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ABSTRACT

The study investigated the relationship between Internal Audit Quality, Internal Control Systems

and Accountability of Discretionary Development Equalization Grant Projects (DDEG) in

Iganga District Local Government. The study was anchored on the Agency Theory as authored

by Alchian and Demsetz (1973) and Jensen and Meckling (1976). The study focused on three

specific objectives which it sought to address. The three objectives were; to examine the

relationship between the Internal Control Systems and Accountability of DDEG Projects in

Iganga District Local Government, to examine the relationship between the Internal Audit

Quality and Accountability of DDEG Projects in Iganga District Local Government and to

determine the relationship between Internal Control Systems and Internal Audit Quality on the

variance in accountability of DDEG Projects in Iganga District Local Government. To deliver

answers to the above objectives, the study adopted a cross-sectional survey design where

quantitative data were collected from 59 respondents. The questionnaires were used as methods

of data collection. Descriptive and Correlation analyses were used as methods of data analysis.

The validity and reliability tests were carried out and the dataset passed with over 70%. 59

questionnaires were administered to the project managers of DDEG and 51 were returned fully

completed giving a response rate of 86.4%. The general outcome of the study showed that

Internal Audit Quality and Internal Control Systems positively correlated with the Accountability

of DDEG projects in Iganga District Local Government. Other specific findings indicated that

Internal Control Systems positively correlated with the Accountability of DDEG Projects in

Iganga District Local Government. Internal Audit Quality also positively correlated with the

Accountability of DDEG Projects in Iganga District Local Government. The general conclusion

was that Internal Audit Quality and Internal Control Systems positively correlated with the

Accountability of DDEG projects in Iganga District Local Government. The study recommended

that the management of DDEG Projects in Iganga District Local Government should develop

Internal Control Systems policy focusing on: segregating accounting duties, restricting access to

financial systems and increasing oversight.

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