Citation:

Stephen Gowon John-Oti. "Evaluating Internal Audit Effectiveness under the Nigerian Code of Corporate Governance (NCCG) 2018" International Research Journal of Economics and Management Studies, Vol. 3, No. 8, pp. 224-237, 2024.

Abstract:

This study examined the extent to which the Nigerian Code of Corporate Governance, 2018 (NCCG 2018) has enhanced the effectiveness of the Internal Audit Function (IAF) among private and public companies in Nigeria. In specific terms, the paper offers meaningful insights into the provisions of the code towards reinforcing the potency of the IAF in addressing the cardinal issues of governance, control and risk management. Particularly, the paper identified and discussed six (6) provisions of the code, namely: appointment and removal of the CAE, Approval of the IAD Charter, Access rights and reporting responsibility of the CAE, Evaluation of the CAE, and preclusion of executive directors from membership of certain Board Committees. Furthermore, the paper has undertaken a critical review of relevant literature to establish the extent to which adoption of the code has redefined and repositioned the IAF towards shaping the corporate destinies of organizations with a view to enhancing effectiveness in control, risk management and governance. The paper also introduces and stresses the principle of best-fit, drawing essence from the comparative advantage theories to underscore the respective roles of the identified major key stakeholders saddled with the monitoring of compliance with the code towards enhancing the effectiveness of the IAF. With the aid of descriptive statistics and the Chi-Square (X2 ), it was revealed that the emergence of the code has significantly enhanced the effectiveness of the IAF for corporate organizations in Nigeria. The study further revealed that the IAF has been leveraged, reinforced and ring-fenced effectively, towards higher levels of independence, objectivity and professionalism by the lofty provisions of the code. It was recommended that the monitoring of compliance with the code from the perspective of the IAF and operations be ramped up and that the Council (FRCN) increase its oversight activities to provide an impetus and stronger bite to the monitoring efforts of sectoral regulators.

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Keywords:

Chief Audit Executive (CAE), Corporate Governance (CG), Effectiveness, Efficiency, Internal Audit, Internal Audit Function (IAF).