Impact of Internal Audit Practices on the Quality of Financial Reporting In Nigeria's Public Sector

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Authors: ARIYO-EDU, Aminat Arike

Abstract

This study investigates the impact of internal audit practices on the quality of financial reporting in Nigeria's public sector, emphasizing internal audit effectiveness, competence, independence, and objectivity. A sample of 300 respondents from the southwest region of Nigeria was surveyed, and multiple regression analysis was used to assess the association between internal audit practices and various dimensions of financial reporting quality, such as reliability, relevance, timeliness, understandability, and transparency. The results indicate that all the aspects of financial reporting are significantly affected by internal audit techniques. Reliability (R = 0.822, p < 0.05), relevance (R = 0.806, p < 0.05), timeliness (R = 0.840, p < 0.05), understandability (R = 0.815, p < 0.05), and transparency (R = 0.824, p < 0.05) were found to be strongly and positively correlated with internal audit practices. These findings support the importance of efficient internal audit operations in raising the quality of financial reporting and are consistent with the body of research in the field. In conclusion, the study underscores the importance of internal audit practices in improving the reliability, relevance, timeliness, understandability, and transparency of financial reporting in Nigeria's public sector. Furthermore, the study urges the implementation of International Public Sector Accounting Standards (IPSAS) and continuous assessment of internal audit procedures to enhance financial reporting standards in Nigeria's public sector.

Keywords: Internal Audit Practices, Financial Reporting Quality, Public Sector Accountability, Audit Independence, Financial Transparency

2024 - NIJAF - 16 - 202 ARIYO-EDU.pdf

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