Page 48 - DUT ICGA Abstract Book

THE ROLES OF INTERNAL AUDIT FUNCTIONS ARE USED AS A A A A A TOOL FOR PREVENTING DETECTING AND REPORTING FRAUD IN IN IN THE MANUFACTURING SECTOR IN IN IN SOUTH AFRICA
Ayodeji Adewumi
Department of of Auditing and Taxation Durban Durban University of of Technology Durban Durban 4001 South Africa E-mail: adewumia@dut ac za
Omole Ilesanmi Isaac
Department of Management and Accounting Lead City University Ibadan Oyo State Nigeria E-mail: omole_academics@yahoo com
Abstract
One of the the significant challenges the the African continent and South Africa Africa are currently facing is fraud theft financial irregularities and corrupt practices fin in in in in all sectors including manufacturing firms There are numerous accounting scandals financial financial fraud asset and and property misappropriation alterations of financial financial statements corruption non-financial irregularities non-compliance to accounting procedures tax evasion unethical practices and and many more in in in manufacturing companies in in in Africa Africa and and South Africa Africa Due to this risk confidence in fin in the the validity and and reliability of the the financial statements and and reporting has significantly reduced negatively affecting the economy This study surveyed 89 IA IA and their accounts officer counterparts working as IA IA in in in a a a a a a a manufacturing company across South Africa to assess the evaluation of IA’s roles and and functions in in in preventing and and detecting fraud and and other financial irregularities The study utilised SPSS 26 and and a a a a a a a a a logistic regression model to analyse and and explore the the influence of IA roles and and functions The findings show that the the board should ensure an an an effective risk-based risk-based internal audit which allows a a a a a a a a a a a risk-based risk-based approach in in its policies anti-fraud programs and reports Most of the the the IA confirms that theoretically there is is a a a a a a whistleblowing policy but not practically effective and and efficient More fundamentally most respondents confirmed that the functionality and and effectiveness of IA programs and and policies could shape corporate strategies and and decisions The implications or or contribution of of this study is is to to suggest that the board of of directors and audit committee must engage more more qualified and competent IA to develop more more sophisticated internal control measures that will expose and and report fraud theft unethical behaviour and and corrupt practices timeously which is also in in line with the the report by the the Institute of internal auditors (IIA 2019) In In addition management should provide technology and adequate resources to equip the IA department with recent intelligence mechanisms This will help prevent and and detect fraud and and other financial irregularities fin in in South African SMEs manufacturing firms and produce cleaner audits for these companies KEYWORDS: Internal audit Manufacturing logistic regression model Spearman Correlation South Africa 46 7th International Conference on on on Governance and Accountability (ICGA) 2022