CHINHOYI UNIVERSITY OF TECHNOLOGY

SCHOOL OF ENTREPRENUERSHIP AND BUSINESS SCIENCES

DEPARTMENT OF ACCOUNTING SCIENCES AND FINANCE

RESEARCH PROJECT BY:

GAUDENCIA MASIIWA (C19136937O)

ROLE OF INTERNAL AUDITING IN CORPORATE GOVERNANCE. A CASE OF MGI

CHARTERED ACCOUNTANCY.

SUPERVISOR: DR. NZERO

November 2022

1
 DEDICATION
This research project is dedicated to my loving and caring mother Hildah Masamba who has been a pillar
of strength during good and bad times, and not forgetting to my friends and family who offered spiritual
and moral support.

2
 Abstract

This paper examines the impact of the internal audit function on good corporate governance in
Zimbabwe's private sector, with a particular focus on SMEs. The focus was on internal audit's
impact on compliance with risk management, internal controls, reporting, and corporate
governance. Using a quantitative research design based on a post-positivist research philosophy,
a questionnaire survey was conducted among 140 private sector respondents. Data were
collected and collated using the Likert scale. The study found that internal audit helps improve
risk management processes, improve internal control systems, and improve corporate reporting.
Internal audit as a pillar of the corporate governance process also shows a positive correlation
with corporate governance

Compliance in the Private Sector in Zimbabwe. From this study, organizations should consider
their internal audit function through continuous human development and appropriate staffing of
entities to ensure improvements in risk management functions, internal controls, and corporate
reporting need to be improved.

Keywords: Corporate Governance, Internal Audit function, Financial Performance

3
 ACKNOWLEGEMENTS

The success of this research project was due to the unwavering support of certain individuals. I
would not have been able to complete this research without the incredible help I received from
family, friends and colleagues.I would like to thank the Lord for giving me health, wisdom and
strength throughout this research. I think.

Among those who have contributed significantly to the preparation of this study, I would like to
thank my supervisor, Dr. Nzero, for his special time and extra patience, support and
encouragement. He always provided valuable insights, suggestions and advice. "God bless you!"

To the Chief Executive of MGI Chartered Accountants, Mr. Fanuel Pange, a big shout out to you
for your extended gratitude, their unwavering support and constructive criticism during my
studies. Without their moral and intellectual support, I would not have made it this far.

Finally, I would like to give special thanks to my loving and caring mother, Hildah Masamba, for
her comfort, encouragement, prayer, patience and moral support during my research.

4
 Table of Contents
CHAPTER ONE..............................................................................................................................................7
INTRODUCTION.......................................................................................................................................7
1.0 Introduction...................................................................................................................................7
1.1 Background of the study................................................................................................................7
1.2 Statement of the problem.............................................................................................................9
1.3 RESEARCH OBJECTIVES................................................................................................................10
1.4 RESEARCH QUESTIONS................................................................................................................10
1.5 SIGNIFICANCE OF THE STUDY......................................................................................................10
1.6 SCOPE OF THE STUDY..................................................................................................................10
1.7 Limitations of the study...............................................................................................................11
1.8 Definition of key terms................................................................................................................11
1.9 Organizational Structure..............................................................................................................11
1.10 Chapter Summary......................................................................................................................12
CHAPTER TWO...........................................................................................................................................13
LITERATURE REVIEW..............................................................................................................................13
2.0 Introduction.................................................................................................................................13
2.2.0 Corporate Governance Models.................................................................................................19
2.4 Internal Audit independence in corporate governance...............................................................26
2.8 Management support and corporate governance compliance....................................................29
2.9 Chapter Summary........................................................................................................................29
CHAPTER THREE........................................................................................................................................30
RESEARCH METHODOLODY...................................................................................................................30
3.0 Introduction.................................................................................................................................30
3.1 Research Philosophy....................................................................................................................31
3.2 Research Design...........................................................................................................................32
3.3 Research population....................................................................................................................33
3.5 Research Instruments..................................................................................................................35
3.6 Data Collection procedures.........................................................................................................35
3.7 Data presentation and analysis....................................................................................................36
3.8 Validity and Reliability.................................................................................................................37
3.9 Ethical Considerations.................................................................................................................37
3.10 Chapter Summary......................................................................................................................37

5
CHAPTER FOUR..........................................................................................................................................38
RESEARCH AND DISCUSSION.................................................................................................................38
4.0 Introduction.................................................................................................................................38
4.1 Questionnaire response rate.......................................................................................................38
4.2 Professional Qualifications..........................................................................................................39
4.3 Working experience.....................................................................................................................40
4.4 Descriptive statistics for close ended questions..........................................................................40
Table 4.5: Availability of Corporate Governance ethical code...........................................................41
4.6 Internal Audit assessing values and ethics...................................................................................41
4.7 The role of internal audit function in an Organization.................................................................42
4.8 Internal audit and suggesting management strategies................................................................44
4.9 Internal Audit and internal controls.............................................................................................45
4.10 Internal Audit and Provision of Financial Control......................................................................46
4.11 Managerial Controls and Internal Audit.....................................................................................47
4.12 Internal audit and operational policies control..........................................................................48
4.13 Internal Audit and Financial Reporting......................................................................................49
4.14 Independence............................................................................................................................50
4.15 Accountability in Financial Reporting.........................................................................................51
4.16 Fairness Reporting in Internal Auditing......................................................................................52
4.17 Overall assessment of Reporting...............................................................................................53
4.6 Chapter Summary........................................................................................................................53
CHAPTER FIVE............................................................................................................................................54
5.0 Introduction.................................................................................................................................54
5.1 Chapter Summaries.....................................................................................................................55
5.2 Findings........................................................................................................................................56
5.3 Recommendations.......................................................................................................................56
5.5 Chapter Summary........................................................................................................................56
REFERENCES..............................................................................................................................................57
References.................................................................................................................................................57

6
 CHAPTER ONE
INTRODUCTION

1.0 Introduction
Effective corporate governance and internal auditing are vital to one another in a company. A
vibrant and agile internal audit function can be an indispensable resource supporting sound
corporate governance. Internal audit equips the board with a holistic review of governance
structures and how well they are working with the entity. Failures and crisis’ caused by
companies failing to incorporate good corporate governance made it necessary to promote
auditing in order to make companies stronger against crises as well as to increase investor’s trust
(Silva, 2003). This research seeks to ascertain the relevance of auditing in corporate governance
(ACCA, 2019) .

1.1 Background of the study

Corporate governance evolved as a result of the damaging effects of systemic crisis, corporate
failures and scandals which damaged economies, investors and stakeholders. Malfunctions,
failures in electronic changes, failure to abide to rules and regulations of an entity led to poor
performance in many entities. Corporate Governance is an oversight of a company’s policies,
procedures and practices usually handled by board of directors. It encompasses the relationship
between board of directors, shareholders and other stakeholders as well as the effects on
corporate strategy and performance. Corporate governance looks at how decision makers act,
how they should be monitored and how they can be held accountable for their actions. Because
of an increase in loss production and unethical behaviors, regulatory authorities issued a set of
principles with which companies are expected to comply. These principles include leadership,
effectiveness, accountability, remuneration, relations with shareholders as well as systems and
controls of a company (ACCA, 2019)

7
Internal Auditing is a separate unbiased assurance and consulting activity made to improve
operations and add value. It aids a company in achieving its goals by employing a methodical
and disciplined approach to assess and enhance the efficiency of risk management, control and
governance processes (Ideagen, 2021). The published audited financial statements and related
information are a key importance as this is the information needed by shareholders and other
stakeholders along with auditor’s opinion. In a study of corruption and forensic auditing in
Nigeria, noted that many businesses and organizations have folded as a result of corruption.
Furthermore (Chakrabarti, 2014) alluded that the failure by management to act decisively on
the corrupt activities has also accelerated the demise of a number of firms in India. In
Zimbabwe, companies in private sector and public sector have been caught in scandalous
activities which contributed many companies not confirming with the going concern principle.
ENRON was considered a giant corporation. The company had huge debts in its name. They tried
to disguise this with the help of Special Economic Units and Special Purpose Vehicles. But after
doing well, it failed miserably and became a bankrupt company. The collapse and bankruptcy of
Enron rocked Wall Street, driving some employees to the brink of a financial crisis. Enron peaked
at $90.75 on December 2, 2001. And when the accounting scandal erupted, the stock fell to his
record low of $0.26 per share. Causes of ENRON scandal included creation of special purpose
vehicles to hide financial losses and piles of financial debt and elimination of Enron Corporate
Governance policies. . In the ZBC saga close to $900,000 was lost as an inflated Mobile
Broadcasting Van costing only $100,000 was purportedly bought at a million dollars (Njanike,
2012). The CEO was alleged to have been getting a salary of close to $40,000 monthly while
the other employees were going for month without salaries.

These scandalous activities made other auditors to question the important and effectiveness of
internal audit functions. These activities led to a lack of confidence between internal and external
stakeholders who may need the audited information, liquidation of firms, financial loses, loss of
status as well as low rating of the audit profession (Kamau, 2014). This led the researcher to ask
questions to the society in trying to see whether those challenges mentioned above can alleviate to
corporate governance? Can these challenges be reduced using other methods?

8
 MGI Chartered Accountants
Mazhandu and Co. Chartered Accountants was established in 1982 by Mr. Shadreck S.
Mazhandu. MGI (MCA) Global provides industrial focused assurance, tax and advisory
services to public and private clients. The MGI has joined F. Pange, the three partners of the
firm, directors Spencer Chihota and George Chawawa, and Lovemore Madare, a structured
finance and audit partner. The company has extensive experience servicing private sector
clients and has also worked with government agencies, schools and non-governmental
organizations hence helps the researcher with gathering more information regarding audit.

