Abstract
Appropriate internal audit procedures are necessary for organizational performance to increase effectiveness. The researcher’s goal in this study was to ascertain how internal auditing affected corporate organizations’ performance in Nigeria. Internal auditing was examined in light of internal auditing standards, professional competence, internal controls, and internal audit independence.
The goal of this study was to ascertain how internal auditing affected Viewnet Ent’s organizational performance. Internal auditing standards, professional competence, internal controls, and internal audit independence were all taken into consideration. Since much of the data was quantifiable, descriptive analysis was used to examine it. The study had a total of 60 participants; due to the study’s limited population, the researcher took samples from each target category. Since it was the best method for gathering data, the researcher administered a survey questionnaire to every member of the target group. Data analysis employed descriptive statistics including mean, standard deviation, and frequency distribution. To make the data presentation easier to grasp and analyze, tables and figures were used. According to the study’s findings, internal controls, corporate governance, risk management, and organizational management support all have a favorable impact on internal audit effectiveness. The results of the study also demonstrated that internal audit effectiveness has a direct bearing on business success at the organizational level. According to the study’s analysis, internal audit’s independence, professional competence, internal audit standards, and internal control all had a significant and favorable impact on Viewnet Ent’s organizational performance. In order to improve organizational performance, the study’s last recommendation was that management in Viewnet Ent adopt effective internal audit processes, such as internal auditing standards, independence of internal audit, professional competency, and internal controls.
Keyword- IA standard, Independence of IA, Internal Control, Professional Competency
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study
Internal audit has typically been treated as a straightforward administrative process that consists primarily of verifying papers, calculating assets, and reporting to the board of directors, management, or external auditors. But recently, a number of diverse factors have come together to bring about a quiet revolution in the field. Companies must show accountability for how they spend shareholders’ money and efficiency in providing services. Internal audits are now expected to be highly competent and professional, and organizations must use their limited resources more effectively to reduce and manage risks. Technology has made it possible to collect and analyze data at ever-increasing speeds, so internal audit departmEnt must give businesses sound guidance. Internal auditing differs from company to business, and modernizing internal auditing can be a major job. Organizational changes alone are not sufficient to make the shift from merely guaranteeing compliance with rules and regulations to actually generating added value. Employees at Viewnet Ent are underpaid and unmotivated, the company has insufficient ethical standards, and its governance procedures are ineffective, which results in asset mismanagement (Ramamoorti, 2003).
Therefore, internal audit can be viewed as a combined audit and consulting function with the aim of improving business operations. One of the most reliable tools for evaluating and enhancing organizational performance is a strong internal audit function. Internal auditors are frequently referred to as a business associate and a police officer. While an internal auditor is frequently viewed as an enemy looking for weaknesses as a police officer, they are actually intended to contribute knowledge as a business partner to help an organization achieve its goals (Kagerman, 2015).
The Institute of Internal Auditors’ authoritative guidelines for the professional practice of internal auditing are found in the Professional Practices Framework (PPF). Attribute standards and performance standards split the standards. The performance standards outline the nature of internal auditing and the quality standards against which performance may be judged, whereas the attribute standards address the characteristics of companies and individuals conducting internal audits (Alzeban,2013).
The management audit is the internal audit department’s most crucial one in a corporate setting, therefore the management’s expectations of internal auditing methods can be used to determine whether a practice is effective.
Since it can be easily described, the management will expect the internal auditors to perform their internal auditing practices to a certain level that is in compliance with the Standards for the Professional Practice of Internal Auditors (SPPIA). As a result, compliance with SPPIA is a sign that an internal audit department is effective (Feizizadeh,2012).
Internal audit is a regular component of Viewnet Ent’s internal control systems and its processes for assessing internal capital. As a result, it helps management and the board of directors fulfill their responsibilities in the manner described above (Gramling, 1997).
Although the internal audit department in a Viewnet Ent institution has a particular need for objectivity and impartiality, this does not rule out the possibility that this department could also contribute to advisory and consultancy activity if the independence of analyses and evaluations is guaranteed. A system of activity evaluation has also been implemented by Viewnet Ent; this system complemEnt rather than replaces the internal auditing function of Viewnet Ent. Management and staff analyze their actions and assess the efficacy of the relevant internal control procedures in this formal and written process (Hawkes, 1994).
