This article deals with the challenge of internal audit function in Nigeria public sector. Internal audit is a process generally adopted towards ensuring and safeguarding of resources and promoting of operational efficiency in organization. An audit is an independent examination of the financial statements of an organization with a view to forming an opinion as to the truth and fairness of the statements. Before i proceed let me explain brief overview about this topic:
It is generally agreed that finance is the main say of any economy, be it public or private sector. it is equally true that no meaningful development could be achieved without finance and proper management, as a result of this, many organisations establishes difference systems of control or ensure smooth running of their business of which internal auditing is an integral part.
Basically, internal auditing ensures that all activities of the organization are carried out by employees according to laid down procedures. The objective of this article has been to evaluate the internal control system in the Nigerian public sectors, to ascertain the non - implementation of routine audit report and the lack of proper segregation and assignment of duties. in recent times, a combination of forces has led to a quiet revolution in the profession. Government moving towards democracy must demonstrate accountability in the use of public money and efficiency in the delivery of service. In many cases internal control system are weak, staffs are poorly paid making them unmotivated, coupled with non - implementation of routine audit report by appropriate authorities.

The issue of auditing becomes important principally as a result of the separation of ownership from management whether in public or private sector. in the private sector, the separation is between the shareholders on one hand and the Board/Management on the other hand. Shareholders own the resources and the Board/Management utilizes these resources to achieve some agreed predetermined objectives. Whereas, in the public sector it is the separation between the electorates (citizens) of the nation and those elected into various offices either as president, governor or chairman of local government. The arrangement however introduces and emphasizes the issue of agency position of either the board/management or the executive arm of government. Since every agency requires stewardship, management is obliged to periodically give report on how resources entrusted to them have been utilized.


What is Auditing?
Auditing is an independent examination of, and the expression of an opinion on the financial statements of an enterprise by an appointed auditor, in accordance with his terms of engagement and the observance of statutory regulations and professional requirements.
Auditing as a utilitarian discipline emanated as a response to offer credibility to the stewardship and accountability functions of financial accounting and in consequence, financial reporting. It is a systematic investigation and appraisal of transactions procedures, operations and result in financial statements. The auditor should be approved and must have personal and operational independence in order to perform his duty effectively.


Audit are categories into four(4) stages:

Private
Statutory
Management
Internal Audit

even though all the types of audit focus on regulations, which lead to control of expenditure or revenue. internal auditing as “an independent appraisal function within an organisation for the review of system of control and the quality of performance as a service to the organisation.

Internal audit as part of the internal control system put in place by management of an Organization to ensure adherence to stipulated. work procedure and as aid to management for smooth administration, control cost minimization; ensure capacity utilization and maximum benefit derivation.

Objective of Auditing
Internal auditing (IA) serves as an important link in the business and financial reporting processes of corporations and not-for-profit providers. Internal auditors play a key role in monitoring a company’s risk profile and identifying areas to improve risk management. The aim of internal auditing is to improve organizational efficiency and effectiveness through constructive criticism.


Audit findings and recommendations would not serve much purpose unless management is committed to implement them. Adams (1994) used agency theory to explain that it is in the interest of management to maintain a strong internal audit department. Implementation of audit recommendations is highly relevant to audit effectiveness (Van Gansberghe, 2005) and the management of an organization is viewed as the customer receiving internal audit services. As a result, management's commitment to use audit recommendations and its support in strengthening internal audit is vital to audit effectiveness (Sawyer, 1995). Organizational setting refers to the organizational profile, internal organization and budgetary status of the internal audit office; and also the organizational policies and procedures that guide operation of auditors. It provides the context in which internal audit operates. Thus, organizational setting can exert influence on the level of effectiveness that internal audit could achieve.


Management Control in Public Sector
In the eye of Woolf (1986) the public sector is primarily composed of non-profit making organizations. Management control in its broadest context is the means by which an organization carries out its objectives effectively and efficiently. Public sector management can be generally distinguished as having hierarchical structures composed of responsibility centers, units, sections, departments and divisions. Central government department, if changes are made for certain services they are usually nominal and have a little impact on the level of services offered. Autonomous bodies are subjected to high degree of Central government control. Local government authorities receive by far the largest proportion of their funds through the rate support grant or allocation. They can equally raise revenue locally, primarily by levying rates; the extent of their power is strictly monitored by central government. Therefore, the management and control of the public purse is the heart of government administration. The internal audit reports directly to the chief executive, the financial regulations, however, enjoins the chief executive of each ministry to ensure that the accounting and finance functions and internal audit functions are placed under the direct control of suitable competent accountants..


Internal Audit Quality
Internal audit quality, which is demonstrated by the office's capability to provide useful audit findings and recommendations, is one of the most prominent factors on which audit effectiveness is anchored. The performance standards of the IIA (1999) require the auditor to plan and perform the work such that he or she would be able to arrive at useful audit findings and forward recommendations for improvement. The office's ability to properly plan, perform and communicate the results of audits is a proxy for audit quality. Therefore, audit quality is arguably a function of extensive staff expertise; reasonableness of the scope of service; and effective planning, execution and communication of internal audits.



Top Management Support
The management literature offers ample evidence for the key role of top management support in the success of almost all programs and processes within an organization. Fernandez & Rainey (2006) argued, based on a literature review that top management support and commitment to change play a crucial role in organizational renewal, as senior managers can mobilize the critical mass needed to follow through on efforts launched by one or two visionary thinkers. A number of empirical studies have found top management support for quality to be a key factor in its improvement.

AN APPRAISAL OF AUDITORS INDEPENDENCE IN NIGERIA
http://www.bravoprojecthelp.com/accountancy/an-appraisal-of-auditors-independence-in-nigeria/

Implications of Audit and Quality Assurance in Government Establishment Issues, Challenges and Strategies

The benefit of auditing can never be emphasized. Frauds and misappropriation of fund is the bane of the society today and the earlier this situation is arrested, the safer the society at large, when the system of an audit is adequately designed, effectively and efficiently in operation,

http://www.scharticles.com/implications-of-audit-and-quality-assurance-in-government-establishment/

Effects and Remedies of Accounting Fraud in Public Enterprises (A Case Study of Some Selected Public Enterprises Portharcourt)

Contemporary theories in public enterprises shows that the question that assumed prominence in the thought of most management philosophers were usually the major issues related to fraud control in public enterprises. In the word of Okezie (2004), fraud is an intentional misstatement or omissions of some amounts or disclosure  from an entity’s accounting records or financial  statement...

http://www.scharticles.com/effects-and-remedies-of-accounting-fraud-in-public-enterprises/