1.2 Statement of the problem

Corruption and misdeeds such as falsification of financial statements, bribery and deliberate
non-disclosure of certain transactions continue to be reported by businesses around the world.
There are still reports of corruption and other economic abuses, including falsification of
financial documents, bribery and omission of some activities. Failing to adhere to business
ethics results in loss of competitive advantage, failure to produce quality goods/services and loss
of brand loyalty from customers. Small to medium companies like Magaba Pvt Ltd pharmacy
shows that poor corporate governance and lack of review from auditors led to a 15% decrease in
profits between 2016 and 2018. This reflected that managers and investors remain dissatisfied
with corporate regulation (Watson, 2000). Poor corporate governance can lead to issues such
as corruption, negligence, fraud and lack of accountability. However, it's not just scandals that
point to governance failures. Stunted business growth, repetitive complaints, and high levels of
waste also highlight lack of control and strategic alignment. Poor corporate governance can
lead to issues such as corruption, negligence, fraud and lack of accountability. But scandals
aren't the only signs of government failure. Slowing business growth, repeated complaints and
excessive waste indicate a lack of control and strategic direction. The hypothesis put forward
states that there is a positive correlation between internal audit function and anti-corruption
capability. Corporate governance in auditing is a useful approach to ensuring that a company
follows all applicable laws, appropriate internal controls, policies and procedures that serve the
interests of its stakeholders. Therefore, further research on user reliability of financial
information is needed. This research aims to determine the nexus between corporate governance
and auditing as well as how the functions of each can help in addressing the ill practices within the
most sectors within the economy.

9
1.3 RESEARCH OBJECTIVES
1.1.1 To describe and explain audit principles.
1.1.2 To establish the effects of internal audit function on corporate governance.
1.1.3 To evaluate the relevance of corporate governance in auditing.

1.4 RESEARCH QUESTIONS

1.1.4 What are the principles of auditing?
1.1.5 How does internal audit function affect corporate governance compliance?
1.1.6 To what extend is corporate governance followed in entities?

1.5 SIGNIFICANCE OF THE STUDY

Many scholars focusing on corporate governance adherence have never investigated the role and
compromise of the audit function. This study will offer fresh insights into organizational
scandals and misdeeds that have an impact on corporate governance and audit procedures.
1.5.1 To Policy makers, the research will add value to the implementation and
adaptation of having tailor made policies.

1.5.2 To the organization, that is MGI Chartered Accountants, will be able to respond
to the justification with the support of a thorough study of the research questions
and aims.

1.5.3 To Chinhoyi University of Technology, it will add a contribution to the

available empirical evidence in the literature review and other sources for future
use.

1.5.4 To the researcher, the study will be carried out in partial fulfilment of the
requirements of the Bachelor of Science Honors Degree in Accountancy

10
1.6 SCOPE OF THE STUDY
The study will be delimited using the scope of the study that is the internal audit function and
corporate governance for which information for panel data will be easily obtained from the
purpose of the regression analysis. The researcher, will achieve the desired objectives through
distribution of questionnaires to MGI middle managers in Harare where it is easier for the
researcher to obtain information. The study is also based on other auditing firms that gave a rise
to show companies with malpractices performances.

1.7 Limitations of the study

The study’s only potential drawback will be information confidentiality. Because of Covid
outbreak, the collection of data will be limited due to the protection measures. It was
challenging to get responses since respondents were obliged by the Official Secretary Act and
Declaration or Confidentiality provisions. A promise was made that the results would only be
used for school purposes only. Because of the pandemic virus (Covid 19) much information was
obtained through online interviews which led to purpose sampling.

1.8 Definition of key terms

1.8.1 Internal auditing - is an independent, objective assurance and consulting activity
designed to add value and improve an organization's operations. It helps an organization
accomplish its objectives by bringing a systematic, disciplined approach to evaluate and

improve the effectiveness of risk management, control, and governance processes.

1.8.2 Corporate governance - is the combination of rules, processes and laws by which
businesses are operated, regulated and controlled.

1.9 Organizational Structure

This research will be focused on five topics and five chapters namely;

11
 Chapter 1: Introduction of the research.
Chapter 2: Literature Review.
Chapter 3: Research Methodology
Chapter 4: Results and discussion.
Chapter 5: Summary, Conclusions and Recommendations.

1.10 Chapter Summary

The background to the research has been given from which the research problem was identified.
Furthermore, the research questions, the objectives, assumptions and limitations were also
derived. The delimitation aspects of the study, the significance were also provided as well as the
topics to be covered in this research. The next chapter will review relevant literature to the
study.

12
 CHAPTER TWO
LITERATURE REVIEW

2.0 Introduction
According to (Meye, 2011), literature review is a piece of academic writing that demonstrate
critical analysis, knowledge, and comprehension of the academic writing on a particular issue
within the context of the author’s argument. This part presents a discussion of the knowledge
gathered by the researcher from previous related studies to bring meaning and understanding to
the research subject on the auditing part and corporate governance part which has relative to the
topic the researcher has chosen. For the purposes of this study, the researcher will analyze the
literature related to this area of study sourced from e-books, journals, newspapers, magazines
amongst other various sources. This research is going to show the gap between auditing and
corporate governance and how to give solutions and to draw conclusions based on what other
researchers found. The literature review is sub-divided into two, which is, the empirical review
and the theoretical review.

2.1.1 Conceptual Framework

Audit Independence

Audit Composition
Audit Environment Compliance Corporate
Management Support
Governance
Audit Experience and
skills
13
Audit Quality
In the influential work of Adolf Browne and Gardiner Means, The Modern Corporation and
Private Property” emphasized the importance of giving voting rights to all shareholders
transparency and full accountability of the actions of those who control the company way of
thinking. Corporate governance therefore owes its roots to Brown and Means. During this time,
the mandate of the Executive Committee has expanded significantly. Bob Tricker introduced the
term "corporate governance" in (1984) when he wrote a book of the same name. He is widely
known as the father of corporate governance. In the 1980s and 1990s, many corporate scandals
and failures came to light in America and England. India's biggest corporate fraud ever, the
Satyam scandal also had its origins. Therefore, there is an urgent need to raise the standards of
corporate governance and introduce a comprehensive regulatory framework for good corporate
governance. (Njanike, 2012)

A broader view of the term was developed by the Organization for Economic Co-operation and
Development says that “Corporate governance encompasses set of relationships between a
company's management, board of directors, shareholders, and other stakeholders. , also provides
a structure that establishes the means to monitor performance. Good corporate governance
provides appropriate incentives for the board and management to pursue goals that are in the
interest of the company and its shareholders and effectively (ACCA, 2019)

Creditworthiness theory reflects the ability of financial statements to increase shareholder

confidence in management leadership. By definition, the theory of reliability is to create in the
user's mind the ability to establish reliability in the user's mind. Audited financial statements
increase user confidence in money management (Adeyemi. S.B, 2012).

Auditing is the first step in system and process reliability analysis. Reliability is an important
aspect of financial statements, so audit functions need to strengthen this particular aspect to
reassure users. According to (Maune, 2015), users of financial statements need to establish
credibility in their eyes in order to make decisions based on audited financial statements. This

14
credibility is reflected in Internal Audit's ability to assist an external organization, the External
Audit Function. According to (ACCA, 2019) the internal audit function supports external audits
and is the first point where system versatility is identified and more deterrent processes and
systems are proposed. The more trustworthy they are, the better the user's position in managing
money in that jurisdiction will be assessed (Adeyemi. S.B, 2012).

2.1.2 Theoretical Review

Different theoretical frameworks were put in place in order to give a detailed and clear
understanding of corporate governance and auditing. These were differentiated using
distinguished terms as well as different perspective to analyze and view the two variables (A,
2004). Six main theories that are associated with the development of governing the corporate are
agency theory, transaction cost theory, stewardship, stakeholder theory, transaction cost
economics, class hegemony and managerial hegemony.

2.1.3 Agency Theory

Agency relationship is any contractual evidence under which shareholders engages board of
directors to perform different activities on their behalf. Owners are regarded as principal whilst
directors are named agents in corporate entities (Aguilera, 2003). The responsibility of the
agents is to make sure that management of the entity behaves ethically and executives carry out
their duties responsively. However, directors/agents may misuse power to their own advantage.
They may not take enough appropriate risks in pursuance of the principal interest because there
may be no benefit to them. Among other things, there is also the issue of information
asymmetry where clients and agents have access to different levels of information. This means
that the principal will be at a disadvantage because agents will have more initiatives (Jensen,
2000). It is important to also note that relationship with agencies may also grow various other
relationships such as those between the business and the payables, parent and a subsidiary
(Mallin, 2004).

Silvia (2003) Argues that there is conflict between the owner, manager and the director. The
goal of the owner (principal) is clearly different from the goal of the directors and managers. For
example, agents can implement policies that conflict with the maximization of stock prices.
These conflicts of interests can be solved through contractual solutions which state that high

15
transaction costs contracts do not cover all derivatives from maximization hence procedures are
implemented to address gaps in contractual specifications of rights and obligations of the firms
value.

As a result of many entities not following through with the going concern principle,
scandalous activities and abuses which led to the loss of interest to investors causing them to
wipe away corporate funds shareholders are encouraged to act more as owners of corporations
so as to increase the effectiveness of their existence in an organization. With the help of
accounting standards and corporate governance codes, investors have been better informed
about activities of corporation. If shareholders act as owners, they will exercise more influence
on companies. Board will be more accountable for their actions and ownership will be returned
to the shareholders (Mallin, 2004).

Agency theory, therefore, states that human behavior is opportunistic and self-serving. So it
prescribes strong director and shareholder control. It advocates that the main function of the
board of directors is controlling managerial behavior and ensuring that managers act in the best
interests of the shareholders (Chakrabarti, 2014).

2.1.4Transaction Cost Economics

Transaction cost economics examines firm behavior through a contract- or exchange-based
approach. It focuses on transactions and transaction costs through one institution mode, but not
another (Clarke, 1998)

According to this theory, there are mainly two types dimension of the transaction. These are
asset specificity and uncertainty. Uncertainty can be defined as the inability of decision makers
to specify the complete decision tree. As transaction uncertainty increases, so does the amount
of information organizations must process, resulting in higher costs (Jiang, 2006). Asset
specificity can be defined as “the extent to which an asset used to support a transaction can be
repurposed without sacrificing its productive value”. (Williamsom, 1984) Identifies three types
of asset specification, these are site specificity, material specificity, and human specificity. Site
specificity is the close proximity of a series of essentially immobile production steps. Physical

16
asset idiosyncrasies refer to transaction-specific capital investments that tailor the process for a
particular exchange partner. Human capital idiosyncrasy refers to the trading-specific know-how
that traders have accumulated through long-term relationships (Jiang, 2006).

