Efficiency Of Internal Audit In Risk Management Strategies Of Star Rated Hotels In Nairobi


Jane Kawira



The initiative was driven by realization that internal audit work was based on traditional approach where solution to problems come after the Company has already suffered loss. The government wants Companies to adopt risk based audit approach, where the audit identifies the possibility of loss and institute strategies to prevent problem from occurring. The purpose of this research to evaluate the efficiency of internal audit in risk management strategies and came up with recommendation on how internal audit can efficiently management risk in star rated hotels in Nairobi.

This study entails both qualitative and quantitative data hence descriptive research is valid for the purpose of this study. In Nairobi City there are 18 hotels rated three to five stars out of the 27 classified hotels and restaurant. This is 66.7% of the 1 to 5 star rated hotels and restaurants from Nairobi. Therefore the sample population was 9 Managers, 45 departmental heads and 36 internal audit staff making a total sample of 90 out of 180.The study used stratified random sampling method in order to focus on the respondents that have the information to being sought.   The captured was presented by use of tables and percentages to enhance a meaningful description. Weighted average was calculated where necessary to determine positive or negative position on each statement from respondents then ranked accordingly. Furthermore, inferential statistical analysis (chi-square) was used to measure statistical significance of the variables.

Respondents indicate there was Risk Management in hotels, but it does not involve the stake holders. The inferential statistics analysis also showed that respondents were unfamiliar with modern methods of Risk Management. However, the findings of this study show that the internal auditors in the hotel are lagging behind in the implementation of modern methods of Risk Management as advocated by the various models. From the analysis, it can be concluded that  internal auditors are underperforming on thier role and hence inefficient.