Independence and Management Support: The Advocate for Internal Auditors' Task Performance in Tertiary Institutions
Tertiary institutions in Nigeria are bedevilled with many financial irregularities and deficiencies that make the existence and the task performance (TP) of the internal auditors in the institutions questionable. This study, therefore, empirically examines the influence of independence (IND) and management support (MS) on the TP of internal auditors in the South-West tertiary institutions in Nigeria. The study formulates and tests two hypotheses in respect of the relationship between IND and TP in one hand, and MS and TP on the other hand. This study employs a quantitative approach, cross-sectional design, and survey questionnaire in obtaining data from 350 internal auditors in the internal audit departments/units of the universities, polytechnics, and colleges of education in South-West Nigeria. The study records a response rate of sixty percent (60%). Data are analysed using Statistical Packages for Social Sciences (IBM SPSS) version 22.0, and Partial Least Squares-Structural Equation Modeling (PLS-SEM), version 2.0. The results of the PLS-SEM algorithm and bootstrapping reveal positive significant relationships between IND and TP, and the MS and TP, hence, the two hypotheses are supported. This study is significant and has practical and theoretical implications. It has a policy implication on the government or private proprietors who are owners of tertiary institutions; management and Council who control the institutions, internal auditors who are operators of internal auditing; regulatory authorities that perform oversight function on the institutions, and professional accounting and auditing bodies. The study adds to the body of literature and extends internal audit research to tertiary institutions.
Abu-Azza, W. (2012). Perceived effectiveness of the Internal Audit function in Libya: A qualitative study using Institutional and Marxist theories. PhD thesis submitted to the University of Southern Queensland.
Achua, J. K., & Alabar, T. T. (2014). Imperatives of marketing internal auditing in Nigerian universities. Procedia-Social and Behavioural Sciences, I64:32-40
Adetoso, J. A., Oladejo, K. S., & Akesinro, A. S. (2013). Effectiveness of internal auditors in controlling fraud and financial irregularities in private universities in South-West, Nigeria. Research Journal of Finance and Accounting, 4(13).
Akpomi, M. E., Ugodulunwa, C. A., & Nnadi, M. A. (2005). Strategies for fraud detection and minimization in Nigerian tertiary educational institutions. Journal of Financial Management and Analysis, 18(1).
Algeru, O. I. A. (2011). Perception and evaluation of internal audit in Libyan oil and gas companies. A thesis submitted to the University of Gloucestershire.
Ali, A., Saidin, S. Z., Sahdan, M. H., Rasit, M. H. H., Rahim, M. S., Gloeck, J. D. (2012). Internal Audit in the federal government organizations of Malaysia: The good, the bad and the very ugly? Asian Journal of Business and Governance, 2.
Al-Twaijry, A. A. M., Brierley, J. A., & Gwilliam, D. R. (2003). The development of Internal audit in Saudi Arabia: an institutional theory perspective. Critical Perspective in Accounting, 14(5).
Alzeban, A., & Gwilliam, D. (2014). Factors affecting the internal audit effectiveness: A survey of the Saudi public sector. Journal of International Accounting, Auditing and Taxation, 23, 74-86.
Association of National Accountants of Nigeria (ANAN). (2014). Handbook of the code of ethics for professional accountants.
Auditor-General for the Federation of Nigeria (2016). Annual Report of the Auditor-General for the Federation on the accounts of the Federation of Nigeria for the year ended 31st December 2014.
Auditor-General for the Federation of Nigeria (2015). Annual Report of the Auditor-General for the Federation on the accounts of the Federation of Nigeria for the year ended 31st December 2013.
Auditor-General for the Federation of Nigeria (2013). Annual Report of the Auditor-General for the Federation on the accounts of the Federation of Nigeria for the year ended 31st December 2012.
Auditor-General for the Federation of Nigeria (2009). Report of the Auditor-General for the Federation to the national assembly on the accounts of the Federation for the year ended 31st December 2007.
Arena, M., & Azzone, G. (2009). Identifying organizational drivers of internal Audit effectiveness. International Journal of Auditing, 13, 43-60.
Baharud-din, Z., Shokiyah, A., & Ibrahim, M. S. (2014). Factors that Contribute to the Effectiveness of Internal Audit in Public Sector. International Proceedings of Economics Development and Research, 70: 126-132.
Bueno, S., & Gallego, M. D. (2017). Managing top management support in complex information systems projects: An end-user empirical study. Journal of Systems and Information Technology, 19(1/2), 151-164.
Cavana, R. Y., Delahaye, B. l., & Sekaran. U. (2001). Applied business research: qualitative and quantitative methods. Australia: John Wiley & Sons Ltd.
Chambers, A. D., & Odar, M. (2015). A new vision for internal audit. Managerial Auditing Journal, 30(1): 34-55.
Christopher, J. (2014). Internal audit: Does it enhance governance in the Australian Public university sector? Educational Management Administration and Leadership: 1-18.
Christopher, J., Sarens, G., & Leung, P. (2009). A critical analysis of the independence of the internal audit function: evidence from Australia. Accounting, Auditing &Accountability Journal, 22(2), 200-220.
