SAMPLE RESEARCH PROPOSAL PROMOTING GOOD GOVERNANCE IN PUBLICINSTITUTIONS OF GHANA: THE ROLE OF THEINTERNAL AUDITOR 5/5/2009SCHOOL OF BUSINESS, UNIVERSITY

OF CAPE COAST, GHANA ISHMEAL OFORI AMPONSAH (STUDENT)

Table of Contents Introduction ................................................................................................................3 Background of the Study ........................................................................................3 Problem Statement ..................................................................................................4 Research Questions: ...........................................................................................4 Hypothesis: ..........................................................................................................4 Objectives ................................................................................................................5 Significance of Study ...............................................................................................5 Literature Review ........................................................................................................6 Definition of Internal Audit ...................................................................................6 Role of the Internal Auditor in governance ..........................................................7 Methodology ............................................................................................................8 Research Design ...................................................................................................8 Population ............................................................................................................8 Sampling and Sampling Technique .......................................................................8 Data Collection ....................................................................................................9 Data collection instrument ...................................................................................9

Data Analysis .....................................................................................................12 Timescale ...........................................................................................................12 Limitations ................................................................................................................12 References ................................................................................................................13 Research proposal SB/MAC/08/0005 Page 2

Promoting Good Governance in Public Institutionsof Ghana: The Role of the Internal Auditor Introduction All over the world there is a realization that the Internal Audit activity has the potential to provide hitherto unparalleled services to management in the conduct of their duties. This potential has been turned into a challenge and embodied in the new definition of InternalAuditing from the Institute of Internal Auditors (the IIA). Background of the Study The Government of the Republic of Ghana by the Internal Audit Agency A ct, 2003 (Act 658)established the Internal Audit Agency as an apex oversight body to coordinate, facilitate and provide quality assurance for Internal Audit activities within the public sector (Section 16 of Act658). The Internal Auditors value lies in how well he has been able to contribute to theachievement of the overall organisational objective. The Internal Auditor should constantly seek to make himself relevant to his organisation by providing information that will

makemanagement take decisions that impact positively on their ability to achieve the organisationalgoals.However, according to research and surveys conducted by Deloitte & Touche (2004) and theInternal Audit Agency of Ghana (2006), much of the work of Internal Audit has been veryrestrictive in terms of scope. This needs to be addressed if the required return on investment inthe Internal Audit activity is to be attained.

Problem Statement Public sector managers do not support Internal Audit. The Internal Audit function in theGhanaian public sector faces a perception and, to some extent, a credibility problem as a value-adding unit of the organisation. The Internal Audit Agency (2006) believes that the importanceof Internal Audit is "shrouded in obscurity. This unfortunate background continues to playdown the importance of Internal Audit as a key function that can strengthen the oversightresponsibility of the governing body. This reflects in the management attitude towards theInternal Auditor. Most often than not the budget of the Internal Audit Unit, if any exist at all, iswoefully inadequate to enable them meet the resource requirements of their annual audit plans.Internal Auditors are seen more as fault finders rather than solution providers and partners in theGovernments strive for organisational excellence.

Management Question: Why do public sector managers fail to support the InternalAudit function and what can be done to curb it? Research Questions: 1.What account for the low support for Internal Audit by public sector managers?2.What actions are necessary to get the support of management of internal auditing in the public sector?

3. Is there a link between the quality of service the Internal Auditor provides for hisorganisation and the attitude of managers towards the Internal Audit function? Hypothesis: There is no relationship between the quality service Internal Auditors provide for their organisations and the attitude of managers towards the Internal Audit function.

Objectives The objectives of the research project are to: 1. Examine the factors responsible for the low support for the Internal Audit Activity bymanagers of public institutions. 2. Identify specific actions required to secure support of managers for the Internal AuditActivity. 3. Establish the relationship between quality of service and support of managers for InternalAudit. Significance of Study The significance of the study will be to:1.Improve public understanding of the role of the Internal Auditor in the achievement of organisational objectives.2.Improve literature on public sector Internal Auditing in Ghana.3.Fulfill the MBA requirement.

