International Journal of Research and Scientific Innovation (IJRSI) | Volume VII, Issue V, May 2020 | ISSN 2321–2705

The Role of Internal Audit and Control on Organizational Objective Achievement

Olukayode Ezekiel Ibironke, Ndubuisi Ikechi Elewor
Department of Accounting, Lagos State University, Ojo, Lagos State, Nigeria

Abstract: – Internal audit and control are geared towards safeguarding the resources of the organization and achieving the organizational objective. The study investigates the role of internal audit and control on organizational objective achievement of selected deposit money banks in Ojo and Amuwo Odofin, Lagos. Organizational objective was measured by revenue and profitability and shareholders’ value. A survey design; primary source of data was used through administration of questionnaires. The study used a sample size of one hundred and sixty (160) staff members in ten (10) banks. The data collected through the distribution of questionnaires was analyzed using the simple regression analysis with the aid of statistical package for social sciences (SPSS). It was discovered that the combined role of internal audit and control has a significant positive influence on revenue and profit generation of the banks. Also, internal audit and control has a positive effect on shareholders’ value of the banks. Conclusively, internal audit and control has a positive effect on organizational objective. The study recommends that banks that seek to achieve it organizational objective with respect to revenue enhancement and profitability should improve in their internal audit functions and control system.

Keywords: Internal auditing, internal control, revenue, profitability and Shareholders’ value.

I. INTRODUCTION

A business organization exists to actualize some certain objectives. A vital condition for the survival of an organization lies on the ability of its members to act unfailingly and efficiently to achieve the objectives of the organization. This objective includes increase in profitability, sales growth; increase in shareholders’ value etc.
An effective internal audit is one of the key elements of good governance. Internal auditor are charged with the responsibility of supporting the organization in the effective discharge of duties, promoting the institution of cost-effective controls, assessing risks as well as recommending actions to mitigate those risks [20]. The internal audit functions provide management and the audit committee with assurance that risk faced by organization are understood and managed properly. It also serves as an internal consultant on many areas of interest. According to [37], the internal audit must evaluate and contribute to the improvement of an organization’s governance process, risk management, etc. Effective internal auditing of banking organizations provides the assurance that public funds are not misused and or mismanaged [14].