Acta Universitatis Danubius. Œconomica, Vol 15, No 1 (2019)

Abstract

This study examines the effect of internal control system on financial accountability in terms of effective and efficient financial operation, compliance with applicable laws and regulations, reliable financial reporting, transparency and flow of information were obtained primarily from a random sample of 354 Heads of Units in the Account and Audit Departments in 65 Ministries of the Southwestern Nigeria who are directly involved in the management, financial planning and controls with a well-structured questionnaire. The 222 fully completed and returned questionnaires were coded and analysed using descriptive analysis and regression technique. The result reveals that internal control system had positive effect on financial accountability in terms of effective and efficient financial operation, compliance with applicable laws and regulations, reliable financial reporting, transparency and flow of information with the mean scores of 4.22, 3.91, 3.86, 3.81 and 3.47 respectively. The regression result shows that control environment, control activities, risk assessment, information and communication and monitoring and evaluation are significantly impacting financial accountability in public sector. The ANOVA with the F = 16.995, p < 0.05 shows that all the components of internal control system had significant effect on financial accountability in public sector. Therefore, the study concludes that internal control system put in place in the public sector is well established and adequate for effective and efficient financial accountability. There is a need for the internal control system in the public sector to ensure adequate use of all channels of communication and information flow for proper financial accountability. This study recommends that the internal control unit should be encouraged to maintain their independence role such that, the internal auditor should be adequately independent from those responsible for the financial operation so as to be able to provide additional assurance on cost efficiency and effectiveness of the internal control system.