Author(s): Benjamin, R.D., Dada, S.O., Adegbite, S.A.
Past studies focused on the role of internal auditors in fraud prevention and internal auditing in relation to good corporate governance and did not explore risk assessment by internal auditor for effectiveness in an organisation with the view to prevent corporate failure. This study investigated the effect of risk assessment by internal auditor on effectiveness of listed companies in Nigeria. The study adopted a survey research design. The population of the study consisted of 24 companies selected from the eleven industrial sub-sectors of the 161 listed companies on Nigerian Stock Exchange as at 30th November, 2019. The sample frame is 5012 and sample size of 501 (comprising 401 internal auditors and 100 top management staff) representing 10% of the population. Structured questionnaire with a five point Likert – scale was administered with 87.43% response rate. Random sampling technique was adopted in the selection of the 24 companies with each chosen company representing each sector. The research instrument was subjected to content validity and test and re-test method of reliability which yield Cronbach alpha value of 0.798. Result indicated that risk assessment (RA) by internal auditors has positive effect on effectiveness (EFFTV) of listed companies in Nigeria with β = 0.194, t (438) = 9.827, p<0.05. F-Statistics of 12.653; Adjusted R2 = 0.051 with p – value of 0.000 which is statistically significant at p < 0.05. Therefore, companies’ management are advised to strengthen the internal auditors in the assessment of risk that might impact on the effectiveness of an organisation to be able to avert organisational emerging risk.