A guideline for drafting a principal-agent contract was provided including the cost of thinking
about and preparing for all the various contingencies that may arise in the course of the contract,
and the cost of negotiation. He said it costs a lot. The cost of drawing up a suitable contract.
These costs usually mean that the contract is in some way incomplete, and the contract is
usually reconsidered if omissions or necessary changes are revealed. In a world of imperfect
contracts (where agency issues also exist), governance structures matter. Governance structures
can be viewed as mechanisms for making decisions not specified in the original contract (Hart,
1995)

Transaction cost economics and agency theory deals with managerial discretion, and in both
theories managers are susceptible to opportunism (seeking self-interest) and moral hazard, and
managers operate under bounded rationality. It assumes that agency theory and TCE's view of
the board as a means of control. In this context, bounded rationality means that managers tend to
satisfy rather than maximize profits. (Stiles, 2001)

2.1.5 Stakeholder Theory

The relationships between firms and their stakeholders determine the firm's ability to generate
sustainable wealth over the long term and its long-term value. Stakeholder theory defines a firm
as “a socio-economic organization created to generate wealth for multiple stakeholders”.
Although corporate stakeholders tend to be very diverse, there are common characteristics in the
relationships between firms and their stakeholders (Post, 2003)

Rather than focusing on shareholders, stakeholder theory considers a broader set of

stakeholders. As a result of our shareholder focus, preserving shareholder value is paramount.
The primary focus on shareholder value becomes non-trivial once governments and
communities are taken into account. Many companies seek to maximize shareholder value and
consider the interests of a wide range of stakeholders. One reason shareholders are substantially

17
more privileged than other stakeholders is that they are the beneficiaries of the remaining free
cash flow (that is, the profits that remain with other stakeholders). This means that shareholders
have a vested interest in ensuring that resources are used optimally, which should benefit society
as a whole (Mallin, 2004).

Stakeholder theory is a theory of management and ethics, differing in that it explicitly treats
morality and values as central features of organizational management. He also points out that
stakeholder management requires more attention than just maximizing shareholder wealth.
Attention to the interests and well-being of people who can help or hinder the achievement of
organizational goals is a central recommendation of theory. As stakeholder theory spreads,
social welfare diminishes. The reason is that the agency costs will increase. He also says that an
organization's long-term market value cannot be maximized by ignoring key stakeholders
(Aguilera, 2003)

2.1.5 Stewardship
A major argument in stewardship theory is that there are no conflicts of interest between agents
and principals. Stewardship theory represents an alternative view of agency theory. It assumes
that managers are good managers of their companies and they work hard to generate high
returns and profits for their shareholders. They can work closely with leaders. Directors are
viewed as custodians of the company's assets and tend to act in the best interest of the
shareholders (Tricker, 1994).

Stewardship theory is based on a relationship perspective and makes the opposite assumptions
to agency theory. This assumes that managers do a good job and want to act as effective
stewards of organizational resources. As a result, senior management and owners of
organizations are more often seen as partners. Therefore, the primary function of the board is
not to ensure compliance or suitability of management, but to work with management to
improve the performance of the organization. The board's role is primarily strategic, adding
value to the best decisions. In this context, it is not surprising that management ideas and
practices should apply to governance. From this perspective, board members should be selected
based on their expertise and contacts so that they can add value to the organization's decisions.

18
Board members and managers should receive proper induction and training on how to work
effectively as a team (Williamsom, 1984).

2.1.6 Managerial Hegemony

The theory of managerial hegemony refers to the statutory governing body of an organization,
the board of directors. Managers are ultimately responsible for the direction and control of the
organization (Scott, 1997). A board of directors is a legal fiction controlled by management. As
such, the board of directors becomes an ineffective body for overseeing and controlling
management. This theory points to the board's paradoxical position that powers delegated by
shareholders are actually exercised by management. Agency theory and managerial hegemony
theory differ in their perspectives on the interaction between the board of directors and the CEO.
Management hegemony argues that according to this theory, these trends help increase board
confidence and reliance on the CEO for board composition and ongoing operation. As a result,
the board's ability to act in the best interests of its shareholders is limited. The board of directors
is therefore seen as another management tool, a sign of managerial decision-making and
strategic planning (Kosnik, 1987). In management hegemony, the board is viewed as an
organizational entity with little intrinsic power (Adam, 2004).

2.1.7 Class Hegemony

The theory of class hegemony is based on the sharing of power by an elite class, the heads of
large corporations. Boards are the mechanism by which this elite seeks to perpetuate and
strengthen itself through interconnected boards (Clarke, 1998).

They consider directors to be the commanding elite of the company, and they recruit and
promote new directors considering how well the new appointment fits that elite. It sees the
board of directors as a means of maintaining the power of the capitalist ruling elite (Ricart,
2004). Class hegemony theory sees the governing body as a way of maintaining power for the
elite, and thus its composition is determined by the will to have members of only one class. This

19
exclusion of other stakeholders protects the interests of only one group (Alberti, 2001).

2.2.0 Corporate Governance Models

Three main leadership models in corporate governance are the Anglo-Saxon, the Continental
and the Japanese models which are going to be broken down below by the researcher.

2.2.1 The Anglo-Saxon model – based on entrepreneurship and private property

A characteristic of the Anglo-Saxon model is that the company is controlled by independent
persons and individual shareholders (Jeffers, 2005). Corporate governance has been promoted
through the activities of various organizations. Movements to help shareholders, such as the
National Investor Association (founded in 1951), which advises on stock market investments,
and the National Individual Investor Council, which protects shareholder interests from
regulators. The main thing consider transparency and access to information, strengthen
relationships with regulators and shareholders, and promote business ethics.

The governance model takes place within the organization at his three levels: Shareholders-
directors-managers as powers of management come from managers. This law limits the rights of
shareholders to intervene in the company's day-to-day activities. For example, shareholders can
only determine ownership. Elected Board Member. However, it can influence changes in
management attitudes and leadership. They may decide to liquidate their holdings or refuse to
increase the company's capital contribution, thereby halting funding. Financial support from
shareholders is the most important weapon they have against management.

Anglo-Saxon countries are characterized by the emergence of financial markets and strict
banking regulations, especially regarding shareholdings in non-bank companies. As a result of
continuous economic growth, the United Kingdom has developed a market economy and has
developed a highly diversified capital and shareholder structure. The population can directly
intervene in economic development by holding shares and investing in capital markets from
their own resources (Ehmer, 2009).

20
2.2.2 The Continental-European Model (Major shareholders’ interests)
The Continental European model is characterized by a high concentration of capital.
Shareholders have common interests with the organization and participate in its management
and control. Managers are accountable to a wide range of stakeholder groups, such as unions,
business partners, etc., in addition to shareholders (Jeffers, 2005) The 1980s brought to
consciousness a new concept that would later be discussed in Italian literature: neo-corporatism.
Market and corporate regulation is now prevalent in hostile public spheres in a less receptive
environment. Socio-economic realities have produced several different sales and management
structures, each unique to the reference market and with specific characteristics. Ownership and
control of listed companies are highly concentrated, allowing shareholders to intervene in the
management process (Dignam, 2009). The German governance system sees a company as a
combination of an interest group whose purpose is to coordinate the goals of the national
interest. Executive Board and Supervisory council can be found in a company council. The first
effectively manages the company, but under the direction of the second, most decisions are,
necessarily, confirmed by it. Such a governance structure is a mechanism for management
monitoring and control (Martynova, 2011)

2.2.3 The Japanese Model – Specific to an oriented corporate governance system

As a novelty, the Japanese model introduces the concept of holdings, which designate industry
associations. It consists of companies with common interests and similar strategies. This is
reflected in relationships with shareholders and keiretsu (networks of loyal suppliers and
customers). A distinctive governance pattern is governed by two types of legal relationships:
One is the participation between shareholders and unions, customers, suppliers, creditors and
governments, and the other is the relationship between managers and these stakeholders,
including managers. The need arises from the fact that the company's activities must not be
hampered by human relationships (Ehmer, 2009). During all these people's relationships that
create risk. Management decisions are aimed at improving the company's income and power,
particularly through certain corporate governance practices, but they can also interfere with
shareholder control over management. Therefore, the Japanese model (similar to the German
model) is based on internal controls. Rather than focusing on strong capital market influence,
the model focus on the presence of strategic shareholders (Ehmer, 2009). As in Germany, large
shareholders are actively involved in the management process to promote economic efficiency
21
and punish its lack. Aiming to harmonize interests of social partners and company employees. In
Japan, unlike in the United States, the concentration of shareholders makes it easier to
implement control-oriented corporate governance. Many voices say Japan has the longest road
ahead to improve its standards of governance transparency (Dignam, 2009)
To create this credibility, we need to ensure that the audit function is independent of the
influence of the board, owners and other outside members. These are powerful institutions that
have a significant impact on the IA's job performance. In addition, we need to understand the
impact of board composition and board size on our ability to detect and combat public sector
corruption. The board should be composed on reasonable grounds to ensure the effectiveness of
the internal audit function through the audit committee.

In addition to proper composition, size and independence, it is also necessary to understand the
impact of experience and skills on our ability to fight corruption in any environment.

