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Middle-East Journal of Scientific Research 19 (4): 460-471, 2014ISSN 1990-9233© IDOSI Publications, 2014DOI: 10.5829/idosi.mejsr.2014.19.4.1783

Corresponding Author: Mu’azu Saidu Badara, School of Accountancy, Universiti Utara Malaysia.

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Empirical Evidence of Antecedents ofInternal Audit Effectiveness from Nigerian Perspective

Mu’azu Saidu Badara and Siti Zabedah Saidin

School of Accountancy, Universiti Utara Malaysia

Abstract: The objective of this study is to present the empirical evidence of antecedents of internal auditeffectiveness from the Nigerian perspective. Antecedents here constitute; risk management, effective internalcontrol system, audit experience, cooperation between internal and external auditors and performancemeasurement. Data of the study were collected through research assistant employed, in which 500 questionnairewere sent to internal auditors, audit committee and chairman of local government or their representatives withinthe sampled local government in Nigeria. The study used stratified random sampling, in which samples weredrawn from six geo- political zones in Nigeria; data were analyzed using Statistical Package for Social Science(SPSS) version 21. Descriptive statistic, factor analysis, correlation matrix and finally, multiple regressionanalysis were carried out. The result findings of the analysis revealed that, all antecedents have a significantpositive relationship with internal audit effectiveness. Finally, conclusion was provided and the direction forfuture research was also provided.

Key words: Antecedents Internal audit effectiveness Local government Nigeria

INTRODUCTION with this, [7], [11] and [12] stressed the need for future

Due to the important of internal audit in an internal audit effectiveness and the possible interactionsorganizational setting, especially in regard to among them. Even the conceptual study conducted byorganizational objective achievement, enable various [13] recommends the empirical validation of theseresearchers continues show concerned over it operation. antecedents of internal audit effectiveness.In fact, it’s received much concentration than before [1] At this junction, [14] and [15] recommends thatand this equally makes researchers concerned over its different constructs and variables can be employ towardeffectiveness, due to the fact that organization that has examining internal audit effectiveness, this leads to theeffective internal audit function in place are better than absorption of these variables as antecedents towardthose organization that has not such a function especially examining the internal audit effectiveness as can equallyin regard to fraud detection and prevention [2, 3, 4]. This be applicable in Nigerian context, so that to empiricallyindicate the important of having effective internal audit in display their contribution on internal audit effectivenessplace, because such effective internal audit enable the in Nigeria. These variables are;risk management, effectiveachievement of organizational objective [5], in line with internal control system, audit experience, performancethis, internal audit functions that is well perform, serve as measurement and cooperation between internal andan effective means for monitoring and promoting system external auditors. Each one of them is been taken becauseof good governance in any organization [6, 1]. At this of the future studies recommendation on them. Therefore,point, there is the need to seriously consider the issue of the objective of this study is to display empirical evidencesuch internal audit effectiveness, as even noted that, only of antecedents of internal audit effectiveness from thefew research been conducted on such internal audit Nigerian point of view. Section two of the paper presentseffectivenesswithin the world [7]. the literature review and hypothesis development, section

Various researches have showed that internal audit three provides research methodology, section fourin Nigeria are not effective [8, 9, 10]. And therefore, in line present results and discussion and finally the conclusion.