Viewnet Ent was founded with the following objectives in mind: to provide coastal, international, and inland marine transportation services; to provide freight forwarding and multimodal transportation services; to provide stevedoring, shore handling, dry port, and warehousing services; to provide container terminal services; to develop, manage, and operate ports; and to establish and operate human resource development and training centers in the maritime industry. The business is divided into four segmEnt: shipping, freight forwarding, ports and terminals, and corporate services.
All over the world there is a realization that the IA activity has the potential to provide hitherto unparalleled services to management in the conduct of their duties and responsibilities. This potential has been twisted into a challenge and embodied in the new definition of Internal Auditing from the IIA. Organizations have come to the realization that internal audit is essential in improving management of assets in viewnet Ent leading improved financial performance of Viewnet Ent (IIA, 2013).
1.2 Problem Statement
Recent corporate accounting scandals and the ensuing call for openness and truth in reporting have resulted in two unrelated but logical outcomes. First, the ability to decipher the intricate accounting maneuvers that have obscured financial situation has become essential. Second, corporate governance has changed as a result of public pressure for change and subsequent regulatory action. Company officials and directors are coming under more and more ethical and legal scrutiny. A responsible response to investors’ worries about the financial reporting system is the shared objective of both trends. The implementation of internal audit findings and recommendations, however, has been slack.
Studies found that, in contrast to the aforementioned goals, the Nigerian logistics system is characterized by a subpar logistics management system, a lack of coordination of good transport, a low level of development of logistics infrastructure, and damage and quality deterioration of goods during handling, transporting, and storing (Tilahun,2016)
Others believe that it is too well-known that there are missing coordinates ICT, a lack of competent logistics personnel, a lack of an enabling environment, and a lack of customer satisfaction (Teshome, 2017).
Despite studies on Viewnet Ent’s practices, difficulties, and performance, there aren’t any empirical studies on the impact of internal auditing on Viewnet Ent’s organizational performance. By methodically analyzing the effects of internal audit practice on Viewnet Ent’s organizational performance, our study filled this gap.
1.3 Objectives of the Study
General Objective
The overall objective of this study is to analyze the effects of internal audit practice on organizational performance of Viewnet Ent.
Specific Objectives
The specific objectives are:
- To identify major factors that affect internal audit effectiveness on viewnet.
- To determine the effect of internal audit practices on the organizational performance of Viewnet Ent.
- To show internal audit practices in Viewnet Ent.
1.4 Significance of the Study
The results of the study helped managers and board of directors of the enterprise to understand the internal audit practices and its effect on enterprise’s performance. The study also helps to identify areas of weaknesses to the organization and also provide valuable recommendations.
The findings of the study also provide background information to those researchers who want to conduct future detailed studies on internal audit.
1.5 Scope of the Study
The study examined Viewnet Ent’s internal audit procedures and how they affected business performance. Additionally, all workers (Directors, Division managers, team leaders, and internal auditors) in the shipping, freight forwarding, port and terminal, corporate service, and other sectors were the subject of the investigation.
1.6 Limitation of the study
The study has a number of limitations, including: Some respondents were reluctant to provide information voluntarily due to the sensitive nature of the sector. However, the researcher made an effort to convince them that any information provided by respondEnt was private. Additionally, the study was constrained by the degree of accuracy of the information acquired from each respondent at Viewnet. In an effort to help the respondent provide correct information about the subject, the researcher gave recommendations.
1.7 Organization of the study
The study was organized into five chapters. Chapter one deals with the background of the study, problem statement, objectives of the study, scope of the study and limitations of the study. Chapter two reviewed the relevant literature on internal audit concepts and other related practices. In the next chapter the research methodology that was used in the study was discussed. This includes the research design, type of data and data source and data analysis. The fourth sections of the thesis consist of data analysis, research findings and interpretation of the results. Chapter five provides the findings and conclusions drawn from the data presentation and analysis from which the relevant recommendations were made.
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