国際会計研究ジャーナル

概要

The Role of Internal Auditing In Enhancing Good Corporate Governance Practice in an Organization

Omolaye KE and Jacob RB

Corporate governance has been recognized as an indispensable factor in ensuring sound financial reporting and deterring misappropriations of capital in an organization. The growth of corporate governance has been of immense help to the internal audit function and has raised it to a professional status by emphasizing the benefits of independent judgment and objectivity in reporting. Internal auditing serves as a monitoring device, the organizational policeman and watchdog, thus, an integral component of corporate governance. The aim of this research is to examine the role of internal auditing in enhancing good corporate governance practice in the banking sector in Nigeria with focus on performance and to possibly provide guidance on strengthening the internal audit function in corporate governance. The aim was achieved through a critical review of related literature and the implementation of a survey research using email questionnaires. The study revealed that there exists a significant positive relationship between IAF and performance of banks through operational efficiency, organizational growth, higher profitability; solvency and continuity in business. The key conclusion drawn from this study was that compliance with corporate governance principles (especially IAF) leads to better organizational performance in the banking sector in Nigeria. Based on this it was recommended that the IAF should be continually supported by management and the board audit committee in terms of adequate staffing, training and compensation for effectiveness. Also, considering the position banks occupy in the economy, regulatory authorities in Nigeria should always ensure strict compliance with corporate governance guidelines and principles.