Internal audit function: a comparison between private and public sector in Nigeria

A. Ahmi,F.H. Rusly,M.H. Mohd Sharif,D. Abdul Kadir,Aidi Ahmi,R.H. Raja Mohd Ali,Y.Y. Abdul Talib,Halimah Nasibah Ahmad,S. Ishak,Abdulkadir Madawaki

doi:10.1051/shsconf/20173401004

A. Ahmi, F.H. Rusly + Show 8 more

Open Access

https://doi.org/10.1051/shsconf/20173401004

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Abstract

This study compares the internal audit functions between private and the public sector. Features examined include hierarchical rank of internal audit function, internal audit transfer, outsourcing of internal audit services and working relationship of internal audit with external auditor. The study is based on a survey of internal audit managers and chief internal auditors in private and public sector entities in Nigeria. The results revealed that there is no much difference in hierarchical rank of internal audit function in both sectors. While the results showed that differences exist in the reporting status between internal audit in the two sectors with private sector internal audit reporting to audit committee and chief executive officer and public sector internal audit reporting to chief executive officer and chief financial officer. Almost a similar amount of work is outsourced, and private sector entities are more likely to outsource than those in public sector. There is slight difference between internal audit activities and interaction with external auditor in the two sectors with private sector more likely to coordinate in the area of access to audit working papers.

Highlights

Over the past two decades, the world has witnessed a series of high profile of corporate collapses, as a result of which has led to various effort to build-up regulatory framework in order to restore investors confidence which internal audit function (IAF) is such a framework within the corporate governance
From the hierarchical rank of IAF, the table shows that 36 internal audit managers in the private sector representing 88 percent indicated that the head of internal audit is located at corporate level compares to 21 respondents representing 78 percent in the public sector
This study examine the similarities and differences of private sector IAF and that of its counterpart in the public sector using data collected from Nigeria companies

Summary

Introduction

Over the past two decades, the world has witnessed a series of high profile of corporate collapses, as a result of which has led to various effort to build-up regulatory framework in order to restore investors confidence which internal audit function (IAF) is such a framework within the corporate governance. The expected benefits of strong IAF arise from the view that an effective internal controls make fraud difficult, make fraud discovery likely, provides value-added assurance services and promote effective organizational governance which could results in better financial reporting process and audit function [1]– [4]. The study extends that of [6], [7] with focus on public sector entities

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