TITLE:
Internal Audit Practices and Financial Management Reforms: The Case of Payroll Accounting System in the Tanzania Public Sector
AUTHORS:
Nuru Kalufya, Riziki M. Nyello
KEYWORDS:
Internal Audit Practices, Payroll Accounting System and Public Sector
JOURNAL NAME:
Open Journal of Business and Management,
Vol.9 No.3,
May
13,
2021
ABSTRACT: Several
initiatives as part of the public sector financial management reforms to
improve the payroll system in Tanzania were introduced. Despite such
initiatives, different cases of fraudulent were reported which raised the need for examining the influence of internal
audit practices on the payroll accounting
performance. The article involved 240 respondents from 321 public institutions.
Stratified sampling technique and questionnaires were used as sampling
technique and data collection instrument respectively while structural equation
model (SEM) and Mean were used in data analysis. Focusing on the institutional
theory and contingency theory, the results revealed that control environment had significantly positive influence on payroll record processing while risk-based internal audit had significantly positive
influence on payroll reconciliation. Internal auditors’ professional competence
had significantly positive
influence on payroll reconciliation, payroll record processing and payroll accounting system coverage.
Furthermore, internal audit work performance had significantly positive influence on payroll reconciliation and payroll accounting
system coverage. Among others, the article recommends that managers should
consider internal audit function as a
strategic function and not operational to strengthen the payroll accounting
system.