Literature Review The Government of Ghana has taken a proactive step in establishing the Internal Audit Agency(The Agency) by an Act of Parliament in 2003. The IAA is mandated to co-ordinate, facilitateand provide quality assurance for internal audit activities within the public sector institutions (theIAA Act 2003, Act 658). The Agency has formulated three strategies which it is currently pursuing to improve the image of the Internal Audit function in the public sector. These are asfollows:1.Professional Practice Framework which aims at developing key documents and templatesfor use by the Internal Audit function such the Internal Audit Regulations, InternalAuditing Standards, Audit Programmes Internal Audit Charter and Annual Audit Planningtemplates.2.Human Resource Development which seeks to facilitate the recruitment, training anddevelopment of internal auditors to be proficient in applying internal audit standards, procedures and techniques in performing engagements.3.Quality Assurance and Improvement which addresses the issue of continues improvementin the performance of the internal audit activity. Definition of Internal Audit According to the Institute of Internal Auditors, internal auditing is an independent, objectiveassurance and consulting activity designed to add value and improve an organizationsoperations. It helps an organization accomplish its objectives by bringing a systematic,

disciplined approach to evaluate and improve the effectiveness of risk management, control, andgovernance processes (March 2007).This definition actually seeks to demonstrate the depth and breadth of the internal audit activitywithin an institution as against the previous orientation of reviewing payment transactions over the years. Modern internal audit covers (or should cover) all activities of the organisation.Therefore the scope of internal audit is no

longer restricted to the processes and systems in theaccounts and finance function. Role of the Internal Auditor in governance The value of the modern day internal auditor lies in his ability to help management to achieve itsobjectives. According to a research jointly conducted by Deloitte & Touche and the Institute of Internal Auditors, U.K., (2004) improved attitudes toward internal audit are built on a belief thatinternal audit functions are creating greater value for their organisations.Governance refers to all the strategic plans of the organisation to demonstrate its commitment toquality and excellence. They reflect the strategic thinking and orientation of the Board andManagement to achieve the objectives of the organisation. However, every decision and programme carries with it an element of risk of nonachievement, due to uncertainties associatedwith the implementation of programs. Some of the risks are reputational, financial, operational,and information technology related. It would therefore be appropriate to have a structured way of identifying events that would impact negatively on the ability of management to achieve their objectives and also to take advantage of opportunities and other events that could be leveraged toachieve those same objectives. i.e. an integrated risk management framework that is embeddedin the planning process of the organisations. Internal Auditors are experts in creating and

promoting a risk management culture that is necessary to the effective implementation of the risk management framework. They can also assist in monitoring the framework.

Methodology This section presents an overview of the methods to used in the study. Areas covered include theresearch design, population, sample and sampling techniques, data collection and analysis. Research Design The study will involve the evaluating the role of Internal Auditors in the good governance of theorganisations in the public sector. Consequently, the research will be designed to achieve theobjectives set out by the researcher. Population The public sector of Ghana is the biggest employer of Internal Auditors and involves severalorganisations including Ministries, Departments and Agencies (MDAs). The public sector alsoincludes Metropolitan, Municipal and District Assemblies MMDAs). The targeted populationfor the study thus includes the following: 1. Chief Directors and Directors of all MDAs. 2. Coordinating Directors, Finance Officers and other staff of MMDAs. 3. Heads and staff of internal Audit Depar tments (IADs) of MDAs and MMDAs. Sampling and Sampling Technique It obvious from the definition of the population above that a census is not feasible in this study.Accordingly, the researcher will adopt the survey type of research in which a sample from the

