Internal Audit Values and Fraud Detection: An Empirical Analysis

Globally, organizations have various challenges of fraudulent activities and exposure to fraud risk irrespective of size, location or sector. Fraud is not a new phenomenon, it occurred from centuries with numerous high profile cases, and these are perceived to have adversely affected company’s profitability, corporate governance, dividend, and business growth, this calls for study on how Internal Audit Values (IAV) can influence timely Fraud Detection (FD). Many researches have been conducted on fraud and FD, but not many considered the influence of IAV in their study. This study considered the probable influence of IAV on FD in Nigerian Manufacturing Industries (NMI). Survey research design was adopted with population study of 19,443 workers in ten selected industries in Nigeria manufacturing sector. 392 sample size was determined and questionnaire administered, this gives 86% response rate. Descriptive and inferential statistics were used to analyze data at 5% level of significance. The study revealed that IAV positively influenced FD (Adj.R2=0.857,F(3, 337)=667.489, p=0.000). The study concluded that IAV influenced and has significant impact on FD in NMI. The study further recommends that independence of internal audit unit and quality of audit team should be guaranteed. Opportunity that enhances capability should be flagged and promptly investigated, internal control mechanism should be re-enforced to mitigate fraud while technological monitoring devices should be adopted.