2.3.0 Principles of Corporate Governance

2.3.1 Disclosure and transparency
Accurate and timely disclosure of information promotes investor confidence and market
efficiency. Information disclosed must be clear, consistent and comparable. In this case,
investors can make informed decisions about asset allocation, resulting in better performing
companies at a lower cost of capital. Disclosures are not effective if investors do not rely on the
accuracy of the information disclosed. The easiest way to ensure disclosure credibility is to
legislate and impose penalties on disclosure. Different information about your organization may
be important to different users. The form of disclosure allows users to reconstruct information as
they see fit. A key concept is that what is hidden should not be associated with disclosure
(Gilson, 2000). Investors want transparency and disclosure as they seek to protect their capital.
Investors rely on the information they receive from companies when making investment
decisions. The disclosure of complete financial statements is a fiduciary responsibility of
management, and the accuracy of this information is important (Darman, 2003)

22
Disclosure ensures a better public understanding of the company's structure and operations,
company policies and performance. Strong disclosure is important to oversight and to the ability
of shareholders to vote. Strong disclosure can attract capital and increase confidence in capital
markets. Poor information impedes market functioning, increases capital costs, and leads to
inefficient allocation of resources (McKenzie and Johnson, 2004). Using this principle, investors
can actually study companies, understand their true market value, compare performance, and
make the best investment decisions. Principles of corporate governance, disclosures should
include the company's financial and operating results. Audited financial statements are the most
common source of information about companies. OECD Principles emphasize timely and cost-
effective access to relevant information on related party transactions (Dunlop, 2001)

2.3.2 Fairness
Fairness can be defined as treating shareholders equally, protecting the interests of minority
shareholders, and protecting the rights and interests of foreign shareholders. Minority
shareholders and other stakeholders are treated fairly and their interests are taken into account. In
impartiality, decisions and their enforcement must not give any party an unfair advantage

Other scholars states that corporate governance should ensure fair treatment of all shareholders.
Shareholders should be able to obtain effective remedies for violations of their rights. Directors,
managers and shareholders may engage in activities that serve their interests at the expense of
non-controlling shareholders. A distinguish between ex-ante and ex-post shareholder rights was
provide. Examples of prior rights include first refusal and qualified majority voting on certain
decisions. Post-fact rights, on the other hand, allow for legal remedies if rights are violated.
OECD (2004) supports equal treatment of foreign and domestic shareholders and describes equal
treatment of shareholders under three main headings: All shareholders of the same series in a
class should be treated equally (Chakrabarti, 2014).

All shares within a series of classes must have the same rights. Investors should be able to learn
about the rights attached to all series and classes of stock before purchasing. Voting changes

23
must be approved by the adversely affected class of shares. Minority shareholders must be
protected from abusive behavior by controlling shareholders. Controlling shareholders can
alleviate agency problems by overseeing management. On the other hand, weaknesses in the
legal and regulatory framework can lead to abuse by other shareholders of the company. Insider
trading and fraudulent proprietary trading should be prohibited. Abusive self-dealing involves an
individual having a close relationship with a company and abusing that relationship to the
detriment of investors and the company. Insider trading is prohibited in most OECD countries
due to the manipulation of capital markets. Directors and key executives must disclose to the
Board any material interest in any transaction or matter that directly affects the company
(ACCA, 2019)

2.3.3 Accountability
Accountability means clarifying corporate governance responsibilities and aligning the interests
of management and shareholders (TUSIAD, 2002). The Board of Directors 1S has established
itself as an internal corporate governance her mechanism for holding management accountable to
shareholders. Board oversight can reduce the potential for divergence between the interests of
management and investors. Accountability principles are usually based on internal controls and
balances. In the corporate context, it includes sound auditing practices. Sound auditing practices
should include and encourage board selection and reliance on independent auditors (Millstein,
1998)

Management is accountable to the Board for the achievement of plans and implementation of
approved policies that protect assets and ensure the financial viability of the organization.
Boards, on the other hand, are accountable to shareholders and stakeholders (Kimberly, 1995).
Accountability is inherent in corporate governance and involves seeking to hold an organization's
management accountable for its performance and making judgments about the proper use of
executive powers. Ensures that actions are consistent with organizational objectives (Bavly,
1999). Accountability provides an objective measure of performance for managers and
consultants. Responsible people recognize that they must defend their decisions and that they are
responsible and responsible for their wrong decisions (Kimberly, 1995).

24
Corporate governance deals with processes related to decision-making, production and
management within an organization. Accountability takes into account company operations and
also recognizes the rights of shareholders to information (Hsieh, 1999). We focus on efficiency
and productivity and prove that the desired results are actually achieved. It also means a
relationship in which the company's leaders are accountable to the board, and the board is
accountable to the shareholders. It assigns responsibilities to institutions, company directors, or
individuals and requires full reporting of those responsibilities (Bavly, 1999)

2.3.4 Corporate Social Responsibility

“Corporate social responsibility involves finding effective alignment between the company and
the society in which it operates” OECD (1999). Fit helps promote mutual trust and predictability,
improving economic, social and environmental well-being. A core element of corporate social
responsibility concerns business operations and the company's relationship with society at large
(Dignam, 2009) .

It says companies need to consider the interests of groups other than shareholders in the
decision-making process and cooperate with them. They must be aware of the social impact of
their activities. The company's main goal is to fulfill its social responsibility and achieve
sustainable performance development. Business managers must consider the interests and desires
of stakeholders such as employees, customers, suppliers and governments (Gregory, 2002).
Corporate social responsibility enables companies to set their own desired policies, make
decisions and implement them, taking into account society's goals and values (Printer, 1984). It
means comprehensive development of entrepreneurial activities from the perspective of
sustainable development (Kang, 2005). There are both positive and negative views on corporate
social responsibility. Neoclassical economics takes a negative view. In their view, businesses
contribute to society by maximizing profits, improving efficiency, and reducing costs (Lee,
2004).

25
Stakeholder theory takes a positive view of corporate social responsibility. The development of
capitalism in the 20th century increased the influence of corporations. A company should fulfill
its role as a member of society. When they evade social demands, this evasion proves to be at the
expense of society and increases expenditure on business costs. Societal development will also
benefit enterprise development (Carrol, 1999). Business trust plays an important role in
consumer decision making. Companies lose consumer trust, impact stock prices and profits, and
threaten the long-term viability of organizations. When companies fulfill their social
responsibilities, they can increase their market value and brand value (Kang, 2005).

2.3.5 Role of Internal Audit in Corporate Governance

Effective governance and internal audit are mutually important, as a lively and agile audit
function can be a vital resource in supporting good governance Mitcheleberger, (2016). The
audit focus can be based on organizational needs and concerns, as it is designed to ensure that
procedures are in place to manage the governance structure. As the audit function strengthens the
corporate governance structure, the need to hire, remunerate, and remove the chief internal audit
officer should be the prerogative of the board, not the board. Therefore, you can view the auditor
more objectively. Audits are effective in driving change, improvement and innovation within an
organization. By highlighting vulnerabilities and evolving risks, internal audit can identify and
anticipate emerging trends and challenges, enabling organizations to stay ahead and act when
crises arise

2.4 Internal Audit independence in corporate governance

Stewart and Subramanian (2010) in their study of the role of the internal auditors in the advent of
dual reporting structure in the United Kingdom noted that the idea to outsource internal audit
function comes in as a manner of ensuring audit independence in the organization. The
conclusions drawn by the researchers here were that, independence of the internal audit functions
improves corporate governance structures. Furthermore the ability to audit the corporate
governance structures are enhanced when the internal auditor is independent. Groff et al (2016)
in the study of the contemporary role of internal audit in corporate governance, proffered that the
need to hire, remunerate and dismiss the Chief Internal Audit Executive should be the
prerogative of the supervisory board rather that the executive board in that the former is not

26
involved in the day to day activities of the business and as such are more likely to view the audit
executive with objectivity of mind. Tabara and Ungureamu (2012) in their study of the role of
internal auditors in corporate governance systems in Romania, argued that the independence of
the internal auditors in their execution of their normal duties improves the corporate governance
delivery systems in which they audit. Tabara and Ungreamu (2012) conclude that complete
independence of the internal audit function within an organization is necessary to complete the
corporate governance structure.

Tepalagul and Lin (2014), in their study on auditor independence and quality, found that the role
of internal auditors in determining the quality of financial reporting is closely related to the
independence they enjoy in the audit environment. The researcher also discovered that the
structure of the report impacted the independence that internal auditors enjoyed. Supports
Tepalagul and Lin (2014). Quansah (2015), in her study of the internal audit function and
corporate her governance system of Post Company Limited in the Ashanti region of Ghana,
found that the reporting structure of the internal audit function was designed to ensure
governance by ensuring that internal audit functioned found to provide much-needed
independence in She reports directly to the Chair of the Audit Committee. Researchers also
noted that if an audit committee does not exist within the organization, it is essential to
encourage reporting directly to the chair of the main committee. According to Quansah (2015),
this greatly increases the freedom and independence of internal audit committees. Horea and
Florea (2013), in their study of the role of boards and effective control enhancements, found that
no matter what reporting structure an organization has in place, increasing the independence of
the internal audit He argued that the effectiveness of the function should be increased. The
authors found that the more independent the audit function within a company, the better or more
logical it would be to improve governance (ACCA, 2019).

Experience and skills of internal audit members and adherence to corporate governance. Grof et
al. (2016) confirmed that audit team members and their respective skills have an impact on
ensuring compliance with corporate governance in a company. In addition, Groff et al. (2016) in
their study of the current role of the internal audit function in corporate governance, stated that

27
the more experienced and qualified a team you choose, the better your understanding of the
corporate governance principles that govern your company's operations. Therefore, it is
imperative that the internal audit department is experienced and qualified in both financial
accounting, information technology, financial management and forensic examination to add
value to corporate governance compliance. Utami (2013) and Trotman (2013) argued that
internal audit's own experience and expertise may indicate its ability to challenge corporate
governance practices in an organization. The more experienced auditors are and the more
independent they are considered, the better the performance of a company's corporate
governance practices. Tahara et al. (2011) concluded in a previous study that internal audit's
expertise and division of responsibilities give firms the ability to advise those charged with
corporate governance and thus determine whether firms adhere to corporate governance.

