EFFECT OF INTERNAL AUDITING ON THE FINANCIAL REPORTING CREDIBILITY IN UNIVERSITY OF CROSS RIVER STATE (UNICROSS) NIGERIA: A STUDY OF TWO SELECTED CAMPUSES

Abstract

The study sought to establish the effect of internal auditing on financial reporting credibility in University of Cross River State. The research employed the survey design. The data were analyzed using regression analysis.  A purposive sample size of 69 respondents was selected and used in the study from two multi-campuses of the University of Cross River State. Two research hypotheses were formulated in the null form which states: that internal audit competence does not have significant effect on Financial Reporting Credibility in University of Cross River State; that internal audit independence does not have significant effect on Financial Reporting Credibility in University of Cross River State. The regression test for hypothesis one revealed that internal audit competence has a positive effect on financial reporting credibility, with a positive coefficient of 0.367. The coefficient of 0.367 indicated that internal audit competence increases the financial reporting credibility in University of Cross River State by about 36.7%. The t-statistics value of 6.135>1.96, and a p-value of 0.000 indicated a positive effect of internal audit competence on the university financial reporting credibility at 0.05 level of significance. Thus, the null hypothesis one is rejected. The regression test for hypothesis two revealed that internal audit independence has a positive effect on financial reporting credibility, with a positive coefficient of 0.424. The coefficient of 0.424 indicated that internal audit independence increases the financial reporting credibility in University of Cross River State by about 42.4%. The t-statistics value of 7.815>1.96, and a p-value of 0.000 indicated a positive effect of internal audit independence at 0.05 level of significance. Thus, the null hypothesis two is rejected. The study recommended competent profiling which should be based on what the university expects. That even though internal auditors are part of the management and equally expected to evaluate the activities of entire management, adequate independence should be given to them to function efficiently to the overall performance of the institution because the internal audit system is only as effective as the personnel who implement and perform the controls.