Effect of Auditor Proficiency and Audit Quality on Internal Audit Effectiveness in Nigeria’s Federal Public Service

Aminu Hammayo ,Isah Shittu ,Aliyu Abdullahi

doi:10.7176/rjfa/11-6-01

Abstract

The internal audit function, with clearly defined competence and process requirements, has despite its presence within the operations of federal public sector organizations in Nigeria being unable to check the rising cases of frauds and financial improprieties which have continuously been highlighted against them. Furthermore, sufficient attention has not been given to related control issues regardless of the increasing use of information technology (ICT) in public sector operations. The study investigates the effects of competence; the role of ICT; and the quality of internal audit on internal audit effectiveness in Nigeria’s federal public service which is charged with the responsibility of the management of over half of the public revenues accruing to the Nigerian federation but with particular reference to 28 self-accounting federal public organizations operating in the North East Geo-Political Zone. Primary data was obtained from 139 valid responses out of 148 questionnaires administered on the internal auditors of such organizations. Partial least square structural equation modeling (PLS-SEM) was employed as the technique of data analysis to test the relationships. The finding of this study revealed that competence and the quality of internal audit showed positive and significant influence on internal audit effectiveness. Information and Communication Technology (ICT) however showed positive but insignificant contribution. The study recommends an effective compliance with minimum entry requirements in the employment and deployment of Internal Auditors; a review and continuous improvement of operating regulations and standards; as well as the deployment of appropriate ICT audit tools and continuous training of internal audit staff by the relevant government offices (Offices of the Accountant General and that of the Head of Civil Service of the Federation – OAGF & OHCSF; and the Nigerian Information Technology Development Agency - NITDA). Keywords : Internal Audit Effectiveness, Competence, ICT, Quality of Internal Work, Public Sector DOI: 10.7176/RJFA/11-6-01 Publication date: March 31 st 2020

Highlights

Government auditing, considered as the cornerstone of public sector governance, provides an unbiased, objective assessment of how public resources are responsibly and effectively managed to meet intended results
The study concludes that the competence associated with the internal audit function as reflected in the extent of educational and professional qualification of the internal auditors; their level of experience; and their exposure to continuous training and development is one of the strong determinants in ensuring the effectiveness of the internal audit function in federal public sector organizations
Studies on policies that seek to improve the effectiveness of the internal audit function and public sector governance would be of great importance and the findings will certainly have some implications

Summary

Introduction

Government auditing, considered as the cornerstone of public sector governance, provides an unbiased, objective assessment of how public resources are responsibly and effectively managed to meet intended results. Effective audit practices in the public sector have, become very crucial by ensuring that leaders are held accountable and the credibility and appropriate behavior of officials is promoted (Nwaobia, Ogundajo & Nizonyima, 2016). The public sector within the Nigerian federal structure comprises of the three tiers of government namely the federal government, the thirty-six state governments, and the seven hundred and seventy four local governments which discharge their responsibilities through the operating organs such as the ministries, departments and agencies, corporations and institutions (Omolehinwa & Naiyeju, 2011). Its various organs are empowered to keep detailed records of all receipts and payments; maintain full set of accounts (Federal Treasury Accounting Manual, 2006); and must have in place an internal audit unit (Financial Regulations, 2009)

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