EFFECTS OF INTERNAL AUDITING ON MANAGEMENT PERFORMANCE OF THE PUBLIC SECTOR IN TANZANIA

Abstract

This study aimed to evaluate the effects of internal auditing on management performance focusing on the Tanzania Revenue Authority in the Arusha region. Specific objectives of this study were to examine the effect of compliance audits, fraud detection and risk management on the management performance of the Tanzania Revenue Authority. Control theory was adopted in this study. This study adopted a positivism research philosophy, using a quantitative approach within a descriptive research design. The sample of 141 was selected using a simple random sampling technique for participant selection. Data collection consists of primary data via a structured questionnaire and secondary data from documentary reviews. Analysis involves quantitative methods, using SPSS for descriptive statistics and inferential statistics (correlation and regression analysis). The study unveiled that compliance audits are conducted regularly within the organization, and the findings from these audits are deemed actionable, leading to tangible improvements. The study unveiled that, the clarity of procedures for investigating fraud alerts and the regular updating of fraud detection measures were less emphasized. Also, the study showed that regular assessment and prioritization of organizational risks were highlighted, along with effective implementation and monitoring of risk mitigation strategies. The study found strong positive correlations between compliance audits and fraud detection with management performance, while risk management showed a moderate positive correlation, all statistically significant. The Tanzania Revenue Authority should enhance the frequency and scope of compliance audits to ensure thorough oversight of regulatory adherence. Strengthening fraud detection through advanced technologies and training is also essential, particularly with automated systems to quickly identify suspicious activities. Additionally, TRA needs an integrated risk management framework that aligns with its strategic objectives, including regular risk assessments to prioritize potential threats. Future research should explore how external factors, such as regulatory changes and technological advancements, impact internal auditing effectiveness, offering insights for public institutions to improve compliance and operational efficiency