In a study similar to Groff et al. (2016) Bame-Aldred et al. (2012), in a study of external auditors'
dependence on the internal audit function, provided a comprehensive analysis of the skills gaps
that exist within the internal audit function. These include, but are not limited to, information
technology, forensic accounting, investigative, and analytical psyche, leading to a complete lack
of understanding of the need for corporate governance compliance. Support me. (2012), Saud
and Marchland (2012), in a study on the contribution of internal audit to his governance, focused
on the state corporates of Sweden and Pakistan, lacking appropriate skills such as forensic
accounting and auditing and information technology. The performance of internal audit of
corporate governance in many companies in both developing and developed countries is a major
disappointment. This is also an important issue within the testing function, pointing to the need
to improve qualifications and their complementarity. Sol et al. (2011) also found that the quality
of implementation of corporate governance principles depends on the internal audit function's
ability to address pitfalls and slippery edges. This demonstrates the need to address the skills gap
in internal audit in order to improve corporate governance principles across the organization. In
addition to the conclusions of Seol et al. (2011) Hundal (2013) found that audit teams do
accounting and auditing. Studies were more effective at performing tasks, especially when those
skills also exhibited information technology biases. I have found to improve. Expanding the
reporting dimension will increase investor confidence in the principles of corporate governance.

28
King M (2010) and Peterson (2015) argued that internal audit's competence should reflect the
skills of the team and that internal audit should be subject to ongoing development activities
consistent with the profession. Agreed. Peterson (2015) further states that the internal audit
function should have adequate functional expertise in information technology, taxation, and
investigations, professional guidance, interpersonal qualities that enable teamwork, and financial
support in complementary support (Chakrabarti, 2014)

2.8 Management support and corporate governance compliance

Drogalas et al (2015) concluded in a study of the factors that influence the effectiveness of
internal audit. In Greece, the support the team receives from management ensures quality
improvement

Audit report opinion and resulting quality. Therefore, consistent with the above conclusions,
Cohen and Sayag (2010) suggest that management support actually improves internal audit
functions. Alzeban and Gwilliam (2014) concluded that there is a positive correlation between
the internal audit function within an organization and executive support.

Another conclusion made by Drogalas et al. (2015) suggested that management support would
improve the effectiveness and efficiency of the internal audit function in Greece and thus could
be applicable to other environments. In a study of corporate governance structures in India,
Sowmya (2012) argued that corporate governance structures would collapse if management
created looseness in the system without encouraging the internal audit function to promote
transparency and accountability. Bhasin (2013) argued that scandals are "the tip of the iceberg,
manifesting 'visible' problems related to governance issues within organizations. This means that
what is reflected publicly can be the result of deep-seated aspects of corporate governance
failures within companies.

29
2.9 Chapter Summary
Abid and Ahmed (2012), in their study of governance failures and warnings in the Dutch
Republic, found that the impact of corporate governance failures on the economy is not only
limited to firms, but sectors/industries and social entities constraining workers.

30
 CHAPTER THREE
RESEARCH METHODOLODY
3.0 Introduction
By definition, research methodology are the specific procedures or techniques used to identify,
select, process and analyze information about a topic. The methodology allows the reader to
critically evaluate a study’s overall validity and reliability.

The purpose of Chapter 3 is to ensure that the research methodology is clearly described,
including the research design and data collection methods used during the research. In addition,
issues of data reliability, research ethics, and data adequacy were considered.

3.1 Research Philosophy

There are at least three research philosophies employed by researchers: positivism, pragmatism,
and interpretivist. These are described below, including how to use them.

3.1.2 Positivism
The positivist approach in research philosophy involves using numbers to prove or disprove
certain hypothetical relationships between two variable imply that the aim was to confirm
specific relationship outcomes (Creswell, 2014).

A positivist approach is used in all experiments and investigations in order to establish

relationships and quantify your data. Francis Bacon is considered the father of the positivist
approach based on the 18th century. According to Sanders et al. (2015), the positivist approach
emphasizes the need to be clearer and more specific. Strictly scientific in nature. The need for
quantification eliminates biases introduced by human influences.

3.1.3 Interpretivist
Creswell (2015) argued that the development of interpretive philosophy was the result of
opposing aspects of the positivist approach with subjective methods and perspectives. The
argument in the Interprevisist approach is that humans are very different from other creatures.

31
As a result, they have the ability to create meaning through their actions and deeds. The
interpretive phenomenon was developed in twentieth-century Europe to test how close human
behavior is to the scientific phenomenon of positivist philosophy (Saunders et al. 2015) most
notable in phenomenology, hermeneutics, phenomenology, and/or symbolic interactionism
(Creswell, 2015). Depends on beliefs, state of mind.

3.1.4 Pragmatism
The emergence of pragmatist philosophy in the 19th and 20th centuries is credited to Charles
Pierce and John Dewey Vasloo, (2014). This development brings together the ideological works
of the positivist and the interpretationist into a single perspective (Creswell, 2014). Philosophy
examines concepts, hypotheses, ideas, and discoveries from a scientific and qualitative
perspective. According to Sanders et al. (2015), pragmatists focus more on the practical solutions
produced by research and the impact of such findings on the foundations of a community or
economy. Results are both interpreted from both subjectivism and objectivism because of the
phenomenon of pragmatism.

3.1.5 Adopted Research Philosophy

With regard to the research that was done by the researcher, a positivity approach was adopted in
regard with the hypothesis given. This is because there are some relationships that need scientific
approach so as to acquire objective results henceforth the need for positivity approach.

3.2 Research Design

Parahoo (1997) defined study design as the procedures and plans for conducting the study. It
describes the processes and methods a researcher must follow to obtain the desired information
from a research subject (McMillan and Schumacher, 2002). Study design also includes the
selection of research subjects, study sites, and equipment design for the particular study to be
conducted (Creswell, 2014)). Study design can therefore be reduced to planning when, where,
and how study data will be collected and analyzed. A strategy employed by a researcher to
collect data that informs the results of a particular research study. The choice of research strategy
32
by Lewis and Thornhill (2009) is based on the research question and the hypotheses formulated
from it. In addition, strategies are also based on current levels of knowledge, population size, and
available resources to implement the strategies. There are three of his designs that the researcher
used in obtaining his research. These are quantitative designs, qualitative designs, and mixed
designs that include both qualitative and qualitative factors.

3.2.1 Qualitative research approach

According to Creswell (2014), qualitative design uses subjective arguments to arrive at
conclusions and therefore has a very high level of bias. In addition, Saunders et al. (2015) found
that beliefs, states of mind, and environment can influence a person's responses. Sanders et al.
(2015) argued that, from a qualitative perspective, the results provided cannot be remeasured to
determine reliability or validity based on beliefs, understanding of purpose, and attitudes of
respondents. . He also pointed out that qualitative models are usually associated with both
pragmatic and interpretationist research philosophies.

3.2.2 Quantitative research approach

Quantitative research design follows the positivist research philosophy and aims to provide the
scientific conclusions of research numerically (Saunders et al, 2014). According to Creswell
(2015), their goal is to quantitatively test theories and hypotheses, thereby showing relationships
between given variables. Quantitative approaches aim to demonstrate the presence or absence of
a perceived relationship and predict its behavior (Van Der Merwe, 1996). Creswell (2014)
argued that no quantitative design approach exists unless scientific methods, techniques and
processes are used to determine relationships between variables in research. The intention is to
obtain unbiased and objective conclusions from respondents in research studies, as opposed to
qualitative designs where subjectivity is the ordering of results.

33
3.2.3 Justification for research design
Two key variables in this research study are the performance of the internal audit function and
the private sector entities so it is important that these variables are numerically supported. This
drives the need for quantitative research designs based on positivist decisions.

3.3 Research population

Vasloo (2014) defined the population as the universal number of items or units from the data
available. Vasloo (2014) further alluded that the research population is the pool from which all
the items of the study or units can be picked from in a research. The population for this study
were drawn from all the selected private owned entities in Zimbabwe, including those with a
regulatory function. The population is made up of the CEOs, Chairpersons, Directors of
Finances and the internal Audit Executives. Which means its four respondents per private
owned entities. The table below shows that research population and the sample of the research
study.

Table 3:1 Population Sample and Size

Clusters Number of private Population Sample

companies

Chairpersons 10 40 30

CEOS 10 40 35

Finance Directors 10 40 35

34
 Internal Audit 10 40 40

executives
Total 10 160 140

Source:
Researchers’ Design

3.3.1 Sampling techniques and sample size

A population sample was defined by Muhlenberg’s (2011) as a subset of the population under
study. Zimbabwe's private sector is large, and the researcher selected only his 10 of them.
Probability sampling technique was used by the researcher to find solutions to the questions
which he had. Random probability was used on companies which provide homogenous
services whereas stratified probability was used for entities that provided different services The
possibility and practicality of having researchers cover all private companies justified the
decision to focus on a select few. Mugenda and Mugenda (2011) argued that the sample size of
at least 50% of the population reflects the population, in which case the sample exceeds
established standards.

3.5 Research Instruments

The researcher is going to use the questionnaires only using the 5 point Likert scale, because
the researcher would want to conclude findings by way of the numerical and scientifically
proven methods the relationships that exists in the given hypothesis derived.

3.5.1 Questionnaire

It is a systematically structured questionnaire in which respondents answer questions logically

to the best of their knowledge and belief (Annum, 2017). The researcher used closed rather
than open-ended questionnaires. The purpose is to seek answers in the direction that researcher
want. (Creswell, 2014). Surveys have the advantage of being easy to follow if they are

35
 designed to remove complexity and ambiguity. In closed questionnaires, respondents are not
given the option of presenting their views on the issue, but are guided to simply agree or
disagree with specific questions posed by the researcher. Results are easy to quantify and
analyze. Conversely, open-ended surveys allow respondents to add their opinions, thought
processes, or voices about the issues discussed. Another author emphasized the need for clarity,
conciseness, and specificity in all quantitative research questionnaires. The researcher used the
5-point Likert scale, which he found easier to understand and more logical in nature (Creswell,
2014).

