The role of auditing towards effective utilization of funds in financial institutions: case study Postbank Uganda limited Kampala Road branch

Abstract

This research has been carried out within Post bank Uganda limited Kampala road branch to establish the role of auditing towards effective utilization of funds within an organization. Almost all literature on auditing by various scholars have expressed that auditing enhances the effective utilization of funds within organizations. The rampant scandals that have been taking place in the past few years over the world, in various organizations that were constantly audited have led to this study. The existing law requiring listed organizations to be audited and the general public refusal to buy shares in companies without audited financial statements brought this question as a concern.” What is the role of auditing towards effective utilization of funds within a financial institution?” The objectives of this study were; to determine the role of auditing towards effective utilization of finds in financial institutions, to identify existing auditing policies and practices within Postbank and to assess accounting and internal control system within Postbank. Questionnaires were used to collect the information and data were analyzed in the light of literature reviewed. The following issues were found out by the researcher during her study. The researcher found out that some employees do not clearly understand the role of auditing in their institution, which is so unfortunate. Some even suggested that auditing should not continue in post bank. The researcher discovered that post bank has somehow experienced misappropriation of funds. Having found out the above mentioned issues, the researcher recommended the following to be done. The researcher recommended orientation of employees about the role of auditing in such an institution so that they are able to help the organization prevent uncalled for scandals. She also recommended constant internal checks on the financial statements and internal controls so as to avoid such mistakes of omission of entries in the books of accounts. To a greater extent findings showed that auditing enhances proper utilization of funds and resources in financial institution due to the fact that a big percentage of the respondents were in support of it. The conclusion reached in support of the various scholars that auditing enhances effective utilization of financial resources within financial institutions.