AN ASSESSMENT OF THE IMPACT OF INTERNAL AUDITOR INDEPENDENCE ON THE EFFICIENCY OF PUBLIC SERVICE DELIVERY IN OSUN STATE

CHAPTER ONE INTRODUCTION 1.1 Background of the Study Internal auditing is a vital function within any organization, regardless of the sector, as it involves an independent evaluation and verification of an entity’s accounts, vouchers, books, and statutory records. The goal of this process is to provide a true and fair representation of the financial statements and non-financial disclosures, thus reflecting the actual position and condition of the organization (Wood, 2021). Moreover, internal audit practices are designed to ensure that all financial documentation and bookkeeping practices comply with relevant legal requirements, such as regulatory standards, tax obligations, and other statutory expectations (Sawyer, 2021). Within the public sector, the role of internal auditors is particularly significant in upholding the integrity of financial management systems, optimizing operational efficiency, and improving the overall quality of public service delivery. Internal auditing acts as a fundamental tool in protecting public resources, ensuring adherence to laws and regulations, and fostering accountability and transparency in governmental bodies (Institute of Internal Auditors, 2016). However, the ability of internal auditing to achieve these objectives largely hinges on the level of independence afforded to internal auditors. Independence is essential because it enables auditors to carry out objective assessments and issue recommendations that are not subject to undue influence from management or other stakeholders (Alzeban & Gwilliam, 2014). Over time, numerous scholarly investigations have underscored the critical role of auditor independence in enhancing the effectiveness of audit functions. For example, Alzeban and Sawan (2015) noted that internal auditors who operate independently are more inclined to identify and report irregularities, as well as propose corrective measures, thereby improving the performance and accountability of public institutions. Conversely, when auditors operate without adequate independence, their capacity to conduct impartial evaluations is significantly weakened, often resulting in biased reports and ineffective audit outcomes (Cohen & Sayag, 2020). A lack of independence may stem from factors such as organizational hierarchy, audit reporting structures, and managerial influence over audit activities. In the public sector, which is often governed by complex and rigid administrative frameworks, ensuring the independence of internal auditors has been a persistent challenge. In many instances, internal auditors report directly to top-level management or institutional heads, thus creating potential conflicts of interest. These hierarchical reporting relationships can severely constrain the auditor's ability to carry out thorough and objective audits—particularly when audit findings might reflect poorly on senior officials (Christopher, Sarens, & Leung, 2019). Such compromised arrangements not only diminish the credibility of internal audits but also weaken the broader governance mechanisms of public institutions. Additionally, the independence of internal auditors in the public sector is influenced by external contextual factors, including political interference and the legislative framework governing public sector auditing. In environments where political manipulation of public institutions is widespread, internal auditors face heightened challenges in maintaining their objectivity. For instance, Mihret and Yismaw (2017) highlighted how internal audit effectiveness in Ethiopia’s public sector was significantly impaired by the lack of auditor independence, mainly due to political pressures and managerial influence. The ramifications of diminished auditor independence are particularly severe in relation to public service delivery. Ineffective audits can perpetuate administrative inefficiencies, facilitate the misuse of public funds, and enable corrupt practices—ultimately impairing the delivery of essential services to the public. These negative outcomes not only hinder institutional performance but also erode citizens' trust in government institutions, resulting in broader socio-economic consequences (Van Peursem, 2015). Given these critical implications, the present study aims to examine the impact of internal auditor independence on the effective delivery of public services in Osun State. 1.2 Statement of the Problem The functionality of internal auditing is crucial to ensuring transparency, accountability, and the efficient management of public sector resources. Nonetheless, in many public institutions, the independence of internal auditors has frequently been undermined, raising concerns regarding the quality and reliability of public service delivery. When internal auditors are not afforded sufficient independence, their ability to conduct unbiased and objective evaluations is compromised, thereby fostering inefficiencies, corruption, and mismanagement of government resources (Mihret & Yismaw, 2017). Independence is a foundational principle of internal auditing because it empowers auditors to perform their duties free from undue influence, especially from those whose activities are under scrutiny (Alzeban & Sawan, 2015). However, it is common in many public organizations for internal auditors to operate under the direct control of senior management or to be subject to internal pressures that compromise their impartiality. Such conditions undermine the objectivity of audit findings and result in ineffective audits that fail to detect or prevent fraud and systemic errors (Cohen & Sayag, 2020). Within the context of public service delivery, the consequences of limited auditor independence are far-reaching. Flawed or weak audit practices allow inefficiencies and corrupt practices to persist unchecked, thereby constraining the ability of public institutions to fulfill their service delivery mandates effectively. This adversely affects citizens’ access to essential services and contributes to declining public confidence in government institutions. In light of these challenges, it becomes imperative to explore the impact of internal auditor independence on the quality and effectiveness of public service delivery. Thus, this study seeks to investigate the effect of internal auditor independence on the effective delivery of public services in Osun State. 