The effect of external audit on financial performance and accountability of local government organisation in Ghana a study of Effutu Municipal Assembly (Winneba)

Abstract

The roles of external auditors have been under the spotlight due to the strategic positions they occupy to ensure accountability by public sector managers. This study examines the role of external auditors in the financial accountability and transparency regime of the Ghanaian local governance structure. The study analyzed the effectiveness of the external audit engagement, the quality of delivery, and the quality of people and service regarding financial accountability and transparency at the Local Government Organizations. A quantitative approach was used in the form of questionnaires to collect data. A purposive sampling technique was used in the selection of respondents. A sample size of fifty (50) respondents was selected from the Effutu Municipal Assembly comprising management, senior, and junior staff. SPSS was used in the data analysis and the results were presented in tables. From the findings, it was observed that management support the existence of adequate and competent internal audit staff, and approved external audit standards the activities of the Municipal were statistically significant and positively related to the external audit effectiveness to ensure financial accountability and transparency at the Effutu Municipal Assembly. The study recommends that the scope of the internal audit functions should be given a high status in the assembly to avoid manipulation by management. The internal Chief Auditors of the various assemblies should be in high positions as the Finance Officers, this will the internal auditors to operate with a high level of autonomy in their delivery. xiThe scope of the external audit should also include performance auditing and the auditing team should be rotated preferably every year to enhance the independence of the external auditors. There should be in-service training and workshops regularly for both the internal and external auditors to update them on the current trends of the Auditing profession to enhance their competence and knowledge in the profession.