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Promoting Good Governance through Internal Audit Function (IAF): The Nigerian Experience

Author

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  • Taiwo Olufemi Asaolu
  • Samuel Adebayo Adedokun
  • James Unam Monday

Abstract

The subject of governance has become a pertinent issue for business, government, politics, and the general public. In both the private and the public sectors, there is an increasing demand for good governance in terms of accountability and transparency, and internal audit function within organizations has an important role to play in the achievement of these objectives. This study therefore assessed the effects of internal audit function (IAF) on good governance in the public sector in Nigeria. Primary data was obtained through the administration of structured questionnaire to purposively selected respondents comprising Head of Internal Audit, Director of Finance and Supplies, and Head of Local Government Administration, in 33 public sector organizations in Oyo State, Southwestern Nigeria. A total of 99 respondents participated in the study. IAF was measured by independence of internal audit system, scope of work, professional competence, examination process, and management support, while quality of service, management of public resources measured good governance. Data obtained was analysed using correlation analysis and multiple regression technique. The results showed that the effectiveness of IAF in Nigerian public sector organisations was moderate since internal audit system in the public organisations was not absolutely independent and professional competence was limited due to the challenge of insufficient funds to successfully carry out its duties. Moreover, the study revealed that IAF had significant and positive effect on the quality of service delivery and management of resources in the public organisations. The study concluded that internal Audit function is a veritable tool for promoting good governance in the Nigerian Public Sector. This study therefore recommended that there should be legal mandate in public sector organisations that allows government information to be publicly published and special funds should be made available to internal auditors as it would enhance effectiveness of internal audit function and boost good governance in the organisations.

Suggested Citation

  • Taiwo Olufemi Asaolu & Samuel Adebayo Adedokun & James Unam Monday, 2016. "Promoting Good Governance through Internal Audit Function (IAF): The Nigerian Experience," International Business Research, Canadian Center of Science and Education, vol. 9(5), pages 196-204, May.
  • Handle: RePEc:ibn:ibrjnl:v:9:y:2016:i:5:p:196-204
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    References listed on IDEAS

    as
    1. Aaron Cohen & Gabriel Sayag, 2010. "The Effectiveness of Internal Auditing: An Empirical Examination of its Determinants in Israeli Organisations," Australian Accounting Review, CPA Australia, vol. 20(3), pages 296-307, September.
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    Cited by:

    1. Tunde Olutokunbo, OBAFEMI & Olutunji OPADIJO, 2023. "Internal Audit and Operational Performance in Public Teaching Hospitals in Oyo State Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(4), pages 1446-1458, April.
    2. S.C. Okaro & G.O. Okafor & I.O. Nwanna & I.M. Igbinovia, 2017. "Empowering the Internal Audit Function for Effective Role in Risk Management: A Study of Micro Finance Banks in Anambra State, South East, Nigeria," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 7(3), pages 14-23, July.
    3. Evangelia Pappa & John Filos, 2019. "Benchmarking the Ethics of Internal Auditors: A Comparative Analysis of Private and Public Sector," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 69(1-2), pages 30-44, January-J.

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    More about this item

    Keywords

    internal audit function; good governance; quality of service; management of resources; accountability;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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