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In today’s environment, there is a high rate of business failure. This problem has devastated the economies of certain countries (both developed and emerging) and continues to nibble away at the economies of others. Most business failures can be traced back to non-functionality or deficiencies in the internal control system (ICS) put in place by management as a result of the absence/failure or deficiencies in internal audit functions, which has caused most external auditors to lose faith in the internal auditors’ work. As a result, this documented research work focuses on the role of internal auditors in the effectiveness of internal control systems in order to investigate internal audit role and significance, internal audit challenges, and possible solutions to address some of those challenges in order to ensure the success, efficiencies, and effectiveness of business management. Nestle Nigeria PIc – Otta branch was picked for consideration in this regard. Questionnaires were used to collect data, and the results from the respondents (Nestle Nigeria PIc personnel) were thoroughly examined. In addition, an interview was done at Gbeke Oyeniyi & Co (a firm that provides internal audit services to companies in Lagos) to determine the situations of other businesses in respect to internal audit difficulties. Some of these issues were mentioned as part of the study findings for this project, and business managers were given ideas on how to overcome them. This research was completed by advising business managers on how to deal with some of the controllable challenges that businesses face in order to ensure business success, continuity, and the restoration of confidence in both immediate and prospective investors, as well as assisting in the restoration of confidence in external auditors as to placing reliance on the work of internal auditors and external auditors.




In today’s world, there has been a high rate of corporate failure, which is mainly due to managerial incompetence in the prevention and detection of fraud and other irregularities. To counteract this issue, business leaders have adopted a number of steps. The establishment of – is one of these measures, among others.

ICS (Internal Control System);

Internal Audit Unit (IAU); Internal Audit Unit (IAU); Internal Audit Unit (IAU);

TQM stands for Total Quality Management.

Creating a team; and

Policies and procedures are examples of organizational control processes.

Internal control systems are viewed as a means of monitoring all other control systems in a company organization, and they are regarded as the most crucial measure to reinforce in order to assure business success.

Internal auditors have been working as an instrument in the hands of management, and through the Internal Audit Unit (IAU), to ensure the effectiveness of the Internal Control System (ICS), as well as the monitoring of all other control measures put in place by management, and the achievement of the organization’s goals and objectives.

Internal auditors, in discharging their responsibilities, are facing some challenges which make their work so rigorous and contribute to the failure of the Internal Control system (lCS) objectives.

Internal auditors face some challenges in carrying out their duties, which make their work more difficult and contribute to the failure of the Internal Control System (lCS) goals and objectives, as well as the overall business organization’s goals and objectives. The following are the issues at hand:

How are internal auditors able to carry out their responsibilities in assuring the effectiveness of the internal control system?

What are the hurdles that internal auditors have in carrying out their responsibilities?

What should be done to solve internal auditors’ issues in assuring business success?

Internal auditors have played a critical role in improving management effectiveness and efficiency, and are thus regarded as the foundation of the Internal Control System.


The failure of internal control systems is the primary cause of most failing businesses. This is frequently due to management’s failure to build a robust Internal Control System, the established Internal Control System’s ineffectiveness, or the lack of granting absolute power to the internal auditor to ensure its effectiveness. This has resulted in a number of organizations having low productivity, poor product quality, low sales, false/unfair account statements, bad business performance, and a slow growth rate, all of which contribute to business collapse. The following are some of the factors that make internal auditors’ job more difficult:

Internal auditor incompetence/negligence; failure to separate the Internal Audit Unit (IAU) from the accounting department

Involvement of internal auditors in fraud
The involvement of management in the fraud
Abuse of authority in the role of godfather
Level of independence of internal auditors
Motivations and compensation of internal auditors


This research will be targeted at identifying the following in order to have a clear definition of direction:

The impact of internal auditors on the efficacy of an organization’s internal control system;

Factors that contribute to internal auditors’ difficulties in doing their tasks;

And one possible solution to internal auditors’ concerns is to ensure the Internal Audit Unit’s (lAU) absolute functionality on the effectiveness of the Internal Control System.


The research questions created as a guide in the course of this research activity are as follows:

Is it necessary for a corporation to hire internal auditors?

ii. Would the lack of internal auditors have an impact on the Internal Control System of the organization?

iii. Is it necessary to strengthen an organization’s internal control system?

iv. Is it necessary to segregate the internal audit department (Internal Audit Unit) from the rest of the organization?

v. Should internal auditors concentrate solely on accounting records and ignore all other aspects of the business?

Should an organization’s internal auditors be independent?

Should management safeguard the independence of internal auditors?

Should an organization’s internal auditors be independent?

Should management safeguard the independence of internal auditors?

viii. What can you say about management’s efforts to ensure the efficacy of internal control systems?

ix. Is it necessary for an organization’s internal auditors to be well-motivated and compensated in order to ensure their complete commitment?

x. Are internal auditors have to be employees of the company?

