Abstract:
There has been a loud call for Corporate Governance for organizations in the public and private sectors,
this call has been even louder in the recent past as a result of major fraud and mismanagement of public
resources that have made news headlines and had major financial implications in our economy. One of
the main component of corporate governance is the internal audit function which should ideally serve to
strengthen Corporate Governance. However, organizations have continued to be run down and collapse
raising concerns as to the role of internal audit in highlighting eminent collapse and mismanagement of
organizations including the Kenya Meat Commission and the East African Portland Cement among other
key players in Machakos County. The objective of this study was to ascertain the effects of the Internal
Audit on corporate governance in State Corporations in the County of Machakos. The specific objectives
were to determine the effectiveness of Risk management, Internal Controls and Compliance in promoting
2corporate governance in state corporations. Data was collected through questionnaires, descriptive
statistics and conceptual content analysis were employed in the data made up of primary data sourced
from Board members, Management and staff. Multivariate regression analysis was used to determine the
relationship between the independent variables and the dependent variable. This analysis was done with
the aid of SPSS, an econometrics software. From the analysis, the study found out that there exists a
strong relationship between Risk management, Internal Controls and Compliance variables with
Corporate Governance in State Corporation in Machakos County with Compliance having the highest
effect, followed by internal controls and Risk management. The study recommends the Government to
emphasize that state corporation abide and Comply with the prescribed laws and regulations, reinforce
and review the internal controls and improve the risk management strategies in place.
