Effect of Financial Auditors’ Proficiency on Risk Management Process among Commercial Banks in Kenya

Abstract

This study investigates the effect of financial auditors' proficiency on the risk management processes of commercial banks in Kenya. Given the increasing incidents of fraud and financial instability in the banking sector, this research examines the competencies, articulation, expertise, and prudence of financial auditors and their influence on risk management practices. Employing a descriptive research design and a positivist research philosophy, data were collected from a sample of 230 respondents across 39 commercial banks. The study reveals that auditors' proficiency significantly enhances risk identification, analysis, evaluation, and treatment. Moreover, the regulatory environment moderates the relationship between auditors' proficiency and the risk management process, emphasizing the need for regulatory compliance. These findings offer valuable insights for banks, regulatory bodies, and policymakers to improve risk management strategies. The study also provides a basis for further academic research and contributes to the existing literature on financial auditing and risk management.