Internal Auditing: Comparative Study of Kenyan Telecommunications Company
Introduction
Internal auditing refers to a systematic process of analyzing business processes and activities, aiming to determine faulty, dysfunctional and deficient practices. As it involves the measurement of compliance with the respective policies and procedures, internal auditing is responsible for assisting in the deterrence of fraud through examining and evaluating the adequacy and effectiveness of control, proportionate with the extent of the potential exposure/risk in the various functions of the organization’s operations. It would be important for businesses to develop strategies to prevent or detect business fraud especially in a competitive environment of heightened public expectations and new expectations for auditors.
The compliance with statutory and professional requirements is vested with auditors. Auditors are not implying that financial statements are free from bias or they have been verified. The role of auditors was to examine the reasonableness of management’s justifications for its representations. Hence, auditors are required to form an opinion on whether the financial statements show a true and fair view. However, although auditors are required to form opinions, this does not necessarily mean that financial statements did show true and fair view. The concern now is whether the true and fair view is the message that auditors are trying to convey (Ramazanoglu and Holland 2002, pp. 154-155).
In Kenya, internal auditors are required to possess professional qualification and should be familiar with financial regulations set forth by the government.
The telecommunications industry, on the other hand, is faced with challenges of expanding the network, enhancing service quality and features and upgrading operational efficiency and productivity. A market oriented economy, it is critical for telecommunication companies in Kenya to be cost-effective specially that maintenance and infrastructure costs are high. Auditing is important but in telecommunications industry in general auditing takes different meaning. Telecom audit simply means conducting independent interview and examination of system records based on their relative cost, security and reliability.
In this study, how telecommunication companies in Kenya subject themselves in internal auditing will be explored. Prevalent auditing methods and the critical steps for these Kenyan telecommunication companies have not been, on my best knowledge, explored in the literatures.
Aims and objectives
The main aim of this study is to evaluate and compare how Kenyan telecommunication companies approach internal auditing processes. In lieu with this, the following research objectives will be addressed:
· To analyze the importance of internal auditing to telecommunication companies
· To investigate different ways of doing audit trails within the telecommunication industry
· To study the future of internal auditing within Kenyan telecommunication industry
Methodology
The research strategy that the study will utilize is the descriptive method. A descriptive research intends to present facts concerning the nature and status of a situation, as it exists at the time of the study and to describe present conditions, events or systems based on the impressions or reactions of the respondents of the research (Creswell, 1994). It is also concerned with relationships and practices that exist, beliefs and processes that are ongoing, effects that are being felt, or trends that are developing (Best, 1970). This research is also cross-sectional because of limited time. This research is a study of a particular phenomenon (or phenomena) at a particular time. (Saunders et al, 2003) Accordingly, cross-sectional studies often employ the survey strategy, and they may be seeking to describe the incidence of a phenomenon or to compare factors in different organizations.
In this study, primary and secondary research will be both incorporated. The reason for this is to be able to provide adequate discussion for the readers that will help them understand more about the issue and the different variables that involve with it. The primary data for the study will be represented by the survey results that will be acquired from the respondents. On the other hand, the literature reviews to be presented in the second chapter of the study will represent the secondary data of the study. The secondary sources of data will come from published articles from books, journals, theses and related studies, company reports and official statistics.
References
Best, J. W. (1970). Research in Education, 2nd Ed. Englewood Cliffs, N.J.: Prentice Hall, Inc.
Creswell, J.W. 1994. Research design. Qualitative and quantitative approaches. Thousand Oaks, California: Sage.
Ramazanoglu, C. and Holland, J. (2002). Communication through the Audit Report: What is the Auditor. Sage Publications Inc: London.
Saunders, M., Lewis, P. and Thornhill, A. (2003). Research Methods for Business Students, 3rd Ed. London: Prentice Hall Financial Times.
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