Letters in Economic Research Updates
Does Internal Audit Affect Financial Success? Evidence from Cameroon's Microfinance Institutions
Abstract
Tataw Elvis M, Jervis Sambilla Jomi and Ngoata Diangha. S
In the pursuit of financial inclusion and economic empowerment, understanding the factors that enhance its performance is paramount in today’s dynamic financial landscape in Cameroon. This study examines the effect of internal auditing on the financial success of microfinance institutions in Cameroon, focusing primarily on UNICS Plc. It specifically explores how auditors’ independence and competence influence financial outcomes. Utilizing a quantitative research approach, primary data collection was facilitated through a self-report questionnaire distributed to 60 individuals in MFIs across Douala, Bamenda, Buea, and Yaoundé. After data cleaning and measurement model assessment, Ordinary least squares multiple predictive modeling techniques was applied to test the hypotheses. The results reveal a strong correlation between internal audit independence and competence and the financial performance of MFIs, enhancing accountability, reducing fraud, and ensuring regulatory compliance. Our findings underscore the essence to strengthen internal audit practices to promote sustainable growth and stability in Cameroon’s financial sector, offering recommendations for policy and practice.