Effect of Internal Audit Practices On Aggregate Fiscal Discipline of Government Organisations in Nigeria

International Journal of Research and Innovation in Social Science (IJRISS) | Volume V, Issue VI, June 2021 | ISSN 2454–6186

Effect of Internal Audit Practices On Aggregate Fiscal Discipline of Government Organisations in Nigeria

Isoboye Jacob Damieibi (PhD)
Captain Elechi Amadi Polytechnic, Rumuola, Port Harcourt, Rivers State, Nigeria

Abstract: The study examined the effect of internal audit practices on aggregate fiscal discipline of government organizations in Nigeria. The study achieved these specific objectives and more: determination of the effect of risk assessment on aggregate fiscal discipline of public expenditure management. The population of the study consist of 350 staff in the five surveyed government organizations in Nigeria. The study through the use of Monkey Survey, sampled 310 respondents from Central Bank of Nigeria (CBN), Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA), Niger Delta Development Commission (NDDC) and Nigerian National Petroleum Corporation (NNPC) and validly used 310 respondents representing 89% response rate for data analysis. Risk assessment, Asset safeguard and Auditor’s independence were used as the dimensions of internal audit practices in this study. The study used Aggregate fiscal discipline as both dependent and measurable variable. The study used a questionnaire to elicit information from the respondents. The study applied descriptive and inferential statistical tools to analyze the data and test the hypotheses with the help of SPSS 22.0. The study found that risk assessment has significant effect on aggregate fiscal discipline; asset safeguard has significant effect on aggregate fiscal discipline and auditors’ independence has no significant effect on aggregate fiscal discipline. The study concludes that the use of internal audit instills aggregate fiscal discipline in government organizations’ staff. As government organizations apply asset safeguard it translates to positive and insignificant effect on aggregate fiscal discipline of government organizations. The study therefore recommends that government organizations’ staff should update their knowledge with respect to internal audit practices. Government organizations should encourage auditor independence in order to boost aggregate fiscal discipline in public sector organizations.

Keywords: Internal Audit Practices, Risk Assessment, Asset Safeguard, Auditors’ Independence, Aggregate Fiscal Discipline, Government organizations

I.INTRODUCTION

Organizations’ internal auditors play the role of undertaking an independent examinations and giving assurance on various operations of institutions aimed at enhancing organizational performance every day (Institute of Internal Auditors (IIA, 2010). This enables an organization to meet its operational objectives through well thought-out and dedicated approaches to evaluate and improve on how best to manage risk, institute effective controls and enhance governance. The broad view of internal audit places it more centrally as an important element of public expenditure management that also encompasses management controls and information communication processes (Adedokun, 2014).
Public sector, therefore, sets the economic agenda for the nation. This implies that a robust system of internal checks needs to be put in place to provide assurances that government funds are used for the purposes they were meant (Adedokun, 2014). One major way of achieving this is the institution of internal audit. In the absence of effective internal audit, individuals with questionable character may exploit inherent loop holes to their advantage.

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