Effect of Internal Audit Quality on the Financial Performance of Micro, Small and Medium Scale Entreprises: A Case Study of Some Selected MSMEs in Kano State
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Financial Performance,
Internal Audit Quality,
Kano State,
MSMEs
Main Article Content
Nura Musa
Sagir Lawal
Felix Karma
Abstract
Background: The study examines the effect of internal audit quality on the financial performance of some selected Micro, Small, and Medium Scale Enterprises (MSMEs) in Kano State, Nigeria.
Objectives: The study specifically investigates the influence of auditor independence, competence, objectivity, audit scope, stakeholder engagement, and continuous improvement practices on the MSMEs financial performance, evaluated using Return on Assets (ROA).
Methods: A quantitative research design was adopted, employing structured questionnaires administered to 50 respondents across five selected MSMEs. The study collected data and analyzed them using statistics and regression analysis techniques.
Results: Findings show that internal audit quality has significantly affect financial performance of MSMEs. In particular, auditor independence and competence were identified as the most influential factors in enhancing ROA. The study also confirms that a well-defined audit scope, active stakeholder engagement, and continuous improvement practices contribute positively to financial results.
Conclusion: The results underscore the significance of strengthening internal audit units to promote transparency, accountability, and optimal financial management in SMEs. On the basis of the findings, it is suggested that SMEs invest in developing competent and independent internal audit units, regularly update audit procedures, and integrate audit feedback into decision-making processes.
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Copyright (c) 2026 Nura Musa, Sagir Lawal, Felix Karma
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