research to empirically examine the factors that influence

Middle-East J. Sci. Res., 19 (4): 460-471, 2014

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Literature Review and Hypothesis Development and maintenance of good governance within their publicInternal Audit Effectiveness: An operation can be sector organizations [28]. In fact, effective riskregarded as effective only when the result outcome of the management is one of the essential aspects of goodoperation is in line with the established objectives of such corporate governance [22] that is why in recent years,operations [16, 17], at the same time, the issues enterprise risk management has received a wider globalconcerning internal audit effectiveness are necessary concerned [29]. Meaning that, Nigerian governmentbecause it creates improvement in the government should equally consider the issue of risk management asministries [18]. [19] defined internal audit effectiveness one of their priority so that to enable their objective“as the degree (including quality) to which established achievement. As noted that such effective riskobjectives are achieved. Meaning that, internal audit management enables the achievement of organizationaleffectiveness is the ability of the internal auditor to objective [30]. Risk management means the process ofachieve the established objective within such identification of the risk up to the management of suchorganization. As such, the objective needs to be precisely risk in order to allow the achievement of organizationalstated in a comprehensive manner and the resources for objective and to improve internal audit effectiveness.achieving the objective need to be adequately provided Most of the previous studies that have been carriedby such organizations [20]. Effective internal audit is out on risk management focused on the role of internalconsidered as one of the instrument that improve audit in risk management for instance [30, 31, 32]. Onlygovernance structure because of the essentials role play limited studies consider the impact of enterprise riskin assessing the effectiveness of control measures of an management on the internal audit function for exampleorganizations [21, 20] that is why internal audit functions [29]. They ignore to examine the impact of such riskthat is effective can easily improve the effectiveness of an management on internal audit effectivenessorganizational operations and thereby adding value to predominantly within Nigerian context. Some few studiessuch organizations effectively [17]. measured risk management with other variables [33, 28].

In fact, an internal audit function that is adequate has Despite the above studies, [29] recommend that researchthe capability of providing better internal audit work [22]. should examine the relationship between of enterprise riskMore specifically, it brings accounting into order and management and internal audit. Also, [33] observed thatconsistency to the various operations of the organization there is still need for a lot of research to be done on risk[23], that is why [24] noted that,organizations that management, even [34] called for the empirical validationbelongs to government shall equally encourage to have for risk management and internal audit effectivenessan effective internal audit functions within their operation relationshipin different countries using different tool ofin order to support the effectiveness of management, even analysis.Therefore, this study extends the previous by[5] suggested that organizations that have no effective examine the relationship between risk management andinternal audit department should be encouraged to have internal audit effectiveness.such departments in their operations. In this vein, it’s A number of studies shown that risk managementimportant to have effective internal audit in place so that have something to play in internal audit objectiveto enable the objective achievement effectively. Various achievement [29, 31, 35, 32, 33] for instance; [32] affirmedstudies have been conducted on internal audit that risk management facilitates effectiveness andeffectiveness [17, 11, 25, 26, 27, 24, 15, 3, 14, 7, 18]. efficiency in terms of objective achievement. This is lineNevertheless, none of these studies incorporated those with the finding of [29] that enterprise risk managementantecedents in examining the internal audit effectiveness has positive impact on internal audit’s activities in anpredominantly from Nigerian evidence. That is why [13] organization, especially when the organization’semphasizing on the empirical validation of these enterprise risk management process is more effectively inantecedents from different perspective. Therefore, this place. In the same vein, the relevant of the riskstudy extends the previous study through providing the management process outcome can lead to theempirical evidence of internal audit effectiveness from effectiveness of internal audit planning [31], also aNigerian perspective. well-structured risk management methodology when

Risk Management: The future development of a country their objective [35]. Based on above theoreticalcan be ascertained in their effort on risk management presumptions, the following hypothesis is developed.

utilize appropriately can help management in achieving


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H1: Risk management has significant positive relationship H2: Effective internal control systems have significantwith internal audit effectiveness in Nigeria. positive relationship with internal audit effectiveness in

Effective Internal Control System: Effective internalcontrol system has an essential role to play in a firm’s Audit Experience: Audit experience is another essentialsuccess [36]. As such, all government ministries and factor to consider when it comes to internal auditagencies should improve the effectiveness of their effectiveness, because it enables the auditor to provideinternal control system, organization commitment and good audit outcome and thereby enable goodinternal audit function because they improve good recommendation. In recent times, research in the area ofgovernance [37], such effectiveness may provide professional experience in accounting and auditing areinformation to management concerning their achievement increasing [45]. That is why studies on impact of auditoror not of the objectives [36, 38, 39]. In general, the experience on earnings quality has become the targetestablishment of internal control systems ensures study area in the United States [46] even in China,effective functioning of any entity [40]. Therefore, investors comprehend the credibility of earningseffective internal control system is one of the important especially if it is been audited by experienced auditorsfactors to consider when it comes to internal audit [47]. Virtually this should also be an area of research ineffectiveness. Effective internal control system refers to Nigerian context and other developing Nation.the effective control measures established by an Management of an organization usually gives moreorganization with the aim of safeguarding their assets; concern on a judgment of experience group than theensure the reliability of records both financial and inexperience judgments group [48], that why auditors thatnon-financial as well as ensuring compliance with relevant has adequate experience are usually assigned to controlpolicies and procedure that will ensure the achievement of and evaluate different tasks within audit firms [49]. Someorganizational objective. of the recent studies that have been conducted on audit

