Various research findings on the collapse of Enron
Corporation in 2001 reveal that despite having structures and mechanisms for
good corporate governance, everybody at the company disregarded these rules and
regulations. Like Enron, the RDA has laid down regulatory provisions that
specify the governance structures and processes including the Internal Audit
function at the institution. However, these guidelines and principles are
either circumvented or manipulated,
resulting in poor performance and wastage of resources, thereby
adversely affecting the effectiveness of the Internal Audit function at the
institution. Therefore, research was conducted
using a cross-sectional descriptive study design with both qualitative
and quantitative methods to ascertain the impact of poor corporate governance
on the effectiveness of Internal Audit at the RDA. The objectives of the study
were to evaluate the corporate governance practices and ascertain whether or
not there was control circumvention, distortion, and manipulation of these
structures and mechanisms resulting in challenges for the Internal Audit
activity at the institution with a view to coming up with measures to enhance
or strengthen existing corporate governance structures in the Road Sector in
general and the RDA in particular. Poor corporate governance practices affect
the efficiency and effectiveness of operation for not only the institution but
also the internal audit activity in an organization and lead to failure to
achieve organizational objectives. Factors that contribute to poor corporate
governance at the RDA, included, making appointments to the Board and Audit
Committee outside the provisions of the statutes and without regard to
specified qualifications. The results showed a direct and significant
relationship between poor corporate governance and the effectiveness of the
Internal Audit activity at the RDA. To strengthen the supervision and oversight
role of the board, members should be appointed in line with the statutes and
taking into account, skills, and competencies.
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