An Assessment of the Impact of Internal audit Units on Improving the Financial Performance of Budetry Entities in Afghanistan
By: Shir Ahmad Joyenda
Abstract:
The fight against corruption, financial misconduct, and the misappropriation of public assets necessitates the establishment of effective oversight mechanisms across all government institutions. Within this framework, the Internal Audit Unit, as a fundamental pillar of control and accountability, plays a crucial role in promoting financial transparency. This study investigates the impact of internal auditing on the improvement of financial performance in Afghanistan’s budgetary units. The research is applied in nature and employs a descriptive–analytical and survey-based approach. The statistical population comprised directors, heads of departments, internal auditors, and financial experts from ministries and independent budgetary organizations. Using Cochran’s formula with a 95% confidence level and a 5% margin of error, a sample of 205 respondents was determined. Data were collected through a researcher-designed questionnaire and analyzed using SPSS version 26. Content validity was confirmed by the academic supervisor, scientific consultants, and financial specialists, while reliability was verified through Cronbach’s alpha, ranging from 0.612 to 0.841 for the variables and 0.933 for the overall questionnaire, indicating excellent internal consistency.The findings, based on Spearman’s correlation test, demonstrated a positive and significant relationship between internal audit dimensions—including “unit size,” “qualified personnel,” “independence,” “support from top management,” “compliance with standards,” and “evaluation of controls”—and the improvement of financial performance. Nevertheless, the results of multiple regression analysis revealed that only three components— “independence of internal audit,” “adherence to international internal auditing standards,” and “evaluation of internal controls by auditors”—had a significant positive effect. Overall, the results highlight that internal auditing serves as a key driver in enhancing the financial performance of budgetary units.
Keywords: Internal Audit, Financial Performance, Budgetary Units, Afghanistan