Some of the recent studies that have been carried out experience [46, 49, 45, 26, 16, 47, 50] did not examine theon effective internal control system [39, 41, 37, 38], these effect of audit experience on internal audit effectiveness.studies did not investigate the relationship between Nevertheless, [50] and [26] recommend that futureeffective internal control systems with internal audit research is needed to conduct research on auditeffectiveness mostly in Nigeria. In this vein, [36], [42], experience, even [51] called for the empirical validation forrecommend that more research in the area of effective audit experience and internal audit effectivenessinternal control system is required, even [43] called for the relationship in different countries using different tool ofempirical validation for effective internal control system analysis. Therefore, this research extends the previousand internal audit effectiveness relationship in different research by empirically examining the relationshipcountries using different tool of analysis. Therefore, this between audit experience and internal audit effectivenessresearch extends the previous research by empirically in Nigeria.examining the relationship between effective internal Several research has postulate that audit experiencecontrol system and internal audit effectiveness in Nigeria. can have impact on the of internal audit issues [5, 28, 45,

Several literature make a presumption that need to 46, 48, 26, 52, 53, 50, 49, 47] for example; auditors withbe validated empirically, that effective internal control more experience have a good comprehension of decisionsystem has impact on the of internal audit activities process and placed greater reliance on the net income[41, 38, 8, 44,14, 39] for example; [8] posit that, the variable [53]. In addition, [5] expressed some of the factorscredibility of internal auditor depends upon the that influence internal audit effectiveness include;effectiveness of internal control system of an experience, training, education and professionalorganization. This is in line withthe results study of [14] qualifications. [52] Found that experience auditors havewhich reveals that, the success of internal auditing is the ability to give more explanations of audit findings.associated with the five elements of internal control Therefore, in view of the above theoretical presumptions,system. Thus, internal control system monitoring could the following hypothesis is developed;influence audit effectiveness [44]. Therefore, based onabove theoretical presumptions, the following hypothesis H3: Audit experience has a positive significantis formulated that. relationship with internal audit effectiveness in Nigeria.

Nigeria.


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Cooperation Between Internal and External Auditors: Performance Measurement: Performance measurementsRecently, studies that focused on the cooperation in internal audit are absolutelyanimportant topic forbetween internal and external audit are more increasing practitioners [62]. Equally, employing a well standard of[54, 55, 56], this was due to the significant influence of performance measures in internal auditing is essential tosuch cooperation between the two auditors on better and the professions of internal audit [63] that is why in thequality auditing. Effective and efficient cooperation recent period, performance measurement receivedbetween the two auditors lead to a higher quality of reasonable consideration in internal auditing [64]. Thisauditing [56], also such cooperation with the external shows that consideration has been reasonably given toauditors provide an opportunity for the internal auditors the issue of performance measure of the internal auditto add value to their organization [57]. The degree of activities, so that to enhance the effectiveness of suchreliance of external auditors on internal auditors’ works is internal audit, this should equally be consider in Nigerianan indication of cooperation between them [58]. context so that to enhance the effectiveness of suchVirtually, the cooperation may lead to internal audit auditors.effectiveness in Nigeria. Cooperation between internal In Nigeria, performance of public servant at all theand external auditors refers to coming together between level of government are measured so that to ensureinternal and external auditors with the aim of achieving efficiency and effectiveness in the government activitiescertain goals. [65]. And well-structured performance measurement

