Internal Audit Quality and Public Procurement Performance: Empirical Evidence from Subnational Governments in Zambia

Abstract

Persistent procurement irregularities and audit-reported financial misconduct in Zambia’s public sector raise concerns about the effectiveness of internal audit systems in detecting and preventing control failures that undermine procurement performance. Despite the centrality of internal audit to public financial management, empirical evidence remains scant on whether internal audit structures meaningfully constrain procurement-related inefficiencies and misconduct in subnational governments. This study investigates the effect of internal audit quality dimensions competence, independence, management support, and audit procedures on procurement performance in local government authorities in Luapula Province, Zambia. Guided by agency theory and audit quality frameworks, the study employs a quantitative correlational design based on survey data collected from 101 employees from local government authorities in Luapula Province. Data were analyzed using descriptive statistics, Pearson’s correlation, and hierarchical multiple regression techniques. The findings show that internal audit competence (β = 0.100, p ≈ 0.67), independence (β = 0.014, p ≈ 0.96), and management support (β = −0.310, p ≈ 0.40) have no statistically significant effect on procurement performance. However, internal audit procedures (β = 0.443, p ≈ 0.001) have a positive and statistically significant effect.The evidence indicates that formalized auditing procedures as opposed to structural audit attributes is the most essential control mechanism to reduce procurement inefficiencies. The contribution of the study to the literature of accounting and public financial management is that it empirically demonstrates the application of procedures audit rigor within a developing-country subnational setting, and urges researchers to focus the research on procedural audit rigor to improve accountability and value-for-money in the process of publicly contracting goods and services.