Purpose : The purpose of this paper is to assess the internal auditing practices on the financial performance of government-owned companies (GOCs) and to consider the The effect of a contextual factor-Political influence – on this relationship.While Much emperical works have given diverse reasons for the poor financial performance of GOCs, research evidence of the impact of internal auditing practices on the financial performance of GOCs in the Nigerian context is scanty. Design/ Methodology/Approach : The study adopted a nomothetic methodology (quantitative approach). Data were collected from key informants using a research instrument. Employing the Statistical Package for Social Sciences ( SPSS) Version 13.0, returned instruments were analyzed using frequency tables, Pearson’s and Stepwise Regression Method. Finding : The study found no strong association between internal auditing practices and financial performance of GOCs and thattt political influences do not significantly impact this relationship. The weak association between internal auditing practicesand financial performance is attributed to these enterprises’ inadequacy and poor implementation of internal auditing practices. Where internal auditing is de-emphasized it cannot impact positively on performance. Practical Implications : The paper recommends the need for the establishment of an Audit Department where it is non-existent, taking into consideration the size of the Enterprise as well as the strenghtening of the Department by according it the necessary Professional independence and employing adequate number of experienced and qualified staff. Originality/Value : This pape has provided useful insights and fresh emperical evidence of the relationship between internal auditing practices and financial performance of government enterprises in the Nigerian context.