1.3 Objective of the study The broad objective of the study is to assess the Impact of Internal Auditor Independence on the Efficiency of Public Service Delivery in Osun State. The specific objectives is as follows i.To evaluate how the independence of internal auditors influences transparency and accountability in public sector in Osun State. ii.To examine the effect pf the independence of internal auditors on the efficiency of public service delivery in Osun State. iii.To investigate the impact of internal auditors' independence on the prevention of fraud in the course of public service delivery in Osun State. iv.To identify the factors affecting the independence of internal auditor in the public sector of Ogun State. v.To propose strategies for enhancing the independence of internal auditors to improve public service delivery in Osun State. 1.4 Research questions The following questions have been prepared to guide the study i.How does the independence of internal auditors influences transparency and accountability in public sector in Osun State? ii.What is the effect pf the independence of internal auditors on the efficiency of public service delivery in Osun State? iii.What is the impact of internal auditors' independence on the prevention of fraud in the course of public service delivery in Osun State? iv.What are the factors affecting the independence of internal auditor in the public sector of Ogun State? v.What are the strategies for enhancing the independence of internal auditors to improve public service delivery in Osun State? 1.5 Research hypotheses The stated hypotheses have been formulated to further guide the study H0: The independence of internal auditor does not have an effect on the effective delivery of public services in Osun State Ha: The independence of internal auditor have an effect on the effective delivery of public services in Osun State 1.6 Significance of the study The study will be significant as it will offer practical recommendations for policymakers and government agencies on how to structure internal audit functions to maximize their effectiveness. These recommendations may include best practices for organizational reporting lines, resource allocation, and legal protections for auditors, all of which are essential for safeguarding their independence. Also, the study will be significant to the academic community as it will contribute to existing literature, add to library resources and serve as a guide to future researchers. 1.7 Scope of the study The study focus on the Impact of Internal Auditor Independence on the Efficiency of Public Service Delivery in Osun State. Empirically, the study will evaluate how the independence of internal auditors influences transparency and accountability in public sector in Osun State, examine the effect pf the independence of internal auditors on the efficiency of public service delivery in Osun State, investigate the impact of internal auditors' independence on the prevention of fraud in the course of public service delivery in Osun State, To identify the factors affecting the independence of internal auditor in the public sector of Ogun State and propose strategies for enhancing the independence of internal auditors to improve public service delivery in Osun State. Geographically, the study is delimited to Osun State. 1.8 Limitation of the study Like in every human endeavour, the researchers encountered slight constraints while carrying out the study. The significant constraints are: Time: The researcher encountered time constraint as the researcher had to carry out this research alongside other academic activities such as attending lectures and other educational activities required of her. Finance: The researcher incurred more financial expenses in carrying out this study such as typesetting, printing, sourcing for relevant materials, literature, or information and in the data collection process. Availability of Materials: The researcher encountered challenges in sourcing for literature in this study. The scarcity of literature on the subject due to the nature of the discourse was a limitation to this study. 1.9 Definition of terms Internal Auditor: An internal auditor is a professional within an organization responsible for evaluating and improving the effectiveness of risk management, control, and governance processes. Independence of Internal Auditor: Independence refers to the freedom of internal auditors from undue influence or pressure from management or other stakeholders that might compromise their ability to perform objective and impartial assessments. Public Services: Public services are essential services provided by government institutions to citizens, including healthcare, education, transportation, and law enforcement. Effective Delivery of Public Services: This refers to the efficient and timely provision of public services that meet the needs and expectations of the citizens. Financial Management: Financial management in the public sector involves the planning, organizing, directing, and controlling of financial activities such as procurement, allocation, and utilization of public funds to ensure that they are used effectively and in accordance with legal and regulatory requirements. Accountability: Accountability in the public sector refers to the obligation of government officials and institutions to be answerable for their actions, decisions, and the management of public resources.