Some of the recent studies that have been carried out system could be used toward improving organizationson cooperation between internal and external audit strategic goals effectively [66]. It’s important to consider[55, 59, 56, 54] did not examine the effect of such performance measurement of internal auditors so that tocooperation between the two auditors on internal audit determine their effectiveness [27]. Even though [67]effectiveness, whereas future research are calling realized that some performance measures are moretoexamine the impact of such cooperation between effective than others. This indicates that performanceinternal and external audit in developing countries measurement varies even in term of effectiveness.because most of the previous researches on this topic Nevertheless, effective performance measures need to bewere based on the developed world [56, 54]. Therefore, taking into consideration so that to improve thethis study extends the previous studies by examining effectiveness of internal audit effectiveness. Some of thesuch relationship in Nigeria. recent studies that have been carried out on performance

Literature has suggested that cooperation between measurement [3, 69, 67, 68, 64, 70, 65] did not examine thethe two auditors has an impact over internal audit influence of performance measurement on internal auditactivities [56, 59, 60, 55, 61, 54, 58, 57]. For instance; [61] effectiveness, in spite that, it would be importance toposit that, it’s important every internal audit staff member conduct a research on performance measurement in theto understand the key role that cooperation plays in the public sector [68], in fact, more research should bedepartment’s effectiveness, in order to improve the conducted on the effect of performance measures foroperations of the organization toward objective internal audit functions [63]. Therefore, in view of theachievement. At the same time, effective cooperation above, this study extends previous studies by examiningbetween internal and external auditors results to a variety the relationship between performance measurement andof enjoyment for both auditors and the clients [55, 60]. internal audit effectiveness in Nigeria.Such cooperation between internal and external audits Mostly, performance measurement are established inlead effective audits [58]; therefore, for internal auditors order to achieve; effectiveness, efficiency, timeliness,to enhance audit effectiveness and efficiency, they productivity, quality and safety [67, 69, 68, 20, 19, 64],should cooperate with external auditors [57]. In view of it’s also confirm that the success of organization dependthe above presumptions, the following hypothesis is on their performance measurement [69]. Performanceformulated that; measurement is an important factor for maintaining

H4: Cooperation between internal and external auditors because were more supported towards efficiency andhas an impact on the internal audit effectiveness in effectiveness of internal audit function [64]. Equally,Nigeria. performance measurement would lead to increase in

effective and high quality of internal audit department [62]


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internal audit effectiveness [25]. Therefore, in view of the collected through research assistant employed so that toabove presumption, the following hypothesis is facilitate quick retrieval of completed researchformulated that; questionnaire and equally to provide high responds rate.

H5: Performance measurement has positive significant fully completed and returned which represent 70%relationship on internal audit effectiveness in Nigeria. responds rate. A response rate of 30% is acceptable for

Contingency Theory: Contingency theory is been employas the underpinning theory for the research due to the Measurement of Research Variablesfact that, the theory is one of those theory that are Dependent Variable: Internal audit effectiveness: Internalrecently been employed in the research area of audit effectiveness is the ability of the internal auditors tomanagement accounting and auditing [70, 69] even achieved established objective of the internal auditthough, the use of theory may have different effect and function within the local government. This variable is theequally it effectiveness depend upon the field that is been dependent variable; the variable is measured by 9 itemsproposed [71]. Nevertheless, contingency theory enables adapted with some modification [77].a researcher to systematically introduce factors to explainor predict expected phenomena [72]. The theory enable Independent Variableshypothesize a conditional relationship between two or Risk Management: Means the process of identification ofmore independent variables with a dependent variable and the risk up to the management of such risk in order tosubject it to an empirical validation [71]. Equally, the allow for the achievement of organizational objective.theory has been employed by previous researchers in The variable is measured with 7 items as adapted withexplaining some of the research variables [33, 36], even some modification [78].with regard to audit effectiveness, the theory has equallyemployed by previous researchers [44], as contingent Effective Internal Control System: Refers to the effectivevariables can also differ [33]. Therefore, this study posit control measures established by an organization with thethat internal audit effectiveness is contingent upon the aim of safeguarding their assets; ensure the reliability ofcontingency variables of; risk management, effective records both financial and non-financial as well asinternal control system, audit experience, cooperation ensuring compliance with relevant policies and procedurebetween internal and external auditors and performance that will ensure the achievement of organizationalmeasurement. objective. This variable is measured with 7 items as

