This study investigates the challenges facing the internal audit function of listed companies in Ghana and their impact on overall internal audit performance. An explanatory research design was employed, utilising regression and ANOVA analysis to assess the impact of these challenges on internal audit performance. The sample size was 140, with a response rate of 89.3%. The respondents were Internal Auditors, Finance Officers, Audit Committee Chairpersons, CEOs, and External Auditors. Empirical evidence revealed that the internal audit function’s key challenges were needing more technical skills, insufficient organisational independence, limited cooperation from other functional areas, understaffing, restricted access to evidential records, and irregular professional training. The study establishes significant negative correlations between these challenges and internal audit performance. It was also revealed that deficiencies in technical expertise and organisational independence have the most pronounced negative impact on internal audit performance. The study also highlights the potential for improvement, recommending that companies invest in technical skills development, strengthen organisational independence, promote collaboration and support, and prioritise continuous professional development.