INTERNAL AUDIT ON FINANCIAL PERFORMANCE IN DEPOSIT MONEY BANK IN NIGERIA

The Nigerian banking sector has experienced remarkable transformation since its emergence in the late nineteenth century, progressing from a small number of foreign-owned banks to a well developed system comprising both indigenous and international institutions. Against this backdrop, this study investigated the effect of internal audit on the financial performance of deposit money banks in Nigeria. An ex post facto research design was adopted because it is suitable for examining causal relationships in situations where the independent variable cannot be manipulated. Purposive sampling was used to select a representative group of banks in Nigeria. The findings indicate that debt-to-asset (DTA) has the capacity to influence variations in return on assets and return on equity among the selected deposit money banks in Nigeria between 2014 and 2023. The results also show that market return explains the changes observed in return on assets and return on equity within the selected banks. Based on these findings, deposit money banks should emphasize diversification and the quality of asset portfolios through prudent lending practices, investment in low-risk securities, and broader asset-class diversification. In addition, they should establish strong credit risk management frameworks to reduce losses arising from non-performing loans.