INTERNAL AUDIT PRACTICES AND FINANCIAL PERFORMANCE OF NAIROBI CITY COUNTY GOVERNMENT, KENYA

T his study determine d the effect of internal audit practices on financial performance of Nairobi City County Government. I nternal audit practices were examined from the perspectives of professional competency, internal controls, internal audit standards, and internal audit independence. Three theories ; the agency theory, the attribution theory, and the procedural justice theory supported this research. The 106 employees in job groups K and higher from the Finance department in the Directorate of Accountants, Revenue, Procurement, and Internal Audit of the Nairobi County Government were the target population. This study used a census design due to the manageability and the size of the population of study. Structured questionnaires were employed as the primary data collection instrument. To analyze the data in this study, descriptive statistics such as percentages, means, and St andard deviation were employed. Additionally, inferential statistics such as regression and correlation were utilized. Tables were used to illustrate the statistical data. The study findings, which were supported by inferential statistics such as the Pearson correlation study, revealed a significant and positive correlation among the variables, with values ranging from 0.476217 to 0.54654. The findings were further validated through multiple regression analysis, providing predictive insights into the data. Based on these research outcomes, the researcher concluded that internal audit practices have a significant impact on the financial performance of the Nairobi County government. Consequently, it wa s recommended to strengthen and improve internal auditing practices, ensuring their effective implementation and reporting, to optimize the utilization of County resources and enhance financial performance. The study also suggest ed the implementation of additional financial reporting procedures to promote accountability in the utilization of County resources. Furthermore, it wa s recommended to prioritize audit competence to mitigate potential threats to the misuse of public funds. Key Words: Professional Competency, Internal Controls, Internal Audit Standards, Audit Independence CITATION : Murage, A. C., & Mathenge, T. (2023). Internal audit practices and financial performance of Nairobi City County Government, Kenya. The Strategic Journal of Business & Change Management, 10 (4), 90 – 105. http://dx.doi.org/10.61426/sjbcm.v10i4.2737