COMPLIANCE AUDIT AND ACCOUNTABILITY OF PUBLIC SECTOR ENTITIES IN NIGERIA

Abstract

Compliance audit is a key instrument for promoting accountability in public sector entities. Although compliance audits are critical for accountability, their implementation in Nigeria remains largely ineffective, resulting into financial leakages and undermining service delivery to the citizens. This study investigates the effect of compliance audits on accountability of public sector entities in Nigeria. Employing a survey research design, data were collected from 276 auditors across different grade levels in the Office of the Auditor- General for the Federation using stratified random sampling. The study focuses on two key dimensions of compliance audits, Act based compliance audit (Compliance with Legal Framework/Norms (CLFN)) and Standard based compliance audit (Compliance with International Audit Standards (CIAS)). Partial Least Squares Structural Equation Modeling (PLS-SEM) was employed to analyze the relationships. Findings reveal that both CLFN (β = 0.475, p < 0.01) and CIAS (β = 0.252, p < 0.01) have significant positive effects on public sector accountability, with CLFN showing a stronger influence. These effects were most prominent in financial accountability, followed by administrative and social accountability. The model explains 42.3% of the variance in public sector accountability (R2 = 0.423), indicating substantial predictive relevance. The study concludes that context-specific legal compliance frameworks are more impactful than generalized international standards. The Study therefore recommend among others, the Office of the Auditor-General for the Federation and state audit institutions should develop and enforce locally relevant audit frameworks tailored to Nigeria's legal and governance realities to strengthen public sector accountability.

Keywords: Compliance Audit, Act Based Audit, Standard Based Audit, Public Sector Accountability, PLS-SEM.