Internal Auditing Case Study

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INTRODUCTION
1.0 Introduction
This chapter contains background of the study, the statement problem, the purpose of the study, the research objectives and justification of the study. The statement of the problem explains more about fraud in organization and how it can be prevented. Internal auditors have responsibility of designing internal control systems, evaluating them and also advising the management of organization on the risk areas, loopholes and where systems need to be improved.
1.1 Background
Fraud is an intentional actcommitted to secure unfair or unlawful gain this can be through corruption, stealing through books of accounts or inventories. Wilful fraud is a serious criminal case which calls for severe punishment.
The responsibility
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This is a step towards winning the war on corruption if the investigatory arm will do their work accordingly. Government around the world is responding to corporate scandals by instituting legislative and regulatory reforms that would be aimed at reducing these evil activities. Internal controls may be defined as a process effected by an entity board of directors, Management and other personnel designed to provide a reasonable assurance regarding the achievements of objectives primarily directed at improving internal controls. Much of the theory underlying internal auditing is derived from management consulting and public accounting…show more content…
1.3 Research Objectives
1.3.1 General Objective
To establish the effects of internal audit systems in prevention of frauds in Parastatals in Kenya.
1.3.2 Specific Objectives.
1. To find out how independency of internal auditors affect internal audit system in prevention of frauds in TARDA.
2. To establish the effect of the Board of Directors composition on prevention of fraud in TARDA.
3. To find out how organizational structure affects internal audit systems on prevention of frauds inTARDA.
4. To determine whether internal control system is effective in preventing fraud in TARDA.
1.4 Research Questions
1. How does the independency of internal audit affect internal audit systems in the prevention of frauds in TARDA?
2. How does the Board of Director’s composition affect internal audit system in the prevention of frauds in TARDA?
3. To what extent does the organizational structure affect prevention of frauds in TARDA?
4. How do the internal control systems of an organization affect prevention of fraud in

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