Enhancing operational efficiency and financial performance through internal audit : a case study of BLESSING Finance

Abstract

Internal audits serve as critical assurance services that support the enhancement of operational efficiency and financial performance within organizations. This study examines the role of internal auditing in improving these aspects in privatised financial institutions, specifically focusing on BLESSING Finance. Given the profit-driven orientation of management in such institutions, there is a pressing need to identify strategies that maximize profitability. Enhancing operational efficiency is pivotal, as it reduces operational costs while increasing productivity. Internal auditing contributes significantly by identifying deficiencies within internal controls and providing audit opinions that inform management in drafting appropriate policies and procedures. This research utilized a mixed-methods approach, combining qualitative data from interviews and quantitative data from questionnaires, to assess the impact of internal auditing on operational efficiency and financial performance. The findings demonstrate that internal audits have a positive and significant effect on both operational efficiency and financial performance, highlighting the value of internal audits as a strategic tool for financial institutions. It is recommended that BLESSING Finance’s management prioritize the recruitment of qualified auditors with the necessary skills and expertise to perform audits effectively and efficiently, thereby further enhancing the institution’s operational efficiency and financial outcomes. The study underscores the importance of robust internal audit functions as a key driver of strategic and financial success in financial institutions.