ASSESSMENT OF IMPACT OF INTERNAL AUDIT FUNCTION ON THE PERFORMANCE OF SMALL AND MEDIUM SCALE INDUSTRIES

ABSTRACT

Small and Medium Scale Enterprises has been facing a lot of challenges in Nigeria. This study is set to examine the impact of internal audit functions on the performance of small and medium scales enterprises in Nigeria with Edo State in focus. The specific objectives are to examine how internal audit functions will safeguard the assets, impacts on profitability and prevent or detect fraud in SMEs operating in Edo State. Survey research design was adopted and a sample of 400 questionnaires was distributed to SMEs operating in all the local government areas in Edo State. Simple percentages, tables was used to analyze the data while chi-square was used to test the hypothesis. The outcome of the findings shows that there is significant positive relationship between internal audit functions and performance of small and medium scale enterprises in Nigeria in terms of their profitability, safeguarding their assets and prevention of fraud. The study therefore recommend that government should training of SME operators’ highlighting the need for them to have internal audit in their organizations. Accounting Professional Bodies should also take interest in building SMEs by conducting regular training on audit staff of the SME operators to build their capacity to meet the present day challenges.