International Journal of Innovative Research and Development

Abstract

Internal Audit Function is a significant corporate governance mechanism as it remains the only insider activity by means of which the board through the Audit Committee could have a clear view of what is going on in the company and through which both the board and the audit committee can exercise their oversight functions. To fulfill this role, it is required that there should be a strong interaction between the Internal Audit Function and the Audit Committee. The relationship and interaction between the Audit Committee and the Internal Audit Function has a direct bearing on the effectiveness of the Audit Committee and the quality of financial reporting. This paper examines the degree of interaction between the Internal Audit Function and the Audit Committee in the firms listed on the Nigerian Stock Exchange through a qualitative approach using two-stage interviews: in-depth interviews and follow up interviews of the Heads of Internal Audit Functions in the non-financial listed firms. The results show the existence of strong interaction between the Head of Internal Audit Function and the Audit Committee. We conclude that the Internal Audit Function is an effective corporate governance mechanism in Nigerian listed firms.

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