AUDIT INDEPENDENCE AND INTERNAL CONTROLS IN PUBLIC UNIVERSITIES: INSIGHTS FROM SOUTHWESTERN NIGERIA

Abstract

This study explores the impact of audit independence on the effectiveness of internal control systems in universities, reflecting practices within Nigeria's public sector. It specifically assesses how changes in audit standards and regulatory frameworks influence internal control systems in selected federal universities in Southwestern Nigeria. Using a stratified random sampling method, the research selected six federal universities to ensure representativeness and geographical diversity. A secondary research approach was employed, utilizing ex post facto methodology to analyze audited financial reports from the selected institutions, providing reliable insights into their financial performance and internal control mechanisms. The findings revealed significant long-term positive correlations between internal control systems (ICS) and various factors, including Budget Allocation (BAR), Employee Training (ETR), Organizational Structure (ORS), Internal Audit Function Independence (IAF), and Management Support (MGS). Conversely, a notable lack of correlation was observed between ICS and Technology Infrastructure (TIF), suggesting the influence of organization-specific contextual variables. In short-term analysis, while Budget Allocation (BAR) negatively affected ICS, Employee Training (ETR), Internal Audit Function Independence (IAF), and Technology Infrastructure (TIF) positively influenced ICS. This study highlights the substantial impact of audit standards and regulatory frameworks on the effectiveness of internal control systems in Nigerian tertiary institutions, emphasizing the need for tailored strategies to address governance challenges and enhance accountability in the sector.