Abstract:
The study aimed to examine the influence of internal audit characteristics, risk
management practices, and institutional factors on risk management effectiveness in
Local Government Authorities (LGAs) in the Njombe Region, Tanzania. A quantitative
approach, guided by the positivist philosophy, used structured questionnaires to gather
data from internal auditors, audit committee members, risk management committee
members, and other staff. A descriptive research design was adopted, and stratified and
simple random sampling resulted in 72 respondents. Data analysis included both
descriptive statistics (frequencies and means) and inferential statistics (correlation
analysis), with qualitative data from open-ended questions analyzed using thematic
analysis. Reliability was ensured through Cronbach’s alpha, and validity was
strengthened through pre-testing and established measures. Ethical considerations,
including informed consent and confidentiality, were rigorously maintained throughout
the study. The study revealed that internal audit practices significantly enhance risk
management, with 40% of respondents stating that internal audit reports "always"
provide actionable recommendations. Regression analysis showed that internal audit
practices accounted for 72% of the variance in risk management effectiveness (R squared = 0.72, F-statistic = 24.18, p < 0.001), with a Beta value of 5.15, indicating that
for every unit improvement in internal audit practices, risk management effectiveness
increased by 5.15 units. Regarding audit committee independence, 35.71% of
respondents perceived the committee as independent, and 42.86% noted that the
committee always raises concerns about risk management, with an R-squared of 0.67
and a Beta value of 4.95, indicating an improvement of 4.95 units in risk management
effectiveness. For the risk management committee, 42.86% rated members as very
knowledgeable, and 71.42% believed the committee’s composition aligned with the
organization's risk profile, with an R-squared of 0.71 (F-statistic = 27.41, p < 0.001) and
a Beta value of 5.05, demonstrating its positive impact on risk practices. The study
recommended enhancing audit report clarity, providing regular training for audit.
