Audit quality, team competence and financial performance of commercial banks in Kampala central division

Abstract

The study sought to establish the relationship between audit quality and financial performance of commercial Banks in Kampala Central Division. The study adopted across sectional and correlation quantitative design using 24 commercial Banks in Kampala central 24 commercial banks in Kampala central division that were drawn from a population of 26commercial banks. The sample size was determined using Krejcie and Morgan Tables (1970). The data were tested for reliability and validity, analyzed using SPSS version 21 and results presented based on the study objectives. The correlation coefficient analysis revealed positive and significant relationships between audit quality, team competence and financial performance of commercial Banks which implies that when one variable is improved it leads to improvement of the other. Furthermore, the hierarchical regression analysis indicates that audit quality combined with team competence have a greater predictive potential on the financial performance (Adj R2 of 0.324). However, it was further revealed that audit quality has a more direct effect on the financial performance based on the individual contribution (R Square Change 0.202). Therefore, it’s worth recommending that The management of the commercial banks should ensure that they hire quality audit firms and ensure that employees who work in the internal audits are well qualified and they should do this by tracking their history and also how big they are in dealing with different bigger audits. This will enable the commercial banks to get independent and quality reports about their performance and this will help them to continue correcting their mistakes and improve performance. It should ensure that the employees have the right attitude towards work, this can be done by ensuring that the environment is conducive for business continuity and it enables workers to be promoted.