EFFECT OF STAFF ATTITUDE TOWARDS EXTERNAL AUDIT ON FINANCIAL PERFORMANCE OF COUNTY GOVERNMENT OF NAKURU, KENYA

Abstract

The auditor general’s findings and recommendations are aimed at improving the accountability of government institutions. The attitude of the staff is pivotal to this. The purpose of this study was to examine the effect of staff attitude towards external audit on the financial performance of the County Government of Nakuru, Kenya. The study aimed to determine whether a positive attitude towards external audit leads to improved financial performance, including improved revenue collection, effective utilization of public resources, and better management of public debts. A conceptual framework was developed to guide the study, which posited that staff attitude towards external audit influences financial performance through its effect on the adoption of external audit recommendations and the adoption of best practices. The study used a descriptive research design and a sample size of 80 respondents drawn from the finance department of the County Government of Nakuru. Structured questionnaires were used to collect data, and the data was analysed using descriptive statistics, correlational analysis and multiple linear regressions. The results of the study showed that there is a positive relationship between staff attitude towards external audit and financial performance in the County Government of Nakuru. The study also identified several factors that influence staff attitudes towards external audit, including the external audit's focus on mistakes, compliance with professional standards, objectivity, freedom from political interference, and the trustworthiness of audit reports. The study concluded that staff attitude towards external audit affects financial performance of county Government of Nakuru, Kenya. As a result the study recommends that by addressing staff attitudes towards external audit the can enhance financial performance.