Cohen, A., & Sayag, G. (2010). The effectiveness of internal auditing: An empirical examination of its determinants in Israeli organizations. Australian Accounting Review, 20 (3):54.
Committee of Heads of Internal Audit Departments/Units in Nigerian Universities (CHIADINU). (2007). A manual of uniform internal audit system for Nigerian universities.
Dong, L. (2008). Exploring the impact of top management support of enterprise systems implementations outcomes: Two cases. Business Process Management Journal, 14(2), 204-218.
Ebaid, I. E. (2011). Internal Audit function: an exploratory study from Egyptian listed firms. International Journal of Law and Management, 53(2): 108-128.
Enofe, A. O., Mgbame, C. J., Osa-Erhabor, V. E., & Ehiorobo, A. J. (2013). The role of Internal audit in effective management in public sector. Research Journal of Finance and Accounting, 4(6).
Federal Republic of Nigeria. (2009). Federal Government Financial Regulations. Federal Republic of Nigeria.
Federal Ministry of Education. (2015). Tertiary education. Retrieved from http://www.education.gov.ng/index.php/department/tertiary-education
Feng, T., & Zhao, G. (2014). Top management support, inter-organizational relationships and external involvement. Industrial Management & Data Systems, 114(4), 526-549.
Garson, D. (2016). Partial least squares: Regression and structural equation model. G. David Garson and Statistical Associates Publishing
Hair Jr, J. F., & Hult, G. T. M. (2017). A primer on partial least squares structural equation modeling (PLS-SEM). Sage Publications.
Hair Jr, J. F., Hult, G. T. M., Ringle, C., & Sarstedt, M. (2014a). A primer on partial least squares structural equation modelling (PLS-SEM). Sage Publications.
Hair Jr, J. F., Sarstedt, M., Hopkins, L., & G. Kuppelwieser, V. (2014b). Partial least squares structural equation modelling (PLS-SEM) An emerging tool in business research. European Business Review, 26(2), 106-121
Hair, J. F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing Theory and Practice, 19(2), 139-152.
Hass, S., Abdolmohammadi, M. J., & Burnaby, P. (2006). The Americas literature review on internal auditing. Managerial Auditing Journal, 21(8):835-844
Ifinedo, P. (2008). Impacts of business vision, top management support, and external expertise on ERP success. Business Process Management Journal, 14(4), 551-568.
Institute of Chartered Accountants of Nigeria. (2009). Professional Code of Conduct and Guide for Members.
Institute of Internal Auditors (2012). Supplemental Guidance: The role of auditing in the Public sector. Institute of internal auditors.
International Federation of Accountants (2014). Handbook of the Code of Ethics for Professional Accountants.
Islam, Z., Doshi, J. A., Mahtab, H., & Ariffin Ahmad, Z. (2009). Team learning, top management support and new product development success. International Journal of Managing Projects in Business, 2(2), 238-260.
ISPPIA. (2012). International Standards for the Professional Practice of Internal Auditing (Standards). The Institute of Internal Auditors.
Khosravi, H. (2012). Auditors and Effective Communication Skills. International Journal of Government Auditing.
Kothari, C. R. (2004). Research Methodology: Methods and techniques. New DelhiNew: Age International.
Kumar, R. (2011). Research Methodology: A step-by-step guide for beginners. SAGE Publications Ltd
Krejcie, R. V., & Morgan, D. W. (1970). Determining sample size for research activities. Educational and Psychological Measurement, 30: 607-610.
Ma’Ayan, Y., & Carmeli, A. (2015). Internal Audits as a Source of Ethical Behavior, Efficiency, and Effectiveness in Work Units. Journal of Business Ethics, 1-17.
Mebratu, A. A. (2015). Internal Audit function and its challenges in public sector governance: Empirical evidence from Amhara National Regional State Ethiopia. AshEse Journal of Economics, 1(1): 001-012.
Meenyinikor, C. D. J., Timi-Johnson, T. C., & Chux-Nyeche, G. C. (2014). Managing Nigerian tertiary educational institutions: a panacea for national security. International Journal of Education Learning and Development, 2 (1): 17-33.
Meyers, L. S., Gamst, G., & Guarino, A. J. (2013). Applied multivariate research: Design and interpretation. Sage.
Mihret, D. G., James, K., & Mula, J. M. (2010). Antecedents and organizational performance implications of internal audit effectiveness: some propositions and research agenda. Pacific Accounting Review, 22(3): 224 252.
Mihret, D. G., & Yismaw, A. W. (2007). Internal Audit effectiveness: an Ethiopian public sector case study. Managerial Auditing Journal, 22(5): 470-484
National Board for Technical Education (NBTE). (2015). List of institutions with contact addresses under the purview of NBTE.
National Commission for Colleges of Education (NCCE). (2015). List of Colleges of Education in Nigeria.
National Universities Commission (NUC). (2015). Nigerian Universities. Retrieved from http://nuc.edu.ng/nigerian-univerisities/federal-univeristies/
Nigerian Standards on Auditing (NSA). (2013). Using the work of Internal Auditors. The Institute of Chartered Accountants of Nigeria.