MATERIALS AND METHODS

The data for this study were obtained through a and skills which the auditor obtains as a result in lengthsurvey questionnaire administered to the internal of tenure on the job practice in the auditing professionsauditors, audit committee and chairman or their which enhances his effectiveness. Therefore, this variablerepresentative of various local governments in Nigeria. is measured with 5 items as adapted with someThe population of the study is the entire local government modification [79].in Nigeria. There are 774 local government in Nigeria,based on this population, the sample size is 264 [73], Cooperation Between Internal and External Auditor:to reduce the sample error in order to take care with Refer to the act of coming together between internal andnon-response problem, the sample size has been increase external auditor for the purpose of achievement of certainto 500 [74], it is also recommended that the larger the objectives. This variable is measured with 6 items assample size, the better [75]. The sampling technique was adapted with some modification [55].stratified random sampling, in which the population weredivided into stratum i.e. geo-political zones and this Performance Measurement: Refers to the process ofsampling technique it’s an efficient research sampling determining the extent level of achievement of establishedtechnique because it provides more information on a objective by internal auditor. The variable is measuredgiven sample size [76]. The data were administered and with 5 items as adapted with some modification [63].

Therefore, out of 500 questionnaires distributed 350 were

survey [74].

adapted with some modification [36].

Audit Experience: Refers to different kind of knowledge


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Thus, five -point type rating scale, ranging from strongly school qualification, the result shows that majority of theagree to strongly disagree has been used in measuring the respondents are within diploma/ NCE certificates whichresponses of the entire questions. This is because several represent 47.4%. Majority of the respondents have noresearchers has make used of this scale due to its easier professional certificate as reveals by descriptive statisticfor respondents to understand, hence, responses from result with 78.9%. Finally, the result equally displayed thatfive point scale are probably to be reliable [80, 14, 81]. majority of the respondents have enough workingFace and content validity of the instrument was carried experience as showed in Table 1.0 which represent 32%.out through meeting with the expert on the field in order The correlation analysis of the variables under studyto ensure that those items that contain in the instrument was subjected to a two- tailed test of statisticalactually belong to that particular instrument. The expert significance at two different level; significant (p< 0.01)contacted consisted of Academic Staff in Nigerian and significant (p< 0.05), Table 2 above shows thatInstitutions, Auditor General for Local Government in correlations between all variables under study areNigeria, internal auditors at state and local government in statistically significant at (p< 0.01) and (p< 0.05). It canNigeria, so that to improve the validity of the instrument. also be seen from the same table 2 that the correlation ofTo this end, after taking note on the expert observation, the variables ranges from 0.138 to 0.343. Hence, thea revised version of the instrument was made which result problem of multicollinearity is not there.to some questions were re- worded in order to measure Table 3 above present the empirical evidence on thethe constructs appropriately, so that to enable clear relationship between antecedents and internal auditunderstanding by the potential respondents, which effectiveness, the regression analysis reveals thethereafter administered for pilot study. The reliability of significant of hypothesis 1 that risk management hasthe pilot study was all above 0.7 which indicate the significant effect on internal audit effectiveness in Nigeriareliability of the measurement [74]. The research ( = .207, t = 3.833, p = .000) this is consistent with [29]instrument can be found in the appendix. even with conclusion of [34] and this implies that, for