target population will be used for the study. In total, a sample of 185 elements will be selected from a targeted population of 300. Details of the sample are as follows: 15 Chief Directors and 30 Directors of MDAs. 20 Coordinating Directors, 20 Finance Officers and 20 other staff of MMDAs. 40 Heads of IDAs and 40 Internal Auditors of MDAs and MMDs.The study will adopt a multistage stratified sampling method to select elements. First, the population will be divided into MDAs and MMDAs. Next, the MDAs will be grouped intoMinistries, Departments and Agencies and the MMDAs into Metropolitan, Municipal andDistricts. This will ensure a fair representation of each group of institutions since their operations are significantly different. Data Collection The focus of study is on attitudes and perception and the importance of primary data cannot beover-emphasised. However, secondary data will also be collected to augment the studies.Before the actual data collect the researcher will collect introductory letter from the School of Business of the University of Cape Coast to the sampled institutions. The initial visit to theselected institutions will therefore be to introduce himself, familiarize himself with thoseinstitutions as well as seek their consent for the study. Data collection instrument The researcher will collect data by administering a questionnaire. The questionnaire will usestructured questions, consisting of approximately 20 questions divided into three sections A,

B, and C. Section A will consist of seven questions seeking to answer the first researchquestion. Section B will consist of six questions covering the second research question whereasSection C will consist of questions to test the hypothesis and also answer the third researchquestion. Sample investigative questions: Table 1 below provides samples of the investigativequestions. Table 1:

Sample Investigative Questions SectionResearch QuestionInvestigative Questions A What account for the lowsupport for Internal Audit by public sector managers? Are you aware of the role of the Internal Auditor in you organisation? How important do you think is the role of theInternal Auditor to your organisation? In your view, is the Head of Internal Audit placedappropriately on the organisational chart?B What actions are necessary toget the support of management of internalauditing in the public sector?

 Generally, how will you rank the relevance of Internal Audit in your organisation? What reasons account for your answer above? What do you consider the three most importantactions needed to promote Internal Auditing inthe public sector?C Is there a link between thequality of service the InternalAuditor provides for hisorganisation and the attitudeof managers towards theInternal Audit function? What do you consider to be the highest achieve of your internal audit department? Would agree to the statement that ones perception of the Internal Auditor is influenced byhow they perceive his role in the company? Will your attitude towards Internal Audit bedifferent if they help you achieve your objectives?

Most of the structured questions will be the close-ended type and respondents willbe asked to mark the appropriate box matching the correct answer. Otherquestions, however, will require respondents to give opinions.

Data Analysis The responses to the structured close-ended questions will be rated in percentages. The percentage of respondents for each alternative will be given and analysed. The data collectedwill be analysed using the computer software known as Statistical Package for Service Solution(SPSS). Timescale June July 2009: review of literature August 2009: draft literature review September 2009: agree research strategy with supervisor October 2009: agree formal access to organisations for collection of primary data November 2009: compile, pilot and review questionnaire December 2009 - January 2010: administer questionnaire February 2010: final collection of questionnaire March 2010: data analysis

April May 2010: final writing of project report. Limitations The researcher cannot cover all the ten regions of Ghana. The research will therefore be restricted to fiveout of the ten regions.

References The Institute of Internal Auditors (the IIA). (2007), The Professional Practices Framework. Florida, U.S.: The IIA Research Foundation.Spencer, P. K. H. (2003), The Internal Auditing Handbook. U.K. City University Press.Deloitte & Touche Enterprise Risk Services & Institute of Internal Auditors UK and Ireland(2004), The Value Agenda. Available atwww.iia.org.uk , (Accessed on 14 April 2009).Internal Audit Agency, Republic of Ghana. (2007), Annual Report to the Office of the President .Accra: the IAAInternal Audit Agency, Republic of Ghana. (2006), Championing Excellence in Universities of Ghana: The Role of the Internal Auditor. A paper presented to the Association of theInternal Auditors of the Universities of Ghana at their annual congress in 2006. Accra:Ransford Agyei, Deputy DirectorGeneral.Saunders, M., Lewis, P., & Thornhill, A. (2007), Research Methods for Business Students

(4 th ed.) Harlow, England: FT Prentice HallBlumberg, B., Cooper, D.R., and Schindler, P.S. (2005) Business Research Methods ,Maidenhead, McGraw-Hill