Okoye, A. E. (1998). The quest for proper accountability in the Nigerian Universities and its implications for independence and security of internal Auditor: An overview. The Nigerian Journal of Management Research.
Oyewumi, H. K., Ayoib, B. C., & Popoola, O. M. J. (2017). Internal auditors’ independence and objectivity: regulatory and statutory neglect. International Journal of Economics, Commerce and Management, V(9), 410-423.
Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., & Podsakoff, N. P. (2003). Common method biases in behavioural research: a critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879.
Popoola, O. M. J. (2014). Forensic Accountants, Auditors and Fraud: Capability and competence requirements in the Nigerian public sector. PhD thesis submitted to the Othman Yeop Abdullah Graduate School of Business, Universiti Utara Malaysia
Public Sector Internal Audit Standards (2012). Public sector internal Audit Standards. Applying the IIA International Standards to UK public sector.
Salehi, T. (2016). Investigation Factors Affecting the Effectiveness of Internal Auditors in the Company: Case Study Iran. Review of European Studies, 8(2), 224.
Sarstedt, M., Hair, J. F., Ringle, C. M., Thiele, K. O., & Gudergan, S. P. (2016). Estimation issues with PLS and CBSEM: Where the bias lies! Journal of Business Research, 69(10), 3998-4010.
Sawyer, L. B. (1995). An internal audit philosophy. The Internal Auditor, 52(4).
Sekaran, U. (2003). Research methods for business: A skill building approach. John Wiley & Sons.
Soh, D. S. B., & Martinov-Bennie, N. (2011). The internal audit function perceptions of internal audit roles, effectiveness and evaluation. Managerial Auditing Journal, 26(7): 605-622.
Tabachnick, B. G., & Fidell, L. S. (2007). Using multivariate statistics (5th ed.). Pearson.
Tapang, A. T., Bessong, P. K., & Ujah, P. I. (2015). Management influence and auditor’s independence in Nigerian banks. International Journal of Economics, Commerce and Management, III (4).
Unegbu, A. O., & Kida, M. I. (2011). Effectiveness of internal audit as an instrument of improving public sector management. Journal of Emerging Trends in Economics and Management Sciences, 2(4): 304-309.
Worley, J. M., & Doolen, T. L. (2006). The role of communication and management support in a lean manufacturing implementation. Management Decision, 44(2), 228-245.
Vinzi, V. E., Chin, W. W., Henseler, J., & Wang, H. (Eds.). (2010). Handbook of partial least squares: Concepts, methods and applications. Springer Science & Business Media.
Yee, C. S., Sujan, A., & James, K. (2007). The perceptions of Singaporean manger Class regarding the role and effectiveness of internal audit in Singapore.
Zakaria, Z., Selvaraj, S. D., & Zakari, Z. (2006). Internal Auditors: their role in the Institutions of higher education in Malaysia. Managerial Auditing Journal, 21(9): 892-904.
Copyright (c) 2017 Indian-Pacific Journal of Accounting and Finance
This work is licensed under a Creative Commons Attribution 4.0 International License.
Copyright of all articles published in the Indian Pacific Journal of Accounting and Finance (IPJAF) belongs to their respective authors. Site users are permitted to download and print the articles for personal use. Further reproduction and/or distribution is not permitted, except for brief excerpts or quotations intended for inclusion in some other original works. In this case, proper attribution must be made to the author/copyright holder, and the place of publication must be acknowledged. Altering, editing or otherwise modifying the content of information obtained from the Indian Pacific Journal of Accounting and Finance (IPJAF) is a breach of copyright.
While you retain the copyright of your original material, by publishing in the Indian Pacific Journal of Accounting and Finance (IPJAF) , you will have agreed to the following contractual terms:
- The article is the original work of the stated author(s).
- The work has not been published previously.
- If the Article contains copyright material owned by others, written permission has been obtained from the copyright owner(s) to republish such material in any print or electronic medium and that you have included appropriate acknowledgement of such rights in the Article.
- The author agrees to grant a non-exclusive license to the Indian Pacific Journal of Accounting and Finance (IPJAF) to communicate the work to the public.
- The Indian Pacific Journal of Accounting and Finance (IPJAF) may use the article for publicity purposes.
- The Indian Pacific Journal of Accounting and Finance (IPJAF) may publish the article on third-party sites.
- Any subsequent publication of the article by the authors will carry the acknowledgement: First published in the Indian Pacific Journal of Accounting and Finance (IPJAF) [http://ipjaf.omjpalpha.com]
The Indian Pacific Journal of Accounting and Finance (IPJAF) has taken all reasonable measures to ensure that material contained in this website is the original work of the author(s). However, the Journal gives no warranty and accepts no responsibility for the accuracy or the completeness of the material; no reliance should be made by any user on the material. The user should check with the authors for confirmation.
Articles published in the Indian Pacific Journal of Accounting and Finance (IPJAF) do not represent the views held by the editors and members of the editorial board. Authors are responsible for all aspects of their articles except the editorial screen design.