Method of Data Analysis: The data were analyzed using various local government or various organizations, thereSPSS version 21, hence, descriptive statistic was carried should be well established risk management in place byout, factor analysis was equally carried out so that to such organization. Hence, H1 is supported. Regressionreduce the items into more manageable number [75] in analysis reveals significant effect of effective internalwhich after the factor analysis, the items remain for each control systemon internal audit effectiveness ( = .140,variable certifiedthe requirement of factor analysis, such t = 2.735, p = .007) consistently with the finding of [14]as KMO >0.5, Bartlett’s test of Sphericityp< 0.05 or even with conclusion of [43]. This implies that internalsmaller, communalities >0.5, factor loading above >0.5 audit effectiveness can equally be attained when there is[74], correlation matrix has been carried out and lastly, effective internal control in place. Thus H2 is supported.multiple regression analysis was then conducted in order The result analysis of multiple regressions equallyto determine the relationship between the research reveals a significant relationship between audit experiencevariables. and internal audit effectiveness hypothesis 3 ( = .161,

RESULT AND DISCUSSIONS conclusion of [51] and this implies that, for internal audit

Descriptive Statistic: Table 1.0 present the background effectiveness, audit experience is one of the factor toinformation of the respondents, the result reveals that considered. Hence, H3 is supported.74.6% of the respondents are male while 25.4% of the Hypothesis 4 stated that, there is significant positiverespondents are female; this implies that the male relationship in cooperation between internal and externalrespondents outweigh the female respondents. auditors and internal audit effectiveness in Nigeria. ThisDescriptive statistic result indicates that 27.4% of the hypothesis was supported by multiple regressionsrespondents are within the age of 30 - 35 years old which analysis which reveals ( = .208, t = 4.023, p = .000) this isimplies that the majority of respondents are within the in line with [61] which implies that such cooperationproductive age of the entire population which their between the two auditors has significant effect overresponses can equally be fair. With regard to highest the internal audit effectiveness. Thus H4 is supported.

internal audit to achieved established objective within

t = 3.100, p = .002) this is in line with [28, 48] even with the

within the local government in Nigeria to succeed in audit


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Table 1: Background information of the respondents

Demographic profile Categories Frequency %

Gender: Male 261 74.6Female 89 25.4

Total 350 100.0

Age: Less than 25 years old 8 2.325 years - 30 years old 66 18.930 years - 35 years old 96 27.435 years - 40 years old 81 23.140 years - 45 years old 66 18.9Above 45 years old 33 9.4

Total 350 100.0

Highest school qualification Secondary certificate 14 4.0Certificate 29 8.3Diploma/NCE 166 47.4Degree/HND 120 34.3Masters 21 6.0

Total 350 100.0

Professional qualification ICAN member 5 1.4ANAN member 47 13.4ICPAN member 21 6.0None 276 78.9Others specify 1 .3

Total 350 100.0

Working experience Less than 1 year 5 1.41-5 years 76 21.76-10 years 88 25.111-15 years 69 19.715 years - Above 112 32.0

Total 350 100.0

Table 2: Correlation Matrix

IAE EICS RM PM AE CBIE

Internal Audit Effectiveness (IAE) 1Effective Internal Control System (EICS) .138 1*

Risk Management (RM) .228 .281 1** **

Performance Measurement (PM) .196 .260 .289 1** ** **

Audit Experience (AE) .343 .160 .292 .162 1** ** ** **

Cooperation Btw Internal and External auditors (CBIE) .209 .299 .322 .184 .201 1** ** ** ** **

**. Correlation is significant at the 0.01 level (2-tailed).*. Correlation is significant at the 0.05 level (2-tailed).

Table 3: Multiple Regression Result between Antecedents and Internal Audit Effectiveness

Unstandardized Coefficients Standardized Coefficients Collinearity Statistics------------------------------------ ------------------------------ ------------------------------

Model B Std. Error Beta t Sig. Tolerance VIF

1 (Constant) 2.891 .380 7.612 .000EICS .170 .062 .140 2.735 .007 .923 1.084RM .218 .057 .207 3.833 .000 .837 1.194PM .185 .073 .137 2.551 .011 .845 1.183AE .247 .080 .161 3.100 .002 .908 1.101CBIE .294 .073 .208 4.023 .000 .912 1.097

Dependent Variable: Internal Audit Effectiveness


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Finally, multiple regressions analysis reveals the 4. Corama, P., C. Fergusona and R. Moroney, 2006. Thesignificant relationship between performance value of internal audit in fraud detection. Journal ofmeasurement and internal audit effectiveness ( = .137, Accounting and Finance, 48(4): 543-59.t = 2.551, p = .011) this is in line with [64] which equally 5. Al-Twaijry, A.A.M., J.A. Brierley and D.R. Gwilliam,implies that, measuring the performance of internal 2003. The development of internal audit in Saudiauditors improve their level of effectiveness. Hence, H5 is Arabia: An Institutional Theory perspective.supported. Critical Perspective on Accounting, 14: 507-531.

