Internal Auditing as Value Addition to Performance Improvement in Ghana’s SOEs

This is the authors' abstract. We don't add key points for this paper.

State-owned enterprises (SOEs) play a vital role in an economy, providing essential goods and services to citizens. However, they often face governance, transparency, and accountability challenges, leading to poor performance and waste of public resources. Thus, we examine the role of internal auditing in adding value to performance improvement in Ghana’s SOEs. We employ quantitative and cross-sectional survey designs to collect data from 1150 internal auditors across the SOEs and utilize macro-process modeling to analyze the data. We identify four indicators of internal auditing as value addition: internal audit effectiveness, quality, independence and resources; they have strong significant positive relationships with performance improvement (organizational performance and governance and accountability). However, these relationships are negatively moderated by organizational complexity (structural, process and systemic). We provide empirical evidence on the nuanced interplay between internal auditing, organizational complexity, and performance improvement in the context of Ghana’s SOEs, offering actionable insights for policymakers and practitioners to enhance governance and performance in emerging economies. Our findings underscore the need for SOEs to prioritize internal audit effectiveness and manage complexity to maximize performance gains.