The importance of internal audit in increasing performance of microfinance institutions: The case of the developing country

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Abstract

The study aims to explore the role and importance of internal audit in increasing performance in microfinance institutions in Kosovo. The operation of microfinance institutions in Kosovo is a necessity to meet the demands of the people, households, and small businesses, who do not have access to financial banking services (Kupina, 2018). The presence of an internal audit body in the organization is a need and necessity for good governance and performance of the organization. This study was conducted in five microfinance institutions in Kosovo. The study is based on data collected from the field through a questionnaire (N = 80) conducted face to face with respondents, with both genders represented in microfinance institutions in Kosovo. The data collected from the field were systematized and analyzed in the SPSS program. Of the total number of respondents, 64% were male and 36% were female. Most of the respondents were economists (88%), lawyers (4%), IT (6%), and other professions (2%). The results of the study (96.3%) show that an internal audit is necessary for the organization. Also, from the findings of the study, we learned that (66.3%) internal audit positively affects good governance and performance of the organization.

Keywords: Audit, Internal Organizations, Performance, Kosovo

Authors’ individual contribution: Conceptualization — K.S.-G., D.R., and M.H.; Methodology — K.S.-G. and D.R.; Data Curation — K.S.-G.; Writing — Original Draft — K.S.-G., D.R., and M.H.; Writing — Review & Editing — K.S.-G. and D.R.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G32, M42, M48

Received: 28.09.2021
Accepted: 09.08.2022
Published online: 11.08.2022

How to cite this paper: Shahini-Gollopeni, K., Rexha, D., & Hashani, M. (2022). The importance of internal audit in increasing performance of microfinance institutions: The case of the developing country. Corporate Governance and Organizational Behavior Review, 6(3), 120–127. https://doi.org/10.22495/cgobrv6i3p11