ISSN: 2222-6990
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This study analyzes the effect of risk-based auditing on value-based financial performance of banks listed on the Ghana stock exchange. The study utilized a cross-sectional and quantitative research design. The study population encompasses listed banks in Ghana Stock Exchange (GSE) for the study period spanning thirteen years (2008 to 2020) owing to data availability. The study used a judgemental sampling technique to select nine (9) banks out of thirty-five (35) fully licensed and operational commercial banks in Ghana as per the (Bank of Ghana Report, 2021). Forty-eight (48) respondents were purposively selected for this study comprising of Managing Director, Head of Retail Banking, Head of Operations, Head of Risk Management, Head of Conduct and Compliance, Head, Internal Audit, Head, Financial Control and Strategy, Head of Information Technology, Head of Internal Control, and Head of Treasury. Principal Component Analysis (PCA) was used to identify the principal risk-based audit practices that add value to shareholders. Both linear and multiple regression models were employed to test the relationship between risk-based audit practices (RBAP) and value based financial performance of the listed banks in Ghana. The study established that risk management has a significant positive effect on the value-based financial performance of banks listed on the Ghana Stock Exchange. The study also revealed that annual risk-based planning has a significant positive effect on the value-based financial performance of banks listed on the Ghana Stock Exchange. The study also confirmed that internal audit capacity has a significant positive effect on the value-based financial performance of banks listed on the Ghana Stock Exchange. Lastly, the study found that internal auditing standards have a significant positive effect on the value-based financial performance of banks listed on the Ghana Stock Exchange. As such the null hypothesis that risk base financial audit has a significant positive effect on value-based financial performance was accepted. The study concluded that there was a significant positive relationship between risk based financial audit and value-based financial performance. it is recommended that a similar study be conducted on all financial and non-financial institutions that trade on Ghana Stock Exchange to facilitate comparison and allow for the generalization of findings on the effect of risk-based audits on shareholder value. The research recommends that other researchers should explore more about the influence of non-financial related factors and their implication on shareholder value in the Ghanaian Banking Sector.
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In-Text Citation: (Apreku-Djan et al., 2022)
To Cite this Article: Apreku-Djan, P. K., Ameyaw, F., Ahiale, F. A., Owusu, M., & Apreku, I. K. O. (2022). The Effect of Risk-Based Auditing on Value-Based Financial Performance of Banks in Ghana. International Journal of Academic Research in Business and Social Sciences, 12(5), 903 – 928.
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