CONCLUSION 6. Belay, Z., 2007. A Study on effective implementation

This study provided the empirical evidence of governance in the public sector. Presented to theantecedents of internal audit effectiveness from Nigerian “The Achievements, Challenges and Prospects of theperspective. The result analysis of the study reveals the Civil Service Reform program implementation insignificant effect of the entire antecedents on the internal Ethiopia”.Conference Ethiopian Civil Service Collegeaudit effectiveness, which implies that, for local Research, Publication & Consultancy Coordinationgovernment or other public sector to attain the Office.effectiveness of their internal audit, such antecedents 7. Endaya, K.E. and M.M. Hanefah, 2013. Internal auditneed to be given due consideration. Some of the limitation effectiveness: An approach proposition to developof the study includes; collecting data from local the theoretical framework. Research Journal ofgovernment only, the research was based on cross- Finance and Accounting, 4(10): 92-102.sectional and the finding cannot be generalized due to 8. Salawu, R.S. and O. Agbeja, 2007. Auditing anddifferent setting of various local government internal accountability in the public sector. Internationalaudits in different countries. Despite the above limitation, Journal of Applied Economics and Finance,the study contribute to internal audit effectiveness by 1(1): 45-54.providing empirical evidence of those antecedents on 9. Ebimobowei, A. and O.J. Kereotu, 2011. Role Theoryinternal audit effectiveness, which previous studies has and the Concept of Audit Expectation Gap in South-not incorporate such antecedents in examining the South, Nigeria. Current Research Journal of Socialinternal audit effectiveness. Therefore, more research are Sciences, 3(6): 445-452.require to be conducted on internal audit effectiveness 10. Enofe, A.O., C.J. Mgbame, V.E. Osa-Erhabor andparticularly in local government level because literature A.J. Ehiorobo, 2013. The role of internal audit inhas showed limited study and reporting of internal audit effective management in Public sector. Researchwithin the context of local level. There is need for Journal of Finance and Accounting, 4(6): 162-168.theoretical implication for internal audit effectiveness in 11. Chaveerug, A., 2011. The role of accountingthe future studies. information system knowledge on audit

