Internal Audit and Fund Misappropriation in the Public Sector of Nigeria

Adesewa R Edoumiekumo ,Joseph O Faleti ,Olaladiza P Abah-Marcus ,Promise Nkak ,Harmony Tiemo

doi:10.7176/rjfa/11-16-08

Abstract

The preceding unusual in the financial activities of the government revealed by the auditor-general on the financial health of the country has drawn the attention of the public of the wrongdoing and audit queries observed the audit. The study investigated the roles of internal audit in the misappropriation of public funds. Primary data was our main source of data and structured questionnaire was designed to collate data from the audit and account department of the selected ministries. The descriptive statistics and least square regression analysis was used to test the hypotheses premise. From the analytical output, our study found that Effectiveness of Internal Audit (EIA) is negatively statistical not significant with the misappropriation of funds (MF) in the public sector. On the other hand, Internal Control System (ICS) was positive and statistically significant which implies that an efficient internal control system help to fight against misappropriation of funds in public place. Our study recommended that management and top executives saddle running an entity/managerial function should upgrade the competency of the audit/account department personnel for proper effective internal control Audit system in other to avoid the misappropriation of resources; There should be a good feedback mechanism and whistle blowing system. Keywords: Misappropriation, Internal Audit, Internal Control System, Public Sector DOI: 10.7176/RJFA/11-16-08 Publication date: August 31 st 2020

Highlights

Auditing is the systematic process of cross-examining the financial records and whether the financial statement complies with the relevant accounting standard
Auditing is a basis of good public sector governance by ensuring that the public funds are utilized effectively without biased, and it is the responsibility of the auditor to ensure that government parastatal achieves the accountability, integrity, and public confidence among citizens (Stephen, Kenneth & Jacques, 2012)
The results showed that Effectiveness of Internal Audit (EIA) is negatively statistical not significant with a coefficient of -1.295676 and p-value of 0.1991 with misappropriation (MF), this implies that Effective internal control Audit does not lead to the misappropriation of public funds which accept are hypothesis

Summary

Introduction

Auditing is the systematic process of cross-examining the financial records and whether the financial statement complies with the relevant accounting standard. The auditor examines reports on the economic information linking to the firms in which millions of people have their stake individually or through the state. Auditing is a basis of good public sector governance by ensuring that the public funds are utilized effectively without biased, and it is the responsibility of the auditor to ensure that government parastatal achieves the accountability, integrity, and public confidence among citizens (Stephen, Kenneth & Jacques, 2012). Jocelyn (2003), cited in Badara (2012), viewed internal auditing from the definition of the Institute of Internal Auditors as an independent appraisal function set up within an organization or firm to examine the events that occurred. Auditing has continued to grow with the increasing complexity in the way government funds have been used, and it is expected of the internal auditor to examine the activities and provide reports. The preceding unusual in the financial activities of the government revealed by the auditor-general on the financial health of the country has drawn the attention of the public of the wrongdoing and audit queries observed the audit

Objectives

Methods

Conclusion