3.6 Data Collection procedures

The questionnaires were personally administered by the researcher in order to obtain control.
This also made it easier for directing the questionnaires to the appropriate people who have a
clear understanding of the issues under study. Most questions were done online, interviews through
face to face were done but at a low level because of rules and regulations which were implemented by the
government due to Covid 19.

3.6.1 Primary data

Primary data are original data collected for a specific research purpose Creswell, (2014). This
means that the data are unique to the researcher and have not been previously collected by
others. Primary data from Saunders et al. (2015) has the following advantages: The first is the
originality and specificity of the study under consideration. Second, primary data are more
realistic in solving the problem at hand and easier to evaluate. Primary type data are collected in
this study using a 5-point Likert scale questionnaire design. Microsoft Excel was used to
analyze the collected data.

3.6.2 Secondary data

Secondary data, on the other hand, refers to the type of data that has already been collected for
other research or purposes. According to Sanders et al. (2015). This type of information is
available in libraries, data centers, publications and journals. The big advantage is that this data

36
type is already available and the procurement effort is very low. However, in most cases it
cannot be used entirely for new research purposes as it does not form the main purpose of
research. Specific research purposes are limited to guiding information only.

3.7 Data presentation and analysis

The data collected by researchers were presented in the form of graphs, tables and charts. The
data presented were collected from questionnaires submitted to various respondents, as well as
publications and other reports from private companies. The questionnaires were reviewed and
tabulated according to the respondents of each questionnaire. Technology is included in
thematic and comparative analyses. Data are analyzed by the SPSS 16.0 program and
descriptive results are obtained. We use Pearson's correlation matrix to establish the magnitude
of the relationship between the three variables of the conceptual framework and private
company performance. The Pearson correlation matrix is used because of the measure used to
assess respondents' opinions of agreement and disagreement with the predictor variables about
the outcome.

3.8 Validity and Reliability

Tovakol and Denminik (2011) define data reliability as the level at which users of the
information can be trusted. This depends on the data source, data collector, and time period over
which the data was collected. In addition, Saunders et al. (2015). This also depends on the
population size chosen for the research study. Validity, on the other hand, measures whether the
results reflect the intended purpose of the study.

According to Joppe (2000), reliability can only be achieved if the same tools are used in the
same situation and the results are checked for consistency in different situations. Adefioye
(2015) referred to confidence in the consistency, stability and reproducibility of study results.
The outcome of a study is reliably measured when reliable results are obtained under similar
conditions but under different conditions. This study uses acceptable alpha coefficient of greater
than 0.5 to measure the reliability of the variables under study. Validity can be a measure of
what the instrument is meant to measure. To achieve validity, researchers conduct a pilot study
considering all validity tools (Ahmed, 2017)

37
3.9 Ethical Considerations
According to Clough and Nutbrown (2002), ethical considerations require researchers to protect
the opinions, welfare, confidentiality, and rights of respondents. This study complies with and
complies with University rules and regulations. The data collected will be kept confidential for
academic purposes only and the anonymity of the participants will be ensured by excluding
personal data in the survey. This survey uses data collected and used solely for this survey and
may share survey results with interested respondents. Researchers disclose their research results
honestly.

3.10 Chapter Summary

This chapter emphasized research methodology based on study design, sampling, data
collection methods, and data presentation. The population is obtained from private companies.
Reliability, efficacy, and ethical considerations were also provided in this chapter. This chapter
also described the procedures used in data collection. Primary data is collected from surveys
and secondary data is obtained from company reports and published articles. Finally, the
survey methodology will be a formal survey with an emphasis on quantitative techniques for
measuring responses to questionnaires. The next chapter describes the presentation and
analysis of the data collected through the methodology in this chapter.

CHAPTER FOUR
RESEARCH AND DISCUSSION

38
4.0 Introduction
In this chapter, the researcher focus on results and discussion of the objectives stated in chpter
one and two using methodology described in chapter three. The chapter also aims at presenting
data that was presented by other scholars before, finding answers and solutions to research
questions and objectives. The obtained data will be presented using tables, graphs and charts to
mention a few. Mixed methods were used in data presentation and analysis using questionnaires
and interviews guide as research instruments.

4.1 Questionnaire response rate

The researcher self-administered 140 questionnaires in all, and 130 of them were returned,
representing 93% of the total which is adequate enough to analyze and come up with a
conclusion. The other 7% was obtained from 10 questionnaires that were not responded and
returned. The table below shows the response rate to questionnaires questionnaire response rate
of more than 50% calls for further study, according to and Cresswell (2014), therefore the
researcher added up the replies to create the data shown for each topic analyzed below.

Table 4.1: Questionnaire response rate

Frequency % Cumulative %
Returned 130 97 97
Not Returned 10 3 100
Total 140 100
Source: Sampling data (2022)

The percentage of respondents who responded to the questions and returned them out of all the
respondents to whom the questionnaires were distributed is displayed in Table 4.1 above. A
response rate of more than 50% is regarded as reliable, according to Bryman (2014), because
more than half of the targeted census would have represented the study's whole targeted
population. The 97% response rate is supported by Finchman's (2013) assertion that a reliable
response rate should be higher than 60%. The remaining 3% of the data that wasn't gathered as

39
planned consisted of employees who couldn't be reached due to other job obligations. The results
drawn from the data acquired, which were free of any bias, neutral and free from material error.

4.2 Professional Qualifications

Table 4.2: Highest education level achieved by respondents

Qualification Number of respondents Response rate (%)

Professional qualification 20 15
Masters 40 31
Degree 50 38
Diploma 30 23
PHD 0 0
Total 130
Source: Research Output (2022)

Table 4.2.1 shows that 20/130 respondents (15%) have professional credentials, 40/60
respondents (31%), 50/130 respondents (38%), and 30/130 respondents (23%), respectively,
have graduate master's degrees. Each responder had taken post-secondary courses related to their
field of employment. This increases the data's trustworthiness by ensuring that it is gathered from
educated sources who can offer expert opinions. The differences came as a result of rounding off
figures to the nearest whole number.

4.3 Working experience

Table 4.3: Working experience for respondents

Years Number of respondents Response rate (%)

1 year and below 10 8
2 -5 years 50 38
6 years and above 70 54
Total 130 100
Source: Research output (2022)

40
8% of the respondents have less than one year of work experience, 32% have between two and
five years, and 54% have more than six years, as shown in Table 4.5.1 above. The vast majority
of respondents have been working for the company for a long time. Because the vast majority of
respondents are familiar with the operations of the business, the data is therefore more reliable.

4.4 Descriptive statistics for close ended questions

Table 4.4: Keys for descriptive statistics

Scale Score
Strongly agree 5
Agree 4
Neutral 3
Strongly disagree 2
Disagree 1
Source: Sampling data

The keys above table 4.4 represent different scales by which respondents were supposed to
answer in line to the questions asked. The scale ranges from five to one in a descending order
meaning that the highest obtained score is five whilst the lowest obtained score one.

Table 4.5: Availability of Corporate Governance ethical code

Frequency %
Valid Yes 89 68
No 41 32
Total 130 100
Source: Research output

Above 50% of the respondents confirmed that businesses were conforming to the rules and
regulations of the company. This means that the remaining 32% of staff failed to oblige to the
rules of the company hence corporations are adjusting to the environment changes that are
increasing rapidly.

41
4.6 Internal Audit assessing values and ethics
Frequency %
Very effective 40 31
Effective 32 25
Uncertain 21 16
Slightly ineffective 19 15
Ineffective 18 14
Total 130 100

40/130, or 31% of respondents, indicated that the internal audit function is highly effective in
assessing values and ethics within their organization. Thirty-two of 130 (25%) said the function
was effective, but 21 of 130 (16%) said the internal audit function was ineffective when
assessing values and ethics within the organization. I wasn't sure about its effectiveness.
Nineteen in 130 (15%) felt the internal audit function was ineffective in assessing values and
ethics within their organization. Remaining

18 in 130 (14%) indicated their internal audit function was not very effective in assessing values
and ethics within their organization Overall, 72/130 (55%) agreed with the effectiveness of the
internal audit function in assessing values and ethics within the organization. The remaining
58/130 (45%) of those surveyed indicated that internal audit was not effective in assessing values
and ethics within their organization.

Therefore, we can conclude from the above analysis that over 50% of respondents feel that the
internal audit function is effective in assessing values and ethics within their organization.
Internal audit therefore plays a very important role in assessing values and ethics within a
company.

42
4.7 The role of internal audit function in an Organization
According to the answers gathered by the researcher. Internal audit function seemed to play am
important role in different companies as emphasized by the pie chart above. The majority of
workers and employers (75%) admitted that, to a greater extend, audit function are a useful tool.
However, 25% admitted that audit functions were slightly ineffective and the remaining 5% were
sure that internal audit function in an organization is a waste of time.

It can be noted that, there is effectiveness and efficiency in the risk assessment if and only if
there is internal audit function hence the requirement of internal audit. This was shown by the
chart drawn below by the researcher.

Internal Audit and Risk Assessment

Risk Assessment

5%

25%

45%

30%

Very effective Effective Slightly Ineffective Ineffective

Fig 4.7.1: Effectiveness of internal audit functions

The answers to questions on the purpose of internal audit in an organization are shown in the pie
chart up top. The results showed that the audit function was 45% more successful than expected,
indicating that operational risks can be decreased. 25% of respondents indicated they were just

43
marginally effective, whereas 30% agreed with the question. Additionally, 5% of people
disagreed, claiming that these functions were useless. Additionally, the interviewees discussed
how a weak economy supports an increase in operational risks within the business, which could
result in lower sales. Gray (2016) supported this claim by pointing out that consumers prefer to
cut back on spending on items other than necessities when their discretionary incomes are
decreased by factors like high interest rates and inflation, which puts many firms in a difficult
position.

4.8 Internal audit and suggesting management strategies

44
 Management Strategies

13%
22%

15%

24%

27%

Very effective Effective Uncertain

Slightly ineffective Ineffective

The pie chart above shows 22% of respondents said internal audit was very effective in
recommending control strategies within their organization. (24%) said the function was effective,
(27%) were unsure whether the internal audit function would effectively suggest management
strategy. did not. (15%) believe the internal audit function was ineffective in recommending
business strategy. Seventeen of her remaining (13%) indicated that the internal audit function
was not very effective in recommending business strategy.

