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International Journal of Academic Research in Accounting, Finance and Management Sciences

Open Access Journal

ISSN: 2225-8329

Effect of Value for Money Auditing on Cost of Governance in Nigeria: Evidence from Local Government Councils in Ebonyi State, Nigeria

Nwamgbebu Obinna P., Oketa Chiamaka E., Agba Chukwuka C., Nwambe, Cynthia O.

http://dx.doi.org/10.6007/IJARAFMS/v9-i1/5954

Open access

The study examined the effect of value for money auditing on cost of governance in local government councils in Nigeria: The specific objectives were to determine how the effects of economy principle in procurement, effect of efficiency principle in utilization of resources and effect of effectiveness principle in budget implementation have affected cost of governance in local government councils in Nigeria. The researcher adopted cross-sectional survey design which made use of primary data obtained through the use of structured questionnaires. The questionnaires were administered to 167 senior staff in account and internal audit departments, but only 108 were returned and valid for the analysis of the study. Multiple regression method anchored on ordinary least square was employed in testing the hypotheses. The result of the analysis revealed that economy principle in procurement and effectiveness principle in budget implementation have significant effect on cost of governance, while efficiency principle in utilization of resources has no significant effect on cost of governance in local government councils in Nigeria. The implication of these findings is that a good number of local government administrators in Nigeria played their role in adhering to value for money auditing principles. The study therefore concluded that adherence to the principles of value for money auditing by local government administrators in Nigeria will reduce high cost of governance. The study recommended that the office of auditor general for local government should on regular basis review audit techniques to ascertain whether their intended purposes are being achieved economically, efficiently and effectively.