The study investigated the level of risk exposure and ascertained the specific roles of internal auditing and risk management process in the public sector of Oyo State. It also examined the effects of internal auditing on project execution in the public sector and further determined the effects of internal auditing on fraud prevention. These were with a view to providing information on how internal audit help in assessing, managing and reducing risk in the public sector. The study used primary data. The population comprised all audit and management staff members of 41 agencies and tertiary institutions in Oyo State. The study purposively selected a total number of six (6) parastatals/corporations and total number of six (6) educational/tertiary institutions with independent internal audit departments.
The results showed that the current level of risk exposure in Oyo state public sector is high, financial (83.84%), operational (67%) and strategic risk (64.2%) and systemic risks (54.5%). The results ascertained specific roles of internal auditing and risk management process such as participation in the identification of emerging risks (F = 5.11, p < 0.05), provision of internal audit reports to improve or implement the risk management process (F = 4.349, p < 0.05) and provision of assurance through written internal audit reports over risk management process (F = 4.194, p < 0.05). The result also showed that internal auditing through its specific roles has significant effect on identification of emerging risks (t = 1.73, p < 0.10) on project execution in the public sector. The result further indicated that increasing the role of internal auditing in risk identification facilitates execution of public projects in the public sector in Oyo State through pre-auditing of all the transactions relating to the projects. The results also showed that presentation of internal audit reports to improve risk management process is also crucial to enhancement of project execution in the study area (t = 1.67, p < 0.10). Results of the determination of effects of internal auditing on fraud prevention showed that internal auditing through identification of emerging risks has a positive and significant (z = 1.79, p < 0.07) effect on fraud prevention. Also, provision of internal audit report through internal auditing exert a positive and significant effect on fraud prevention (z = 2.66, p < 0.05).
The study concluded that the internal audit has significant effect on risk management in the public sector of Oyo State.