Overall (46%) agreed with the effectiveness of the internal audit function in recommending
business strategy. The remaining respondents (54%) noted that internal audit was ineffective in
recommending business strategy.

Therefore, from the above analysis, we can conclude that less than 50% of respondents feel that
the internal audit function is ineffective in recommending business strategy. Therefore, internal
audit plays no role in recommending management strategy.

45
4.9 Internal Audit and internal controls

Internal audit and internal controls

Ineffective

Slightly effective

Uncertain

Effective

Very effective

0 5 10 15 20 25 30 35 40

Column1 Percentage (%) Frequency

Source: Sampling data

The answers to question 4.8 are displayed in the bar graph above. According to the bar graph,
31/130 respondents (24%) and 38/130 (29%) respondents agreed with the statement in a strong
way. 17/130 (13%) respondents disagreed fiercely, while 25/130 (19%) respondents expressed
neutrality. Only 19/130 (15%) people were sure that the controls and functions weren't working.
The interviewers suggested that diversification as a desirable activity that may be made to
improve corporate financial performance. The respondent believes that variety is a great method
to improve an organization's internal structure.

A total of 69 agreed on the effectiveness of the internal audit function in reviewing individual
systems and processes. The remaining 61 respondents said internal audit was not effective in
reviewing individual systems and processes.

46
Therefore, it can be concluded from the above analysis that more than 50% of her respondents
believe that the internal audit function is effective in reviewing individual systems and processes.
Internal audit therefore plays a very important role in reviewing individual systems and
processes.

4.10 Internal Audit and Provision of Financial Control

Table 4.10

Frequency %
Very effective 42 32
Effective 30 23
Uncertain 27 21
Slightly effective 21 16
Ineffective 10 8
Missing 10 -
Total 140 100
Source: Research conducted

In the table displayed above, 42/130, or 32% of respondents, indicated that the internal audit
function is highly effective in assessing the effectiveness of financial control practices. Thirty of
the 130 (23%) said their function was effective, but 27 of the 130 (21%) wondered whether the
internal audit function could assess the effectiveness of the provision of financial controls.

Twenty-one in 130 (16%) believed the internal audit function was ineffective in assessing the
effectiveness of financial control delivery. The remaining 10/130 (8%) indicated that the internal
audit function rated the effectiveness of financial control delivery very highly. Overall, 72 out of
130 (55%) agreed with the effectiveness of the internal audit function in evaluating the
effectiveness of financial control practices. Remaining 58/130 (45%)

47
Respondents noted that internal audit was ineffective in assessing the effectiveness of the
provision of financial controls. Therefore, we can conclude from the above analysis that more
than 50% of respondents believe that the internal audit function is effective in assessing the
effectiveness of the provision of financial controls. Internal audit therefore plays a very
important role in assessing the effectiveness of the provision of financial controls.

4.11 Managerial Controls and Internal Audit

Table 4.11

Frequency %
Very effective 36 28
Effective 32 25
Uncertain 27 21
Slightly effective 19 15
Ineffective 16 12
Missing 10 -
Total 140 100
Source: Authors’ Design

The data obtained above shows that 36/130, or 28% of respondents, indicated that the internal
audit function was highly effective in evaluating administrative controls within their
organization. Thirty-two of 130 (25%) were unsure whether the internal audit function was
effective in evaluating the controls within their organization, while 27 of 130 (21%) was in
effect. Nineteen in 130 (15%) felt that the internal audit function was ineffective in evaluating
the controls within their organization. Sixteen of the remaining 130 (12%) of hers indicated that
the internal audit function was highly ineffective in evaluating administrative controls within
their organization.

Overall, 68/130 (52%) agreed with the effectiveness of the internal audit function in evaluating
administrative controls within their organization. Sixty-two of the remaining 130 respondents

48
(48%) said internal audit was not effective in assessing management controls within their
organization.

It can therefore be concluded from the above analysis that more than 50% of her respondents
believe that the internal audit function contributes to the effectiveness of evaluating performance
management within their organization. Internal audit therefore plays a very important role in
evaluating performance management within an organization.

4.12 Internal audit and operational policies control

Table 4.12
Frequency %
Very effective 41 32
Effective 29 22
Uncertain 24 18
Slightly effective 21 16
Ineffective 15 12
Missing 10 -
Total 140 100
Source: Authors’ Design

Table 4.12 views that 41/130, or 32% of respondents, indicated that the internal audit function is
highly effective in evaluating operational policy controls within their organization. (22%) said
the function was effective, but (18%) were unsure whether the internal audit function would be
effective in assessing operational policy controls within their organization. Indicated. (16%) felt
that the internal audit function was not effective in assessing operational policy controls within
their organization. The remainder (12%) indicated that the internal audit function was highly
ineffective in evaluating operational policy controls within their organizations. Overall, 54% of
them agreed with the effectiveness of the internal audit function in evaluating operational policy
controls within the organization. The remaining 46% of respondents said internal audit was not
effective in assessing operational policy controls within their organization.

49
Therefore, the researcher concluded from the above analysis that more than 50% of her
respondents believe that the internal audit function brings effectiveness to their assessment.
Hence operational policy control within the organization. Internal audit therefore plays a very
important role in evaluating operational policy controls within an organization.

4.13 Internal Audit and Financial Reporting

Frequency Valid %
Greatly Improved 42 32
Improved 39 28
Constant 31 22
Decreasing 18 13
Greatly Decreased - -
Total 130 100
Source: Authors’ Design

Respondents which showed interest in answering the questions were forty two, indicated that the
internal audit function has significantly improved the transparency of financial reporting within
their organization. Thirty-nine of the 130 (30%) indicated that the feature had improved the
transparency of financial reporting within their organization, while 31 of the 130 (24%) said it
had improved the transparency of financial reporting within their organization. I was unsure
about the impact of internal audit on creating quality. Eighteen in 130 (14%) believe that the
internal audit function has actually reduced the impact of financial reporting transparency within
their organization. The remaining 0/130 (0%) indicated that the internal audit function had
significantly reduced the transparency of financial reporting.

A total of 81/130 (62%) agreed with the effectiveness of the internal audit function in ensuring
transparency of financial reporting within the organization. The remaining 49/130 (38%) of those
surveyed indicated that internal audit generally reduces the transparency of financial reporting
within their organizations.

50
Therefore, we can conclude from the above analysis that more than 50% of his respondents
believe that internal audit has improved the transparency of financial reporting within
companies. Internal audit therefore plays a very important role in ensuring the transparency of
financial reporting.

4.14 Independence
Frequency %
Greatly Improved 39 30
Improved 32 25
Constant 27 21
Decreasing 23 18
Greatly Decreased 9 7
Total 130 100
Source: Authors’ Design

Representing 30% of respondents, indicate that the internal audit function has significantly
improved the independence of financial reporting within their organization. Thirty-two of 130
(25%) said the role improved the independence of financial reporting within their organization,
while 27 of 130 (21%) said it improved the independence of financial reporting within their
organization. I was unsure about the impact of internal audit on providing quality. Twenty-three
in 130 (18%) believed that the internal audit function had actually reduced the impact of
ensuring independent financial reporting within the organization. The remaining 9/130 (7%)
indicate that the internal audit function has significantly reduced the independence of financial
reporting within their organization.

Overall, 71/130 (55%) agreed with the effectiveness of the internal audit function in ensuring the
independence of financial reporting within their organization. Sixty-nine of the remaining 130
(45%) respondents said that internal audit has generally reduced the independence of financial
reporting within their organization. Therefore, we can conclude from the above analysis that

51
more than 50% of respondents feel that the internal audit function has improved the
independence of financial reporting within their organization. Internal audit therefore plays a
very important role in ensuring the independence of financial reporting within a company.

4.15 Accountability in Financial Reporting

Frequency %
Greatly Improved 41 32
Improved 33 25
Constant 29 22
Decreasing 17 13
Greatly decreased 10 8
Total 130 100
Source: Sample sampling

Based on the above data, 32% of respondents, indicated that the internal audit function has
significantly improved financial reporting accountability within their organization. Thirty-three
of the 130 (25%) indicated that their role improved accountability for financial reporting within
their organization, while 29 of the 130 (22%) said that the uncertain about the impact of internal
audit on providing financial reporting accountability for Seventeen in 130 (13%) believe the
internal audit function has actually reduced the impact of ensuring accountability discipline in
financial reporting within their organization. The remaining 10/130 (8%) indicate that the
internal audit function has significantly reduced financial reporting accountability within the
organization.

Overall, (57%) agreed with the effectiveness of the internal audit function in ensuring
accountability for financial reporting within the organization. The remaining (46%) of
respondents said that internal audit has generally reduced accountability for financial reporting
within their organizations. Therefore, we can conclude from the above analysis that over 50% of
respondents believe that internal audit has improved accountability for financial reporting within

52
their organizations. Internal audit therefore plays a very important role in ensuring accountability
in financial reporting within a company.

4.16 Fairness Reporting in Internal Auditing

Frequency Valid %
Greatly Increased 35 27
Improved 29 22
Constant 27 21
Decreasing 21 16
Greatly decreased 18 14
Total 130 100
Source: Research obtained

Results obtained during the research were that 35/130, of respondents, indicated that the internal
audit function has significantly improved the fairness of financial reporting within their
organization. Twenty-nine of the 130 said the role improved the fairness of financial reporting
within their organization, while twenty-nine of the 130 said it improved the fairness of financial
reporting within their organization were uncertain about the impact of internal audit on Twenty-
one in 130 believe that the internal audit function has actually reduced the impact of ensuring the
impartiality of financial reporting within their organization. The remaining thirteen indicate that
the internal audit function significantly reduces the impartiality of financial reporting within their
organization.

