-2023 and there is positive relationship between internal audit and financial performance from 2021- 2023.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 35 respondents who were employees of Bralirwa PLC. Key findings include: The statistical information supplied by table 7 reveals that the total respondent 100% say that Bralirwa PLC feed forward audit is carried out. The researcher found out that feed forward audit help managers to plan work and regulate resources effectively. Table 8 reveals that 57% of the total respondents strongly agreed that Bralirwa PLC has concurrent audit, 37% agreed and the remaining 6% were not sure. Table 8 reveals that 57% of the total respondents strongly agreed that Bralirwa PLC has concurrent audit, 37% agreed and the remaining 6% were not sure. This implies that the majority of respondent 95% agreed that this type of audit is used to identify and prevent problems in real time. The researcher wanted to know if this audit help Bralirwa PLC to make sure that the highest quality services is provided and with the views from respondent confirmed that. Table 19 above shows the researcher were interested in knowing the rate of increase of Bralirwa‟s turnover. This could help the researcher to draw conclusion and give recommendations on performance improvement in this company as a result of effective internal audit practice and it is clear that Bralirwa‟s turnovers were increased by 15.39% in 2021; increased 27.55% in 2022 and increased by 16.5% in 2023. Normally this is a very considerable increase and the most important reason behind evolution is how well they applied internal audit. It was also revealed that internal audit applied affect general performance of the company. Through the data collected to the Bralirwa PLC, mainly in financial report show that the turnover increased each year except in 2020. Therefore, the evolutions of turnover reflect to the many factors such as good management in general. Table 23 shows that from 2020 up to 2023 the ratios of gross profit margin were 39.94%; 41.37%; 45.47% and 45.74%respectively. This means that in 2020 for RWF 100 of sales, Bralirwa PLC got RWF 39.94; in 2021 for 100 RWF, the company got RWF 41.37and in 2021 for 100 RWF, the company got RWF 45.47 and in 2022 for 100 RWF, the company got RWF 45.74. Normally these prove that they have been able to manage well it investment during the covered period and this does not happen accidently; it depends on how well company‟s internal audit works effectively and influence their customers to consume products.