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The Effect Of Internal Audit On The Performance Of The Private Firm

The Effect Of Internal Audit On The Performance Of The Private Firm

CHAPTER ONE
INTRODUCTION
1.1. Background of the Study
Internal audit is a management tool used in ensuring transparency in conduct of business. Auditing took the entire stage after the industrial revolution since before this period, transactions increased, precipitated by the development of large corporations, limited liability companies,

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there became the need for divorce of ownership from control. Hence mangers and shareholders became two different partners. Then it became apparent for mangers to render accounts of their stewardship to those who has pooled their resources together for the business .it is noteworthy that an independent person be appointed to represent the interest of the shareholders in reviewing the report of mangers to ensure accuracy and transparency. This is how auditing started.
We have two types of sectors. Public and Private sectors. Public sector is the governments initiate and control in economic activities with the aim of rendering services at a breakeven point.
The private sector is the private initiative aimed at profit/wealth maximization for the owners Mill champ (1996) defines internal audit as an independent appraisal.

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