SIGNIFICANCE OF INTERNAL AUDITING ON THE PERFORMANCE OF INSURANCE ORGANIZATION IN NIGERIA
ABstract
The study explored the importance of internal audit to the performance of insurance organizations in Nigeria. It shows how internal audit can help organizations achieve their goals in a sustainable way. In this way, internal audit supports management’s decision-making process.
As internal audit correlates with the performance of insurance companies in Nigeria, this study used a descriptive research design to determine internal audit. The survey design was chosen to generate a variety of respondents’ attitudes, opinions, responses, reactions, and beliefs about the nature of the correlation between internal audit and performance.
From the empirical result, significance (p-value) of 0.046 0.05, the model is not significant.
The study concluded that internal auditing has a significance effect on the performance of insurance organization in Nigeria.
The study has contribute to body of literature by providing empirical evidence on the significance of internal auditing on the performance of insurance organization in Nigeria using the following variables performance of insurance organizations, quality and accuracy of reports , independence of internal audit and expertise of the auditor.
Based on the findings from the study, the study recommended that; Services of professional accounting personnel should be employed; Knowledgeable administrators should occupy administrative positions; Administrators should ensure that duties are discharged in accordance with set standards; There should be regular internal and external audit to check compliance or deviation.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The demands on the internal audit departments of insurance organizations have increased significantly in recent years as technology advances, regulation becomes more rigorous, new risks emerge, and companies seek more business insights. Internal audit plays a crucial role in providing assurance on an organization’s governance, risk management, and control processes to help achieve strategic, operational, and financial objectives while balancing compliance objectives and expectations from regulators. Internal audit departments need to leverage an understanding of insurance industry trends, feedback from leadership, regulatory compliance requirements, and available public information to add value to the organization – to optimize internal audit value.
Insurance organizations’ internal audit departments have more demands than many other organizations, namely because they are providing assurance insight and consultation on risk management to an industry that executes risk management as its business. However, because insurance organizations are operating in an environment of ever-increasing change and regulation, internal audit has vast opportunities to improve and provide value optimization.
The qualitative growth and increasing complexity of service, business and industrial activities, and the pressure from the lack of resources and increased competition to absorb the resources needed by the units in the modern world in recent decades have led the capital owners to be unable to direct the companies and the management of commercial units to be transferred to people other than their owners. The separation of ownership from management, in turn, has increased the need for specialized people who are able to audit financial statements of units with extensive and complex activities (Auditing instructions, No. 95, March 2014). Executive and non-executive directors are responsible for pressures, threats and dangers in order to fulfill their managerial obligations to the owners of capital. In this regard, unlike owners and managers of small institutions, managers of large institutions do not know all the details of their operations. The main reason why managers of large institutions do not know the details of the problem is the presence of a large number of employees, different departments, different operations and different stages of production and products in such institutions.
1.2 Problem Description
Many insurers do not recognize the importance of internal audit and take its implementation for granted. This is reflected in reports of fraud and embezzlement in the insurance parts industry. Baba (2010) states that in the Nigerian banking industry, internal audit has a significant impact on management and fraud can significantly reduce organizational efficiency. As one of his recommendations, researchers suggested the need for effective internal auditing in the banking industry. A scrutiny of the existing literature reveals that few researchers have examined the role of internal audit in fraud prevention, especially in the Nigerian insurance subsector. This study fills this gap in the literature by examining the effectiveness of internal audit and its role in fraud prevention in insurance companies. 1.3 Research Goals
Me. Find out how report quality and accuracy impacts the performance of insurance organizations in Nigeria.
ii. Know how independence from internal audit can improve the performance of insurance organizations.
iii. Know how the auditor’s expertise affects the performance of the insurance organization.
1.4 Research question
Me. Will the quality and accuracy of reports impact the performance of insurance organizations in Nigeria?
ii. To what extent does internal audit independence improve the performance of insurance organizations? iii. To what extent does the auditor’s expertise affect the performance of the insurance organization?
1.5 Research hypothesis
Ho1:
There is no significant relationship between report frequency and accuracy affecting the performance of insurance organizations in Nigeria.
Ho2:
There is no significant correlation between internal audit independence and insurance organization performance.
Ho3:
There is no significant correlation between auditor expertise and insurance organization performance. 1.6 Validity of research
This study contributes to the literature by providing empirical evidence on the importance of internal audit to the performance of insurance organizations in Nigeria using the following variables: insurance organization performance, report quality and accuracy. independence, internal audit independence, and expertise reviewers.
As a result, we have achieved the following goals:
The quality and accuracy of reports impacts the performance of insurance organizations in Nigeria. Internal audit independence improves the performance of insurance organizations and analyzes how the expertise of auditors affects the performance of insurance organizations.
1.7 Scope of investigation
The study explored the importance of internal audit to the performance of insurance organizations in Nigeria.
1.8 Definition of terms
Me. Internal hearing:
It is an independent and objective audit and advisory activity designed to add value and improve an organization’s operations. ii.Performance:
Contains the actual performance or results of an organization measured against intended performance.
iii. insurance agency:
These are organizations that provide insurance in the form of compensation for loss, damage, injury, medical treatment or hardship in return for premium payments.
IV. insurance:
This is a safeguard against financial loss.
v. Organization:
Individuals or groups working together to pursue the same commercial interest.
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