IMPACT OF INTERNAL AUDIT EFFICIENCY ON THE FINANCIAL PERFORMANCE

ABSTRACT

This study which focused on the “impact of internal audit efficiency on the financial performance of listed deposit money banks in Nigeria” was prompted as a result of inability of audit to prevent the occurrence of fraud and material misstatement in the bank’s financial reports. Thus, this study is aimed at assessing the effect of internal audit efficiency on the financial performance of selected banks in Nigeria. Specifically, the study examined the effect of internal audit size on return on asset of Nigerian banks; determined the extent internal audit independence affect return on equity of Nigerian banks and ascertained the effect of internal audit on the profit margin of Nigerian banks. Three research questions and hypotheses were formulated in line with the objectives of this study. The population of the study consists of ten deposit money banks quoted on the Nigerian Stock Exchange. Data for the study were extracted through the financial statement of the banks ix from 2016 to 2020 and was tested with regression statistical tool using the Scientific Package for Social Sciences (SPSS) Version 20. Based on the data analyzed, the study found that firm size has significant effects on return on assets of quoted Nigerian banks; also that internal audit independent has significant affect return on equity of quoted Nigerian banks. Another finding is that internal audit size has significantly affects profit margin of quoted Nigerian banks. Based on this, the study recommended among others that companies should make use of the services of audit firms with unquestionable track records of internal audit efficiency and reputation; hence the debate on internal audit efficiency is not a settled matter.