Internal Audit and Business Resilience in Power Sector. A Case of Geothermal Development Company

Abstract

Over years, internal auditors’ roles are changing from checking compliance issues to giving a strategic view of the organization processes. Internal auditors play noble role in evaluating the anticipated level of success of a project. This research sought to establish how risk management, business controls, governance and business advisory contribute to business resilience in Geothermal Development Company Limited. The study was anchored on the balanced score card, strategic choice theory, transient advantage theory, the strategic management theory, complexity theory and the normal accident theory. The study focused on 3 GDC operation regions with a target population of 200 staff based in the office and in the field. The research study used primary data collection method employing a semi-structured questionnaire. Post collecting data, descriptive and inferential statistics were employed in the analysis. Correlation and regression analysis was conducted to establish the relationships between the variables. The presentation of results was through tables and figures. The study found that risk management had a positive and significant effect on business resilience of GDC; business advisory had a positive and significant effect on business resilience of GDC; internal controls had a positive and significant effect on business resilience of GDC; and governance had a positive and significant effect on business resilience of GDC. The study concluded that the internal audits positively and significantly influenced business resilience of GDC. From the study, internal audit plays a critical role in enhancing business resilience at GDC through effective risk management, robust governance, and reliable internal business controls. The study recommended organizations to place internal audit functions at strategic hierarchical positions as well as implement its recommendations. To bolster business resilience at GDC, it is recommended the company strengthen risk management practices, enhance governance structures, and improve internal business controls. Investing in internal audit capacity building and expanding business advisory services can further optimize the internal audit function. Additionally, GDC should consider benchmarking and collaborating with peer organizations to identify areas for improvement and share best practices within the power sector. Keywords: Internal Audits, GDC, risk management, business advisory, business controls, governance, business resilience