INTERNAL AUDIT PRACTICES AND FINANCIAL PERFORMANCE OF DEPOSITS MONEY BANKS IN NIGERIA

Abstract

Deposit money banks offer a variety of services in addition to safekeeping money and other valuables and making them readily available to the owners who need them. Despite these enormous responsibilities, the sector has been plagued by issues such as financial irregularities, a lack of objective internal audit control, internal auditor independence in relation to reporting channels, insider dealings, and excessive loan losses as they relate to the financial performance of Nigeria's commercial banks. This study, therefore, examine the relationship between internal audit and financial performance of deposits money banks in Nigeria. The study adopted ex-post facto research design whereby data were sourced mainly from the audited annual financial reports of selected Nigerian deposit money banks listed on the floor of Nigerian Exchange Group for the period 2016 to 2023. The population of the study consisted of twenty-four (24) Nigerian deposit money banks listed on the floor of Nigerian Exchange Group as at December, 2023. The sample size of twelve (12) deposit money banks was arrived at using purposive sampling technique whereby deposit money banks which have their annual report and accounts readily accessible for the study period were selected. Analytical techniques used in the study consisted of both descriptive and inferential statistics. The result of Pearson Product Moment Correlation (PPMC) on the relationship that exists between internal audit practices and financial performance of selected deposit money banks in Nigeria showed that internal audit size shows a strong positive correlation with return on asset (r=0.822). The study established a positive significant relationship between internal audit practices and financial performance of deposit money banks in Nigeria. It is therefore recommended that internal auditors should maintain neutrality and avoid personal biases during audits.