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AppendixSection 1: The following statement described the internal control system in the local government, based on your perception. Please indicate the extent to whichyou agree or disagree with the statement based on the scale below: 1=Strongly Agree (SA); 2= Agree (A); 3= Neutral (NEU); 4= Disagree (DA); 5= StronglyDisagree (SD)A1. Local government councils ensure adherence to the council policies. 1 2 3 4 5A2. Local government council provides good control environment that may assist staff in performing their respective duties. 1 2 3 4 5A3. Local government council carrying out risk assessment activities in order to achieve the local objective. 1 2 3 4 5A4. Segregation of duties is adequately provided among local staff. 1 2 3 4 5A5. Local government assets are properly safeguarded and periodically verified. 1 2 3 4 5A6. Information on relevant procedures is easy accessible by the local staff. 1 2 3 4 5A7. There is proper monitoring of the local government internal control system with the aim of ensuring it effectiveness. 1 2 3 4 5Section 2: The following statement described how local government manages the identified risk. Please indicate the extent to which you agree or disagree withthe statement based on the scale below: 1=Strongly Agree (SA); 2= Agree (A); 3= Neutral (NEU); 4= Disagree (DA); 5= Strongly Disagree (SD)B1. Local government council has an established risk management process in place. 1 2 3 4 5B2. Identification of any kind of risk such as fraud, irregularities or illegal act is easy in the local government. 1 2 3 4 5B3. Effect of any kind of risk identified in the local government is considered in order to manage it. 1 2 3 4 5B4. Current control identification enables the minimization of the effect of risk so identified in the local government. 1 2 3 4 5B5. Evaluation of current control in place improves its effectiveness on risk management in the local government. 1 2 3 4 5B6. There is proper risk management strategy in place which handles the current control weaknesses in the local government. 1 2 3 4 5B7. There are proper monitoring activities on the effective application of the policies and activities related to risk management 1 2 3 4 5Section 3: The following statements assess the experience of internal auditors in the local government. Please indicate the extent to which you agree or disagreewith the statement based on the scale below: 1=Strongly Agree (SA); 2= Agree (A); 3= Neutral (NEU); 4= Disagree (DA); 5= Strongly Disagree (SD)C1. Internal auditors have the required knowledge on the overall activities of the local government. 1 2 3 4 5C2. Internal auditors in the local government have adequate knowledge on current internal audit practices of the profession. 1 2 3 4 5C3. Internal auditors within the local government have professional related training. 1 2 3 4 5C4. The internal auditors possess sufficient skills (i.e. accounting and auditing) that is relevant to the local government activities. 1 2 3 4 5C5. The internal auditors used their technical expertise in the local government where necessary. 1 2 3 4 5Section 4: The following statements assess the cooperation between internal and external auditors in the local government, based on your perception. Pleaseindicate the extent to which you agree or disagree with the statement based on the scale below: 1=Strongly Agree (SA); 2= Agree (A); 3= Neutral (NEU);4= Disagree (DA); 5= Strongly Disagree (SD)D1. Reliance on the local government internal audit is part of the external audit plan. 1 2 3 4 5D2. External auditor evaluates local government internal audit work before they rely on them. 1 2 3 4 5D3. Local government internal auditors meet external auditors on a regular basis in order to discuss progress with the aim of 1 2 3 4 5resolving problemsD4. Internal audit of the local government discuss their audit plan with and external auditors. 1 2 3 4 5D5. Internal audit of the local government communicate with external auditors on their audit findings. 1 2 3 4 5D6. Internal auditors display kind of assurance to external auditor that they comply with relevant professional standard. 1 2 3 4 5Section 5: The following statement described the measurement of internal audit performance in the local government, based on your perception. Please indicatethe extent to which you agree or disagree with the statement based on the scale below: 1=Strongly Agree (SA); 2= Agree (A); 3= Neutral (NEU); 4= Disagree(DA); 5= Strongly Disagree (SD)E1 Local government has an established standard for measuring the performance of internal auditors. 1 2 3 4 5E2 Local government measure the performance of internal auditors regularly. 1 2 3 4 5E3 The performance of local government internal audit is measured on the basis of established objective. 1 2 3 4 5E4 Local government has performance indicators which will enable good performance of internal audit. 1 2 3 4 5E5 Good performance of internal auditors in the local government is rewarded by way of good incentives. 1 2 3 4 5Section 7: The following statement assesses the effectiveness of internal audit in local government level. Please indicate the extent to which you agree ordisagree with the statement based on the scale below: 1=Strongly Agree (SA); 2= Agree (A); 3= Neutral (NEU); 4= Disagree (DA); 5= Strongly Disagree(SD)F1. The local government have a clear objective for internal audit to achieve 1 2 3 4 5F2. Internal audit prepares a suitable audit plan for the execution of such objective. 1 2 3 4 5F3. Resources are provided in order to complete the audit within the right time. 1 2 3 4 5F4. The appointment of internal audit is based on competency. 1 2 3 4 5F5. The local government auditing is conducted based on auditing standard and procedures 1 2 3 4 5F6. Audit findings are sufficiently importance without reasonable doubt. 1 2 3 4 5F7. The audit finding in line with the established objective. 1 2 3 4 5F8. The audit finding brings improvement in the local government. 1 2 3 4 5F9. Local council shows satisfaction with the auditor achievement of stated objectives. 1 2 3 4 5

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