Assessing the role and effectiveness of audit committees in some selected rural banks in Ghana

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AUGUST, 2015
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This study seeks to assess the roles and effectiveness of audit committees in three selected rural banks in the Ashanti Region, namely Juaben, Atwima Kwanwoma and Nwabiagya to address the weak internal controls in most rural banks. The objectives are to assess current state of the Audit Committee practices and its role in selected rural banks; to identify the main factors that improve the effectiveness of the Audit Committee practices in the rural banks selected; examine the contribution of audit committee to good corporate governance; and determine the challenges mitigating the efficient operations of the audit committees in the selected rural banks and their influence on both internal and external audit. A multiple case study approach was used with the simple random and convenience sampling for selecting board members and senior staff and systematic sampling for customers, a sample size of 100 comprising 30 senior staff/board members and 70 customers of the institutions was used. It was discovered that all the selected banks favoured the composition of their respective audit committees and they have adequate authority function. . Also, it was detected that the monitoring role of the committee to the external audit firm's compliance with the existing ethical and regulatory requirements in Ghana are not effective as required. The role of Audit Committee in recommending and approving the appointment or termination of the heads of the internal audit division has been less effective although it reviews the annual internal audit reports, budget and other findings of internal audit. . It is recommended that adequate resources be provided to the committees to facilitate their efficient delivery of service. The committees should up their game in playing their role of effective monitoring of both the external and the internal auditors. They should ensure that the internal audit enjoy the requisite independence in its operations. They are required to be involved in the appointment and termination of both the internal and external auditors to the company.
A Thesis submitted to the Department of Accounting and Finance, Kwame Nkrumah University of Science and Technology in partial fulfilment of the requirements for the degree of Master of Business Administration (Accounting Option)