INTERNAL AUDIT FUNCTION ON THE FINANCIAL PERFORMANCE OF NIGERIA PUBLIC SECTOR

ABSTRACT The internal audit function plays a vital role in promoting accountability, transparency, and effective financial management in the public sector. In Nigeria, concerns over financial mismanagement, corruption, and inefficient use of public resources have increased attention on the effectiveness of internal audit mechanisms. This study examines the influence of the internal audit function on the financial performance of the Nigerian public sector. Specifically, it explores how internal audit activities contribute to improved financial control, compliance with regulations, risk management, and overall efficiency in the utilization of public funds. The study adopts a descriptive and analytical approach, drawing on relevant literature, government reports, and empirical evidence from public sector institutions. The findings indicate that a strong and independent internal audit function enhances financial performance by detecting and preventing fraud, ensuring adherence to financial regulations, improving internal controls, and promoting prudent resource management. Furthermore, effective internal auditing supports informed decision-making and strengthens public confidence in government institutions. However, the study also identifies several challenges that limit the effectiveness of internal audit functions in the Nigerian public sector, including inadequate funding, shortage of skilled personnel, lack of operational independence, and weak implementation of audit recommendations. These constraints reduce the capacity of internal auditors to perform their duties effectively and diminish their impact on financial performance.The study concludes that strengthening the internal audit function is essential for improving financial performance and governance in Nigeria’s public sector. It recommends enhancing the independence of internal audit units, providing continuous professional training, ensuring adequate resources, and enforcing the implementation of audit recommendations. By addressing these challenges, public sector institutions can achieve greater financial discipline, efficiency, and accountability in the management of public resources. Keywords: Internal audit, financial performance, public sector, accountability, transparency, internal controls, Nigeria.