Internal Audit Practice and Financial Reporting Quality in the Public Sector

There are concerns about the quality of financial reporting and the internal audit practice employed in both public and private sectors in Nigeria due to persistent financial crime leading to most corporate failure. This ugly trend has placed greater responsibility on financial experts, especially the auditors. Therefore, this study examined the internal audit practice and financial reporting quality in the public sector of Nigeria. A survey approach of a structured questionnaire was used to gather data from the Federal Teaching Hospital Ido Ekiti, Ekiti State Nigeria. Variables employed are Auditor independence, Professional Competence, Auditor integrity, Audit Objectivity, Audit Confidence and financial reporting quality. Regression analysis of OLS was employed and the finding revealed that only audit objectivity has a significant influence on the financial reporting quality, while other variables like independence, integrity, and competence of internal auditor and confidence do not have any positive influence on the financial reporting quality in Nigeria’s public sector. It was therefore, advanced that in the public sector, internal auditors need to maintain neutrality and impartiality in their work, even if complete independence is not possible. The public sector Internal Audit Units should stay updated with operational procedure changes for professional competency.