Background of the Study
Internal audits are fundamental to strengthening corporate governance frameworks by promoting accountability, compliance, and operational efficiency. Governance in financial institutions, especially in banks, requires robust internal audit mechanisms to address regulatory requirements and mitigate risks (Ademola et al., 2023). Nigerian banks operate in a complex and dynamic environment characterized by regulatory pressures, technological advancements, and heightened stakeholder expectations.
Fidelity Bank Plc, a leading financial institution in Nigeria, has implemented various corporate governance initiatives to sustain stakeholder trust and regulatory compliance. Internal audits play a vital role in this process, providing an independent assessment of internal controls, risk management systems, and governance structures. Despite these efforts, challenges such as fraud, operational inefficiencies, and regulatory infractions remain prevalent in the banking sector.
Globally, internal auditing has evolved into a strategic tool for governance enhancement, ensuring that organizations adhere to ethical and legal standards. This study explores the role of internal audits in fostering governance in Fidelity Bank Plc, emphasizing the mechanisms through which audits influence decision-making, risk management, and compliance.
Statement of the Problem
Governance challenges in Nigerian banks have led to instances of mismanagement, fraud, and operational inefficiencies, undermining public confidence. While internal audits are designed to strengthen governance, their effectiveness in Nigerian banks, including Fidelity Bank Plc, is often questioned due to resource constraints, inadequate training, and management interference.
There is limited empirical research on the specific contributions of internal audits to governance in Nigerian banks. Most studies focus on external audits or governance structures without a detailed examination of internal auditing processes. This gap in research highlights the need to investigate how internal audits enhance governance, particularly in Fidelity Bank Plc, which operates in a regulatory environment marked by rapid change and significant risk exposure.
Objectives of the Study
To examine the role of internal audits in improving governance structures in Fidelity Bank Plc.
To assess the effectiveness of internal audit practices in identifying and mitigating risks in Fidelity Bank Plc.
To evaluate the challenges faced by internal auditors in enhancing governance at Fidelity Bank Plc.
Research Questions
How do internal audits improve governance structures in Fidelity Bank Plc?
How effective are internal audit practices in identifying and mitigating risks in Fidelity Bank Plc?
What challenges do internal auditors face in enhancing governance at Fidelity Bank Plc?
Research Hypotheses
H₀: Internal audits do not significantly improve governance structures in Fidelity Bank Plc.
H₀: Internal audit practices are not effective in identifying and mitigating risks in Fidelity Bank Plc.
H₀: Internal auditors do not face significant challenges in enhancing governance at Fidelity Bank Plc.
Scope and Limitations of the Study
The study focuses on Fidelity Bank Plc and its internal audit practices between 2023 and 2025. It examines the role of internal audits in governance, with an emphasis on risk management and compliance. Limitations include restricted access to proprietary audit reports and potential biases in responses from bank staff. The findings may not apply to smaller or non-banking financial institutions.
Definitions of Terms
Internal Audits: Independent, objective assurance and consulting activities designed to improve an organization’s operations.
Corporate Governance: The system by which organizations are directed and controlled, ensuring accountability and fairness.
Fidelity Bank Plc: A Nigerian commercial bank offering financial services across various sectors.
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