AUDIT INDEPENDENCE AND EFFECTIVENESS OF INTERNAL CONTROL SYSTEMS IN THE PUBLIC SECTOR IN NIGERIA

Olaoye Festus Oladipupo ()
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Olaoye Festus Oladipupo: Department of Accounting, Ekiti State University

No 15116626, Proceedings of Economics and Finance Conferences from International Institute of Social and Economic Sciences

Abstract: This study examines the effect of audit independence on the effectiveness of internal control systems (ICS) in Nigeria's public sector, focusing on tertiary institutions. It explores how changes in audit standards and regulatory frameworks influence ICS, particularly in Federal Universities, Southwest Nigeria. The research enhances understanding of governance challenges and accountability within this sector. Prior studies have investigated ICS factors like budget allocation and employee training, but few have focused on audit independence in Nigerian tertiary institutions. This paper addresses this gap. A stratified random sampling method was employed, selecting six federal universities in the southwestern region. Secondary data were collected through an ex post facto research design, using audited financial reports from these universities. Long-run results revealed significant positive relationships between ICS and factors such as budget allocation, employee training, organizational structure, audit independence, and management support. However, technology infrastructure showed no significant impact. In the short run, budget allocation negatively affected ICS, while employee training, audit independence, and technology infrastructure had positive effects. The study offers insights for administrators and policymakers by emphasizing tailored governance strategies to improve accountability in tertiary institutions. It also provides practical recommendations for strengthening governance in Nigeria's public sector.

Keywords: Audit Independence; Internal Control Systems (ICS); Audit Standards; Budget Allocation (BAR); Employee Training (ETR) (search for similar items in EconPapers)
JEL-codes: A13 (search for similar items in EconPapers)
Pages: 16 pages
New Economics Papers: this item is included in nep-acc
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Published in Proceedings of the Proceedings of the International Conference on Economics, Finance & Business, London, Nov -0001, pages 74-89

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