The Effect of Risk Based Audit on Financial Performance in the Healthcare Services Sector: A Case Study of Premier Services Medical Investments Private Limited (PSMI)

Abstract

The necessity for a proper risk-based audit, which includes risk management and internal control systems, has been linked to growing concerns about corporate accountability in a number of developed countries (Beekes and Brown, 2018). The subjectivity of this topic has led to varying degrees of internal control and risk management emphasis, which is mirrored in the governance principles of developing nations. In this dynamic environment, healthcare services sector is so much exposed to countless risks within their operations therefore, the study is meant to use theoretical lens to explore the effect of risk-based audit on financial performance in the healthcare services sector. This research provides a detailed insight into the operations of the healthcare services sector and the effects brought by risk-based audit in recent years on financial performance. The research determines the impact of risk-based audit on financial performance in healthcare services in a view to assist healthcare service providers with practical recommendations for fraud prevention through risk-based audit. The information obtained were analysed using probability and non-probability sampling, semi structured questionnaires and interviews in the process of data collection. The study found that inherent risk assessment has a significant impact on the financial performance of the healthcare services sector. Financial performance was impacted by the management's implementation of audit recommendations, risk-based audits, annual plans with the management, timely risk-based audit reporting, and an adequate auditing staff. The study also found that accuracy, completeness, timeliness, convenience, and clarity all contributed to accountability and transparency. According to the findings, the study suggests that management in the healthcare services sector be held accountable for defining effective execution of audit suggestion, risk-based audit annual plans, timely receipt of risk-based audit reports, and enough resources for risk-based audit. Through increased effectiveness, correctness, completeness, timeliness, convenience, and clarity, this would improve transparency and accountability.