Overall, (55%) agreed with the effectiveness of the internal audit function in ensuring the
impartiality of financial reporting within their organization. (45%) respondents noted that
internal audit had generally reduced the impartiality of financial reporting within their
organizations. Therefore, we can conclude from the above analysis that over 50% of respondents
believe that internal audit has improved the fairness of financial reporting within their
organizations. Internal audit therefore plays a very important role in ensuring the impartiality of
financial reporting within a company.

53
4.17 Overall assessment of Reporting
Statement Greatly Improved Constant Decreasing Greatly
Improved Decreased

Independence 39 32 27 23 9
Accountability 41 33 29 17 10
Fairness 35 29 27 21 18
Totals 115 94 83 61 37

Mean 35 29 27 17 9
Source: Research obtained

The overall distribution average for internal audit functions is 117 placing in the “uncertain”
category. The variance of the distribution of the relationship between risk management and
internal audit with a standard deviation of respondents.

In conclusion, the majority of respondents believe that internal audit is highly effective in
improving their organization's risk management processes. Therefore, a function within the
organization is required.

4.6 Chapter Summary

In this chapter, we analyzed the data obtained from the conducted questionnaires and drew some
conclusions based on these data. The following chapters contain the findings, conclusions and
policy recommendations. The analysis and presentation of primary and secondary data were the
main topics of this chapter. This data was acquired from a questionnaire, interviews, and
financial reports from the companies. The researcher's ability to draw well-informed findings
from the analysis allowed for the development of the recommendations that are detailed in the
next chapter.

54
 CHAPTER FIVE
CONCLUSIONS AND RECOMMENDATIONS

55
5.0 Introduction
The chapter presents the findings, conclusions, and suggestions that resulted from the analysis
performed in the preceding chapter, along with the literature review and background data from
chapter 1's introduction.

5.1 Chapter Summaries

The researcher described the context of the study in Chapter 1, emphasizing that the users have
confidence in the audited financial statements. In a similar way, while evaluating the efficacy of
internal control systems, the private sector's internal audit function must operate in conjunction
with external audit. Corruption and associated problems, including financial statement fraud,
bribery, and purposeful failure to disclose certain transactions, continue to be documented in
various economic sectors, whether in affluent nations like the United States or in underdeveloped
nations like Zimbabwe. As a result of these problems, significant sums of money have been lost
and businesses have folded or are on the verge of doing so.

The literature on internal audit independence, internal audit team abilities and composition, and
internal audit members' professional achievements as they pertain to corporate governance
compliance was evaluated in Chapter 2 by other authors and scholars. As a result, there are
divergent opinions, and these are the gaps that the researcher would like to close.

The study of methodology, which was based on the research philosophy, research design,
sample, data collection techniques, and data presentation, was highlighted in chapter 3. The
private sector organizations provided the population. This chapter also included reliability,
validity, and ethical considerations. The methods to be used in data collecting were also
mentioned in the chapter. A questionnaire was used to gather primary data, and published papers
and company reports will be used to gather secondary data. In conclusion, the research
methodology will be a formal study with a focus on quantitative methods for assessing
questionnaire replies.

56
Chapter 4 examined the information gleaned from the administered surveys, and it drew some
conclusions from it.

This chapter, that is Chapter 5, has highlighted the chapter summaries, the findings, and the
recommendations. Additionally, it provided recommendations and implications, bringing up a
potential subject for additional research.

5.2 Findings
As a result of the analysis, it was determined that the internal audit function significantly
improved the risk management procedure within the entities. The internal audit function is a
crucial part of the management tools in enhancing accountability and transparency in financial
reporting through the compliance with laws, regulations, and operating standards. The internal
control system has a positive relationship with governance in that it enables compliance to ethics
and helps management achieve ethical matters.

5.3 Recommendations
To ensure corporate governance compliance, the internal audit functions in the private sector or
in Zimbabwe must be strengthened. More internal audit function independence must be
guaranteed if private owned companies are to achieve reporting openness and accountability. To
reach a broad range of private sector management and Boards, corporate governance norms must
be widely published.

Moreover, not only one geographical area (Harare) should be used when conducting research
because different place means that different sensitivity to the respondents. Other towns like
Bulawayo, Mutare and Victoria Falls should be taken into consideration too. There is need
therefore for a further study encompassing both the behaviors of the private sector entities and
their counterparts in the public sector.

57
5.5 Chapter Summary
This chapter has highlighted the chapter summaries, the findings, and the recommendations.

REFERENCES

References
A, M. C. (2004). Corporate Governance, Oxford, Oxford University Press.

ACCA. (2019). Global Learning Community.

Adam, G. L. (2004). A longitudinal Examination of Power circulation and its impact on organizational
perfomance.

Adeyemi. S.B, O. O. (2012). Factors affecting audit quality in Nigeria. International Journal of Business
and Social Science (3).

Aguilera, R. V. (2003). The Cross National Diversity of Corporate Governance: Dimensions and
Determinants. Academy of Management review, 444-465.

Ahmed, M. J. (2017). Internal audit as function to the corporate governance.

Alberti, F. (2001). The governance of Industrial districts. 82.

Bavly, D. (1999). What are the roles for regulators, directos and auditors. Quorum books.

58
Chakrabarti. (2014). Failure of management act.

Clarke, T. a. (1998). The transformation of management knowledge for the 21 Century .

Creswell, J. W. (2014). Quantitative, qualitative and mixed methods approaaches 3rd edition.

Creswell, J. W. (2014). Research Design: Qualitative, Quantitative and Mixed Approaches.

Darman, G. M. (2003). A guide to best practice for managers. The world organization.

Dignam, A. G. (2009). The Globalization of Corporate Governance.

Dunlop, I. T. (2001). Latest directions in Corporate governance.

Ehmer, J. (2009). The idea of work in Europe from Antiquity to modern times.

F., A. (2001). The governance of industrial districts.

Hart, O. (1995). Corporate Governance some theory and implications.

Ideagen. (2021). Internal audit.

Jeffers, E. (2005). Toward conveging models.

Jensen, M. C. (2000). Value maximaization and the coroporate objective function.

Jiang, Y. (2006). Corporate Governance across Institutional Contexts.

Kamau, K. &. (2014). Determinants of Corporate Capital Structure among private manufacturing firms.

Kang, C. (2005). Market economy and corporate governance.

Kimberly, A. T. (1995). Organizational behaviour and human decesion processes.

Kosnik, R. (1987). A study of Board Perfomance in Corporate Govenance.

Lee, S. (2004). Newly Recognesed corpotare social responsibility.

Mallin, C. A. (2004). Corporate Governance.

Martynova, M. R. (2011). Evidence on the international evolution and convegency of corporate

governance regulations.

Maune, A. (2015). Corporate Governance in Zimbabwe.

59
Meye. (2011). academic writing.

Millstein, I. M. (1998). Corporate governance, improving competativeness and accessebility of capital on

Corporate Governance.

Mugenda, M. &. (2009). Research Methods: Qualitative and Quantitative Approaches.

Njanike. (2012). Reducing corruption through risk. Sunday Mail.

Olajide. (2014). Forensic auditing.

Post, J. E. (2003). The changing world of Corporate Governance and its implications for Multilateral
Development.

Ricart, J. E. (2004). Sustainability in the boardroom.

Scott, J. (1997). Corporate business and Capitalit Classes.

Silva, S. M. (2003). Framework for assessing the quality of bank management and governance. Central
Bank of Brasil.

Stiles, P. a. (2001). How directors view their roles and responsibilities.

Tricker, R. L. (1994). An international review of Corporate Governance.

Watson, C. a. (2000). Average premium Investoors are willing to pay for good corporate governance.

Williamsom, O. E. (1984). Coroporate Governance.

60
 APPENDIX 1

QUESTIONNAIRE COVER LETTER

Chinhoyi University of Technology

Privare Bag 7724

Chinhoyi

Zimbabwe

4 November 2022

Dear Sir/Madam

RE: Request to collect data through questionnaire

I am a final year student at Chinhoyi University of Technology, perusing a Bachelor of Science

Honors Degree in Accountancy. In partial fulfillment of the programme, it is a prerequisite to
carry out a research project. I am currently carrying out a project entitled The role of auditing in
corporate governance. A case of MGI Chartered Accountants.

I hereby ask that you take a moment out of your busy day to answer the questions on the
following questionnaire. Would you kindly help this research investigation by supplying
pertinent information? There are no right or incorrect answers to this inquiry; what matters is
your truthful response. The data acquired through this method will be used exclusively for
academic reasons and will be handled in the strictest secrecy. You can call or email at the given
numbers for more information; email address:[email protected] and I am available
for call on +263 776 349 095.

Your corporation will be greatly appreciated.

61
Yours faithfully

Gaudencia Masiiwa

APPENDIX II

QUESTIONNAIRE

Part A

1 For how long have you worked under this company?

Less than 5 years [ ] 5-10 years [ ] Over 10 years [ ]

2. Are there any internal audit functions in your company?

YES [ ] NO [ ]

3. If the above question was NO, how does the entity perform internal audit functions?

Nothing is done [ ] Outsourcing [ ]

4. Does your entity follow business codes of ethics?

YES [ ] NO [ ]

5. How often does the corporate governance code awareness held for managers and directors?

62
 Weekly [ ] Monthly [ ] Quarterly [ ] Yearly [ ]

Part B

6. How effective are the following functions of internal audit on risk management and promoting
good governance in your entity? Use a scale of 1-5 where;

5= very effective, 4= effective, 3= moderately effective 2= slightly effective and 1=

ineffective

Statement 5 4 3 2 1
Risk identification
Risk monitoring
Assess business ethics
Assess performance
management
Provision of financial
controls
Provision of managerial
controls
Provision of operational
controls
Verification of audit
principles
Compliance with laws,
regulations and
contracts

7. How would you rate the following attributed of corporate governance in 5 years later?

63
Statement Greatly Improved Constant Decreased Greatly
improved (5) (4) (3) (2) Decreased
(1)
Transparency
Independence
Accountability
Fairness
Social
Responsibility

THANK YOU FOR YOUR COOPERATION!!!

64