Sample Research Proposal

SAMPLE RESEARCH PROPOSAL

PROMOTING GOOD GOVERNANCE IN PUBLIC INSTITUTIONS OF GHANA: THE ROLE OF THE INTERNAL AUDITOR 5/5/2009 SCHOOL OF BUSINESS, UNIVERSITY OF CAPE COAST, GHANA

ISHMEAL OFORI AMPONSAH (STUDENT)

Research proposal – SB/MAC/08/0005

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Table of Contents Introduction.................................................................................................................................................1 Background of the Study.........................................................................................................................1 Problem Statement..................................................................................................................................2 Management Question:.......................................................................................................................2 Research Questions:............................................................................................................................2 Hypothesis:..........................................................................................................................................2 Objectives................................................................................................................................................3 Significance of Study................................................................................................................................3 Literature Review.........................................................................................................................................4 Definition of Internal Audit..................................................................................................................4 Role of the Internal Auditor in governance..........................................................................................5 Methodology...............................................................................................................................................6 Research Design...................................................................................................................................6 Population...........................................................................................................................................6 Sampling and Sampling Technique......................................................................................................6 Data Collection....................................................................................................................................7 Data collection instrument..................................................................................................................7 Data Analysis.......................................................................................................................................9 Timescale.............................................................................................................................................9 Limitations...................................................................................................................................................9 References.................................................................................................................................................10

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Promoting Good Governance in Public Institutions of 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 Internal Auditing 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 co-ordinate, facilitate and provide quality assurance for Internal Audit activities within the public sector” (Section 16 of Act 658). The Internal Auditor’s value lies in how well he has been able to contribute to the achievement of the overall organisational objective. The Internal Auditor should constantly seek to make himself relevant to his organisation by providing information that will make management take decisions that impact positively on their ability to achieve the organisational goals. However, according to research and surveys conducted by Deloitte & Touche (2004) and the Internal Audit Agency of Ghana (2006), much of the work of Internal Audit has been very restrictive in terms of scope. This needs to be addressed if the required return on investment in the Internal Audit activity is to be attained. Research proposal – SB/MAC/08/0005

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Problem Statement Public sector managers do not support Internal Audit. The Internal Audit function in the Ghanaian public sector faces a perception and, to some extent, a credibility problem as a valueadding unit of the organisation. The Internal Audit Agency (2006) believes that the importance of Internal Audit is "shrouded in obscurity”.

This unfortunate background continues to play

down the importance of Internal Audit as a key function that can strengthen the oversight responsibility of the governing body. This reflects in the management attitude towards the Internal Auditor. Most often than not the budget of the Internal Audit Unit, if any exist at all, is woefully 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 the Government’s strive for organisational excellence. Management Question:

Why do public sector managers fail to support the Internal Audit 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 his organisation 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.

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Objectives The objectives of the research project are to: 1. Examine the factors responsible for the low support for the Internal Audit Activity by managers of public institutions. 2. Identify specific actions required to secure support of managers for the Internal Audit Activity. 3. Establish the relationship between quality of service and support of managers for Internal Audit.

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.

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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, facilitate and provide quality assurance for internal audit activities within the public sector institutions (the IAA 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 as follows: 1. Professional Practice Framework which aims at developing key documents and templates for use by the Internal Audit function such the Internal Audit Regulations, Internal Auditing Standards, Audit Programmes Internal Audit Charter and Annual Audit Planning templates. 2. Human Resource Development which seeks to facilitate the recruitment, training and development 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 improvement in the performance of the internal audit activity. Definition of Internal Audit

According to the Institute of Internal Auditors, “internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes” (March 2007).

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This definition actually seeks to demonstrate the depth and breadth of the internal audit activity within 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 the accounts 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 its’ objectives. 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 that internal audit functions are creating greater value for their organisations”. Governance refers to all the strategic plans of the organisation to demonstrate its commitment to quality and excellence. They reflect the strategic thinking and orientation of the Board and Management to achieve the objectives of the organisation.

However, every decision and

programme carries with it an element of risk of non-achievement, due to uncertainties associated with 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 to achieve those same objectives. i.e. an integrated risk management framework that is embedded in 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.

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Methodology This section presents an overview of the methods to used in the study. Areas covered include the research 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 the organisations in the public sector. Consequently, the research will be designed to achieve the objectives set out by the researcher. Population

The public sector of Ghana is the biggest employer of Internal Auditors and involves several organisations including Ministries, Departments and Agencies (MDAs). The public sector also includes Metropolitan, Municipal and District Assemblies MMDAs). The targeted population for 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 Departments (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.

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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 into Ministries, Departments and Agencies and the MMDAs into Metropolitan, Municipal and Districts.

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 be over-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 the selected institutions will therefore be to introduce himself, familiarize himself with those institutions as well as seek their consent for the study. Data collection instrument

The researcher will collect data by administering a questionnaire. The questionnaire will use structured 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 research question. Section ‘B’ will consist of six questions covering the second research question whereas Section ‘C’ will consist of questions to test the hypothesis and also answer the third research question. Sample investigative questions:

Table 1 below provides samples of the investigative questions.

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Table 1: Sample Investigative Questions

Section Research Question

Investigative Questions 

 ‘A’

 ‘B’

 ‘C’

What account for the low  support 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 the Internal Auditor to your organisation?



In your view, is the Head of Internal Audit placed appropriately on the organisational chart?



Generally, how will you rank the relevance of Internal Audit in your organisation?

What actions are necessary to get the support of  management of internal auditing in the public sector? 

 Is there a link between the quality of service the Internal  Auditor provides for his organisation and the attitude of managers towards the Internal Audit function? 

What reasons account for your answer above? What do you consider the three most important actions needed to promote Internal Auditing in the public sector? What do you consider to be the highest achieve of your internal audit department? Would agree to the statement that one’s perception of the Internal Auditor is influenced by how they perceive his role in the company? Will your attitude towards Internal Audit be different if they help you achieve your objectives?

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

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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 collected will 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 five out of the ten regions.

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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 at www.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 IAA Internal 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 the Internal Auditors of the Universities of Ghana at their annual congress in 2006. Accra: Ransford Agyei, Deputy Director-General. Saunders, M., Lewis, P., & Thornhill, A. (2007), Research Methods for Business Students ed.) Harlow, England: FT Prentice Hall

(4th

Blumberg, B., Cooper, D.R., and Schindler, P.S. (2005) Business Research Methods, Maidenhead, McGraw-Hill

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