EVALUATION OF THE IMPACT OF INTERNAL AUDITING ON THE PERFORMANCE OF INSURANCE FIRMS IN NIGERIA

EVALUATION OF THE IMPACT OF INTERNAL AUDITING ON THE PERFORMANCE OF INSURANCE FIRMS IN NIGERIA

Background of the Study

Globally, auditing is an independent review of an economic entity that is established by the management of the firm in order to examine the internal control system and report on its ampleness in terms of validity, economics, effectiveness, and the necessary effectiveness in using resources, tests, assessments, and so on. It is of the utmost importance to guarantee that the utilization of public funds is both economically and appropriately efficient, productive, and serves the best interests of society. According to Saidu (2017), internal auditing is regarded as an important component of effective management in all economic units, and it is required in accordance with auditing instructions. Given the widespread need for accountability in the use of resources, particularly public resources, it is difficult to provide a rational justification for the absence of internal auditing, even in small institutions. Internal auditing is one of the requirements for economic entities to operate efficiently.

Olajide (2015), on the other hand, believes that an internal control system must be built to detect and control the extent to which such legal criteria are met. Many managers attempt to enhance their performance and accomplish corporate goals by relying on the performance of internal auditors. In recent years, commercial failures and economic scandals have focused managers' attention on concerns of preserving, regulating, sustaining, and managing effective economic institutions. Because management is alone responsible for preserving assets, preventing mistakes and exploitation, and uncovering them, this obligation necessitates the implementation of adequate internal controls, including internal auditing. The quality that defines the auditing function is determined by two criteria related to the auditor's performance: the auditor's ability (including knowledge, experience, compliance, and technical performance), and professional performance (including independence, objectivity, professional careers , to measure conflict, interests and judgments). The audit quality structure is multidimensional yet ethereal, making it extremely difficult to assess (Millichamp and Taylor, 2016).  Thus , it can be stated that a system or set of controls, whether financial or non-financial is intended to provide reasonable assurance of the proper functioning or fulfillment of the following.

1 The effectiveness or efficiency of the operations

2 . Reliability of the financial infor ; mation and reporting ;

3. Observance of laws and regulations (domestic and national). Therefore, the administrative department or organization that controls and evaluates the function of the above definition can be defined as internal auditing.

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