FACTORS INFLUENCING INTERNAL AUDIT PRACTICES AMONG SELECTED CONSUMER GOODS MANUFACTURING FIRMS IN NIGERIA

Abstract

The fundamental component of corporate governance of an organisation, risk management, and control processes is majorly based on internal audit. In a case whereby the internal auditors of an organisation are not independent, there will be a drastic reduction in reporting financial irregularities, and this will lead to poor financial reporting, fraud, and financial misstatements. This study, therefore, examined the factors influencing internal audit practices among selected consumer goods manufacturing firms in Nigeria. The study adopted expose facto research design whereby data were sourced mainly from the audited annual financial reports of selected consumer goods manufacturing companies on the Nigerian Exchange Group for the period 2015 to 2024. The population of the study consists of twenty one (21) consumer goods manufacturing companies in Nigeria as at 2024. The sample size of eight (8) consumer goods manufacturing firms was arrived at using purposive sampling technique whereby consumer goods manufacturing firms which have their annual report and accounts readily accessible for the study period were selected. Analytical techniques in the study consist of both descriptive and inferential statistics. Descriptive statistics were used to describe the study variables while Principal Component Analysis (PCA) was used to identify factors influencing internal audit practices. Findings from the result of PCA on the factors influencing internal audit practices of selected consumer goods manufacturing firms in Nigeria showed that Internal Control System (ICS) had an eigenvalue of (e=2.039), accounting for about 40.78% of the total variance. The study concluded that internal control system is the most factor influencing internal audit practices among selected consumer goods manufacturing firms in Nigeria. It is therefore recommended that firms should prioritize hiring, training, and continuous professional development of their internal auditors.