INTERNAL AUDIT EFFECTIVENESS AND FINANCIAL ACCOUNTABILITY IN UGANDA’S GOVERNMENT AGENCIES

Abstract

This study aimed to explore the relationship between internal audit effectiveness and financial accountability in Uganda's government agencies. It addressed the persistent financial accountability challenges faced by these agencies, including budget variances, procurement inefficiencies, and regulatory non-compliance. A cross-sectional research design was employed, targeting 40 government agencies in Uganda. A sample of 38 agencies was selected using proportionate simple random sampling. Data were collected through self-administered structured questionnaires, with responses analyzed using descriptive statistics, correlation analysis, and regression analysis to determine the relationship between internal audit effectiveness and financial accountability. The study found a moderately high level of internal audit effectiveness and financial accountability among Uganda's government agencies. The results indicate a strong and significant positive relationship between internal audit effectiveness and financial accountability (r = 0.716, p < 0.01), with internal audit effectiveness serving as the strongest predictor of financial accountability (β = 0.748, p < 0.001). However, gaps were identified in strategic alignment and stakeholder engagement, indicating areas for improvement. It was concluded that strengthening internal audit effectiveness directly enhances financial accountability in Uganda’s government agencies. It is recommended that policy-makers and institutional leaders invest in capacity-building for internal auditors, safeguard the independence of audit functions, and foster stronger alignment of audit activities with strategic objectives and stakeholder needs. Such reforms would not only improve compliance and reduce inefficiencies but also enhance transparency, fiscal discipline, and public trust in the management of government resources.