IMPACT OF INTERNAL AUDIT EFFECTIVENESS ON FINANCIAL STATEMENT QUALITY IN FIRST BANK NIGERIAN LIMITED

ABSTRACT The reliability and transparency of financial statements are important for effective corporate governance and stakeholder confidence in the banking sector. Despite the central role of internal audit in ensuring financial reporting quality, many Nigerian banks continue to experience lapses in reporting accuracy and consistency. This study, therefore, examined the impact of internal audit effectiveness on the financial statement quality of First Bank Nigeria Plc over a five-year period (2019–2024). The specific objectives were to assess how professional competence, independence, management support, and the quality of internal audit reports influence financial reporting quality. The study employed a case study research design and relied exclusively on secondary data sourced from the annual reports and financial statements of First Bank. Data analysis was conducted using descriptive statistics and multiple regression techniques, supported by diagnostic tests including normality, multicollinearity, heteroskedasticity, Durbin-Watson, and Lagrange Multiplier tests to ensure the robustness of the model. The findings reveal that professional competence and independence, significantly and positively influence financial statement quality, while management support showed a significant negative effect. The quality of audit reports was found to be statistically insignificant. Based on these findings, the study concluded that enhancing internal audit professionalism and autonomy is essential for improving financial reporting standards, while excessive managerial interference can undermine reporting quality. The study recommends that the bank should prioritize the recruitment and continuous professional development of qualified audit staff, safeguarding audit independence through proper reporting lines, limiting managerial interference, and ensuring that audit recommendations are implemented effectively