Does Internal Audit Reduce Principal–Agent Conflicts? An Empirical Test of Agency Theory
This empirical study examines whether internal audit effectiveness reduces principal–agent conflict within Nigerian financial institutions. It evaluates the roles of information asymmetry, agency costs, managerial accountability and board independence.
01
Study objective
This research investigates whether more effective internal audit functions are associated with lower levels of principal–agent conflict in Nigerian financial institutions.
It translates the theoretical arguments of agency theory into variables that can be examined empirically.
02
Proposed analytical model
Internal audit effectiveness is considered through factors such as independence, competence, quality of work, access and management response.
The study examines how these factors relate to information asymmetry, agency costs, managerial accountability and the oversight role of independent boards.
03
Current progress
The project is currently in data collection and research development. Findings and methodological details will be added here as the study progresses.