Impact of Internal Audit on Income Tax in Nigeria: Evidence from Anambra State Board of Internal Revenue
Nneka Maureen Okeke*
Effective tax management is crucial for strengthening internally generated revenue, vital for economic growth and development; yet, tax agencies groan under myriads of challenges associated with systemic leakages, non-compliance, and loose internal controls. The research consequently investigated the relationship between internal audit functions and income tax, with evidence gathered from the Anambra State Board of Internal Revenue. It concentrated on evaluating the influence exerted by internal audit competence, internal audit independence, and the level of management support on the administration of income tax. The study adopted a survey research design, which enabled the collection of data through structured questionnaires distributed to selected board members. The hypotheses were analyzed using linear multiple regression. Results show that audit competence and audit independence have a detrimental impact on income tax performance. This implies that while auditors’ skills are necessary for identifying errors, those skills have failed to increase tax outcomes. Furthermore, it also showed that management support had no significant influence on income tax performance. This discovery signifies that managerial support, being a facilitator in internal audit functions, has zero claim on improved tax results. Based on these findings, the study advocated for the allocation of resources for the training of internal auditors in identifying revenue losses effectively. Lastly, auditor independence should be strengthened so as to enhance effective tax administration.
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