The performance of an internal audit department must function in a manner that is in accordance with applicable professional standards such as Standards for the Professional Practice of Internal Auditing (SSPIA 2000) and the quality of the internal control systems. For the purpose of this research the researcher sought to determine the impact of internal audit practices on financial management in Lumala hardware limited. Internal audit was looked at from the perspective of its functionality, relationship with financial management and impact of its practices on financial management. Internal audit suggests that Independence, scope of audit work, audit reporting, audit programs, management of internal audit department, performance of audit work, audit reviews, objectivity are important Internal Auditing practices from the perception of internal Auditors. Performance of the audit work and audit reporting significantly influences the risk assessment of the of the quality of internal control system. From the findings, the respondents indicated that 9 (44%) of the respondents strongly disagreed while 05 (32%) of the respondents disagree with the statement. Also 3 (14%) of the respondents agree and 1 (2%) of the respondents strongly agree with the statement. However, 2 (8%) of the respondents we’re neutral. This implies that the systems of internal controls are not build and operated in Lumala Hardware Limited The study recommends that should ensure that the auditors are Objective in carrying out their work and ensure efficient use of funds and also keep being updated with the changing technology and as well sharpen their skills. This improved on the financial management systems of Lumala Hardware Limited in Entebbe municipality in Wakiso District.