Internal Audit Independence and Share Performance of Firms Listed In the Nairobi Stock Exchange

Abstract

Internal audit is considered as the backbone of the business accounting as it is the section that scrutinizes all businesses transactions of a company. The main objective of the study is to establish the relationship between Internal Audit Independence and Share performance of firms listed in the Nairobi Stock Exchange. The study adopted a descriptive research design targeting 60 companies quoted in the Nairobi Stock Exchange as of December 2013. The study found existence of significantly positive correlation between internal audit independence and share performance (Pearson correlation coefficient r = .456 Sig. = .011). It is recommended that listed companies should adopt effective corporate governance practices that address key auditing independence for effectiveness of audit department. This will go a long way to cut or eliminate wastage and thus improve company returns to attract investors in the stock exchange market.