RISK BASED AUDITING AND CORPORATE GOVERNANCE COMPLIANCE AMONG COMMERCIAL STATE CORPORATIONS IN KENYA
Abstract
This study investigated the consequence of risk-based reviewing on corporate governance compliance among commercial state companies in Kenya. This study used a descriptive cross-sectional method of analysis. The target population was Kenya's 33 commercial state businesses. The unit of observation was 492 Commercial State Corporation management employees and Chief Internal Auditors. Purposive sampling selected 112 interviewees. Self-administered surveys captured primary data. SPSS 27.0 analyzed data. Tables displayed data. Content analysis presented open-ended question qualitative data in prose. The study found that all personnel of the corporations were responsible for identifying and managing risks, and risk identification was a constitutive part of audit risk management practice with the objective to identify risk exposures inherent to the organizations’ processes. The study further found that the risk committee and sub-committee were not mandated by the board. The study also found that it was uncertain whether the management was devoted to upholding moral principles in the way the corporations were run. The study found that it was uncertain whether the problem of planning based on risks was being actively discussed by the auditing panel, and the firms implemented strategies agreed upon yearly goal to minimize risk variables following leadership conversation. It was determined through this study that audit quality, followed by audit risk management and internal control, had the greatest impact on the degree to which commercial state corporations in Kenya complied with best practices in corporate governance, while audit planning had the smallest impact. It is strongly recommended that organizations embrace a thorough and systematic approach when it comes to the assessment and evaluation of possible dangers to their operations. It is important that this procedure not only identify dangers but also evaluate and appraise them thoroughly. Research findings suggested that Kenya's commercial state enterprises improve audit quality by paying more attention to assigned tasks. The report also suggested that Kenya's commercial state enterprises give priority to developing a culture based on high ethical standards and honest dealings with customers.
Key Words: Risk Management, Audit Quality, Internal Control, Audit Planning, Risk Based Auditing
CITATION: Njenga, K. K., & Warui, F. (2023). Risk based auditing and corporate governance compliance among commercial state corporations in Kenya. The Strategic Journal of Business & Change Management, 10 (4), 742 – 761. http://dx.doi.org/10.61426/sjbcm.v10i4.2784
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DOI: http://dx.doi.org/10.61426/sjbcm.v10i4.2784
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