Should an organization’s internal auditors be professionally certified?


The following statistical hypothesis is established as a research hypothesis in order to lead the production of preliminary answers to the highlighted concerns and challenges faced by internal auditors in assuring the effectiveness of the internal Control System.

• Hypothesis of nullity (Ho)

• Hypothetical Alternatives (HI)

i. Ho – That an organization does not require the services of internal auditors.

Hello – That an organization requires the services of internal auditors.

ii. Ho – That the absence of internal auditors will have no impact on the effectiveness of the Internal Control System (ICS).

Hi – That the lack of internal auditors will have an impact on the efficacy of the Internal Control System (lCS).

iii. Ho – There is no need to improve the Internal Control System.

Hello there – That Internal Control System must be improved.

iv. Ho – That an organization’s internal auditors do not need to be professionally certified.

Hello there – An organization’s internal auditors must be professionally certified.

Internal auditors in an organization should not be independent, according to v. Ho.

Hello, I believe that internal auditors in a company should be independent.

vi. Ho – That management should not put more effort into guaranteeing the efficacy of the internal control system.

Hello there – That management should intensify effort in ensuring Internal Control System effectiveness.

vii. Ho – That management should not ensure internal auditors independence.

Hi – That management should ensure internal auditors independence.


Owners, who are the investors and providers of capital for firms, have experienced a variety of challenges as a result of management inefficiency (ices), which has been a factor in some prospective investors’ decision not to participate in businesses today. Some of these issues are as follows:

Loss of invested funds and requests for funds (money) on liquidation, resulting from total business failure, for which investors may be asked to give more funds in order to settle the company’s debts with its creditors;
Poor growth on capital and ongoing loss of market share due to management ineptitude and other irregularities surrounding business operations; and Non-declaration of/inconsistent dividend payment as a result of poor business performance.

External auditors, whose work entails investigating and forming opinions on the true and fair view of a company’s financial statements, find their scope of work expanded in organizations where internal auditors’ work cannot be relied upon; as a result, such cases will necessitate a very thorough investigation as if the presence of internal auditors is not felt.

In order to provide ways of preventing the occurrence of the above-mentioned challenges, an effort will be made on this research work to assist in restoring confidence in both immediate and prospective investors’ minds on the securities on their business investments, as well as the external auditors’ reliance on internal auditing work.


Internal auditors’ impact on the effectiveness of the Internal Control System (ICS) will be the topic of this research, which will investigate how important internal auditors are in the ICS.

Otta Branch of Nestle Nigeria Plc.

It will also cover the breadth of

Addressing internal auditors’ issues; providing external auditors with tools for relying on internal auditors’ work and the Internal Control System (ICS):
Increasing investor confidence in business executives (management).


One of the biggest issues facing or confronting research work in a developing country like Nigeria is a lack of sufficient data. In most circumstances, the data gathered is not only insufficient, but also highly unreliable.

Another issue that serves as a restraint for this study project is the lack of time. The time required to complete this research task is less than optimal for the topic, and as a result, it will not allow for a thorough analysis of the subject matter, limiting the scope to what can be accomplished within the time frame.

Another disadvantage of this study is the lack of funding, which is the most crucial resource in any research project. A decent and successful research project necessitates a significant financial investment.


There are several terminology and concepts in this research effort whose meanings are not clear in the context of the study, and the meanings of these terms and concepts will be discussed under this topic.

The following are some terms and their definitions:


Auditing: An appointed auditor’s independent examination and expression of opinion on an enterprise’s financial statement in accordance with that appointment and any related statutory obligation.

Enough Control: If management has planned and organized (designed) in a way that offers reasonable assurance that the organization’s risks have been properly handled and that the organization’s goals and objectives will be met efficiently and inexpensively, then adequate control is present.

A board, such as a board of directors, is the governing body of an organization.

An internal audit assignment task or review activity, such as an internal audit, control self-assessment review, fraud examination, or consultation, is referred to as an engagement. An engagement can encompass a variety of duties or activities aimed at achieving a given set of goals.
Finance: This is the activity of supplying funds or money to where and when it is required.
Fraud is defined as any illegal conduct that involves deception, concealment, or a breach of trust. The threat of violence or physical force is not required for these acts. Parties and organizations commit fraud to get money, property, or services; to avoid paying for lost services; or to gain a personal or business advantage.

Government: The board’s collection of methods and structures for informing, directing, managing, and enforcing the law.

• Risk: The chance that an event will occur that will have an influence on the achievement of goals. Risk is categorized into two categories: impact and likelihood.

• Standard: A professional pronouncement issued by the Internal Audit Standards Board that specifies the standards for completing a wide variety of internal audit operations as well as assessing internal audit performance.

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