Does the Independent of Supreme Audit Institutions Matter on Good Governance? An Insight from Nigeria Auditor General for the Federation

The Supreme Audit Institutions (SAI) are required to act as a corner stone in the public financial management system to prevent and discourage corruption by enhancing transparency, accountability and good governance. However, the executives and legislative arms of government in most of the African countries have reportedly overpowered the independence of SAI due to certain factors. Therefore, this study examines the factors hindering the independence of SAIs towards good governance in the Nigerian public sector. The primary data were collected from senior and management officers in the office of the Auditor General for the Federation and Public Account Committees of the National Assembly through self-administered questionnaire. One hundred and fifty (150) questionnaires were distributed to the respondents. The statistical analysis tool employed in this study is Structural Equation Modeling. The two hypotheses developed for this study were tested through regression analysis which indicated that both negatively affect good governance in the Nigerian public sector. The study revealed that the independence of SAIs in Nigeria was impaired in two critical areas; deliberate under-funding of SAIs and the quality of external auditor hired to perform the task. The study recommends that the constitutional provision that impairs the independence of SAIs should be repealed to ensure their financial autonomy. Finally, the study suggested that the Nigerian government should allow the SAI to independently determine the appointment of experienced external auditors and their fees.