An Evaluation of Internal Auditing Practices in Nigerian Manufacturing Firms: A Case Study of Dangote Cement Plc
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Background of the Study
Internal auditing is a critical component of organizational governance, particularly in large manufacturing firms where operational complexities demand robust oversight mechanisms. It serves as a systematic and disciplined approach to evaluate and enhance risk management, control, and governance processes. In Nigeria, the manufacturing sector contributes significantly to the economy, with firms like Dangote Cement Plc playing pivotal roles in industrial growth and job creation (NBS, 2023). However, the sector is often plagued by challenges such as operational inefficiencies, compliance issues, and financial mismanagement.
Dangote Cement Plc, as a leading manufacturing entity in Nigeria, operates in a highly competitive and regulated environment. The importance of internal auditing in ensuring compliance with regulatory requirements, enhancing operational efficiency, and preventing financial irregularities cannot be overemphasized (Adetola & Okoro, 2024). Despite the established frameworks, questions remain about the effectiveness of internal audit practices in addressing these challenges.
The global discourse on internal auditing has evolved, emphasizing the integration of technology, real-time monitoring, and strategic alignment with organizational goals (KPMG, 2025). In the Nigerian context, the adoption of best practices in internal auditing is often hindered by limited resources, lack of expertise, and resistance to change. This study aims to critically evaluate the internal auditing practices at Dangote Cement Plc, with a view to identifying strengths, weaknesses, and areas for improvement.
Statement of the Problem
Internal auditing practices in Nigerian manufacturing firms often fall short of global standards due to challenges such as inadequate expertise, limited adoption of technological tools, and lack of independence. For a firm like Dangote Cement Plc, with extensive operations and significant market share, ineffective internal auditing can lead to compliance lapses, financial losses, and reputational damage. Previous studies (Adeoye & Salisu, 2023) highlight the gap between policy frameworks and actual practices in internal auditing, raising concerns about their efficiency in addressing operational and financial risks.
Despite the presence of internal audit units, issues such as non-compliance with regulatory standards and recurring financial irregularities persist. These challenges underscore the need for an in-depth evaluation of internal auditing practices to ensure they align with the firm's strategic objectives and the dynamic business environment. This study addresses the problem by examining the effectiveness, challenges, and prospects of internal auditing practices at Dangote Cement Plc.
Objectives of the Study
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To evaluate the internal auditing practices at Dangote Cement Plc and their alignment with global standards.
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To identify the challenges affecting the effectiveness of internal audit functions in the company.
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To recommend strategies for enhancing internal auditing practices in the Nigerian manufacturing sector.
Research Questions
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What are the internal auditing practices currently employed at Dangote Cement Plc?
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What challenges hinder the effectiveness of internal audit functions at Dangote Cement Plc?
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What strategies can enhance the efficiency of internal auditing in Nigerian manufacturing firms?
Research Hypotheses
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There is a significant relationship between internal auditing practices and operational efficiency at Dangote Cement Plc.
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Challenges in internal auditing significantly impact its effectiveness at Dangote Cement Plc.
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Enhancing internal auditing practices will improve compliance and financial management in Nigerian manufacturing firms.
Scope and Limitations of the Study
The study focuses on evaluating internal auditing practices at Dangote Cement Plc, with an emphasis on their effectiveness in risk management, compliance, and operational efficiency. Data will be collected from the internal audit department and other relevant stakeholders within the company. Limitations may include restricted access to proprietary information and potential biases in respondents' perspectives.
Definitions of Terms
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Internal Auditing: A systematic, independent process for evaluating and improving risk management, control, and governance.
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Operational Efficiency: The ability of an organization to deliver products or services using minimal resources effectively.
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Compliance: Adherence to laws, regulations, and organizational policies.
