Abstract The purpose of the study was to determine the relationship between the internal auditing and the performance of public institutions especially Rwanda revenue authority. In chapter one the researcher covered the background the study, stated the problem statement, the scope of the study and finally the signification of the study. In chapter two, the researcher initially started by defining the internal auditing and the performance of public institutions. In chapter three, the researcher provided information on the instruments used in collecting data. She showed the study population and sample size, and sampling design and procedure, mentioned both primary and secondary collection methods used and how data was analyzed, processed and presented including the limitations of the study. In chapter four, the researcher presented the findings of Rwanda revenue authority where the showed how the questionnaire were administered' and analyzed. Discussions of these findings were presented accordingly following researcher objectives. The researcher used tables, frequencies and percentages. The last chapter, the researcher summarized the findings and drew the conclusions from these findings and also provided recommendations to organizations under the study and other related organizations. The researcher found out that its helpful to set the guiding hypothesizes for successful achievement of those objectives. Also the researcher recommended that for internal audit to perform its duties well it should consider some procedures which the internal auditors have lo follow the manual. The researcher further suggested more research areas for future researchers.

ABLE OF CONTENTS

Declaration .............................................................................................. i

Approval .................................................................................................. i i

Dedication ............................................................................................... iii

Acknowledgement ................................................................................... iv

Abstract ................................................................................................... v

List Of Acronyms ..................................................................................... vi

Table Of Contents .................................................................................... viii

CHAPTER ONE ....................................................................................... 1

INTRODUCTION ..................................................................................... I

1.0 Introduction ...................................................................................... 1

1.1 Back Ground of the Study ................................................................. I

1.2 Statement of the Problem .................................................................. 3

1.3 Objectives of the study ...................................................................... 3

1.3.1 General Objectives .......................................................................... 3

1.3.2 Specific Objectives .......................................................................... 4

1.4 Research Questions ........................................................................... 4

1.5 Hypothesis of the study ..................................................................... 5

1.6 Scope of the study ............................................................................. 5

1. 7 Significance of the study ................................................................... 5

1.8 conceptual frame work ...................................................................... 6

CHAPTER TWO ...................................................................................... 7

LITERATURE REVIEW ........................................................................... 7

2.0 Introduction ...................................................................................... 7

2. 1 Review of Related Literature .............................................................. 7

2.1.1 Definitions of key Concepts ............................................................ 7

2.1.2 Auditing Terminologies ................................................................... 8

2.1.3 Historical Background of Auditing .................................................. 9

2.2 The effect of internal auditing on effective performance and service delivery

in public institution ............................................................................... 1 I

2.2.1 Distinctions between Internal Auditor and External Auditor in Prevention,

Detection, Reporting of Frauds and Errors ............................................. 13

2.2.2 Similarities amongst external and internal auditing ....................... IS

2.2.3 Prevention and Detection ............................................................... 15

2.3 The major constraints to Internal Auditing in Rwanda Revenue Authority

·············································································································· 15

2.3.1 Role in Corporate Governance ....................................................... 15

2.3.2 Role in risk management.. ............................................................. 16

2.3.3 Role in Organisational Control ....................................................... 

2.4.1 Specific objectives of internal audit ................................................ 21

2.4.2 Scope of Internal Audit work ......................................................... 22

VII

2.4.3 Internal Audit as an Internal Control.. ........................................... 22

2.5 Nature and Purpose of Internal Audit Assignment ............................ 23

2.5.1 Value for money ............................................................................ 23

CHAPTER THREE ................................................................................. 26

RESEARCH METHODOLOGY ................................................................ 26

3.0 Introduction ..................................................................................... 26

3. 1 Research design ............................................................................... 26

3.2 Study population .............................................................................. 26

3.4 Sample size ...................................................................................... 26

3.5 Sampling techniques ........................................................................ 28

3.6 Data collection instruments .............................................................. 28

3.7 Data processing and analysis ........................................................... 29

3.8 Limitations of the Study ................................................................... 29

CHAPTER FOUR ................................................................................... 30

PRESENTATION, INTERPRETATION AND ANALYSIS OF DATA .......... 30

4.0 Introduction ..................................................................................... 30

4.1 Attitudes of RRA staff towards the internal audit exercise ................. 30

4. 2 Frequency of internal audit assignments .......................................... 3 1

4.3 Constraints Faced By Internal Auditors In RRA ................................ 32

4.4 Internal audit helps the institution to detect errors and frauds ......... 34

4.6 Non Cooperation from Auditees ........................................................ 38

4. 7. Weak In tern a! Control System ......................................................... 39

4.8 Limited Resources and Work Load Activities ..................................... 39

4.9 Workers Perception about the Work of the Auditors .......................... 39

CHAPTER FIVE ..................................................................................... 41

5.0 Introduction .................................................................................. .41

5.1 Summary of findings ....................................................................... .41

5.2 Conclusions .................................................................................... .42

5.3 Recommendations ........................................................................... .43

5.4. Areas for future research ................................................................ .44

REFERENCES ....................................................................................... 45

APPENDIX II TIME FRAME ..................................................................... 51

APPENDIX III BUDGET ESTIMATE ........................................................ 52