INTERNAL AUDIT EFFICIENCY IN
BENUE STATE UNIVERSITY, MAKURDI
Every organization, be it public or private sector can be
seen as a socio economic entity into which resources are
committed for the purpose of attaining some specified
objectives. It may be business unit, producing goods and
services to a market or governmental agency providing a
number of services to people. The business unit or
governmental organizations needs to be managed in an
effective way, and this is ensured by proper
institutionalized internal audit in the respective units.
TABLE OF CONTENTS
TITLE PAGE
APPROVAL PAGE
DEDICATION
ACKNOWLEDGEMENT
DECLARATION
ABSTRACT
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
1.1 BACKGROUND TO THE STUDY 1.2 STATEMENT OF THE PROBLEM 1.3 OBJECTIVES OF THE STUDY 1.4 RESEARCH HYPOTHESES
1.5 JUSTIFICATION FOR THE STUDY 1.6 STRUCTURE OF THE STUDY
CHAPTER TWO: REVIEW OF RELATED LITERATURES
2.1 CONCEPTUAL FRAMEWORK ON INTERNAL AUDITING
2.2.1EVIDENCE GATHERING BY AUDITORS
2.1.2 AUDITING STANDARDS AND GUIDELINES
2.3 HISTORICAL DEVELOPMENT OF INTERNAL AUDITING IN THE NIGERIAN PUBLIC SECTOR
2.3.1 LEGISLATIVE COMPLIANCE IN THE PUBLIC SECTOR
2.3.2 INTERNAL AUDIT AND INTERNAL AUDITORS
2.4.1 FUNCTIONS AND OBJECTIVES OF INTERNAL AUDIT
2.5 INTERNAL AUDIT DEPARTMENT
2.6 INTERNAL AUDIT AND MANAGEMENT STYLE
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 RESEARCH DESIGN AND METHODOLOGY
3.2 RESTATEMENT OF RESEARCH HYPOTHESES AND QUESTIONS
3.3 POPULATION AND SAMPLING
3.4 RESEARCH INSTRUMENT AND TECHNIQUE
4.1 INTRODUCTION
4.2 ANALYSIS OF QUESTIONNAIRE
4.3 TEST OF HYPOTHESES
CHAPTER FIVE: SUMMARY, CONCLUSION AND
RECOMMENDATIONS
5.1 SUMMARY OF FINDINGS
5.2 CONCLUSION
5.3 RECOMMENDATIONS
5.4 LIMITATIONS OF THE STUDY
5.5 SUGGESTED AREA FOR FURTHER RESEARCH
BIBLIOGRAPHY
APPENDIX
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Over the years, there have been persistent comments in the Nigerian press and electronic media about brazen acts of misappropriation, fraud and embezzlement of public funds in the public sector organizations.
According to Olowokere (2001), “improper recording of accounts have accounted for the spate of irregularities and some acts usually perpetrated by staffs and management”. By way of solving these occurring problems, in April 2010, the Benue State Government probed Local Government chairmen on how funds from the Federation’s excess crude account were expended. Upon discoveries, about 10 Local Government chairmen were arrested by the economic and financial crimes commission, EFCC for allegedly misappropriating over #900 million excess crude oil fund allocated to the various Local Government councils (Sunday Trust April 18, 2010).
organizations known as public sector organizations engage in business activities that are not profit oriented but rather service oriented. They provide basic amenities like good education, health care facilities, good roads, electricity, and water etc, for the benefit and usage of the public.
There is therefore need for a sound internal control system, internal audit and even a statutory audit to be entrenched in Public organization for proper, fair and judicious use of the funds that are allocated to them.
In the light of the above, efforts have been made by the researcher to look at the various arguments and the statutory provisions for the manner in which internal audit should be carried out in the public sector.
Accordingly, the institute of chartered accountants publication statement on auditing covering the subject of internal control defines it as; “Not only internal check and audit, but the whole
systems of controls, financial and otherwise,
the business of the enterprise in an
orderly and efficient manner, ensure
adherence to management policy,
safeguard its assets and secure as much
as possible the accuracy, reliability, and completeness
of records.”
Furthermore, the Institute of Internal Auditors (IIA) defines internal audit as “an independent, objective assurance and consulting activity designed to add value and improve an organizations’ operations’’. It went further to establish its objective functions among other things to include, examining, evaluating, and monitoring the adequacy and effectiveness of internal control.
Hence, internal auditing as a process can thus be seen as a review of the accounting and internal control system of the enterprise in order to highlight weaknesses to management to enable corrections to be made.
when examining the records of the organization but rather, if in the process of examining the records, the auditor detects any fraud or financial irregularities, it is his duty to report to management.
Statutory audit as defined by Awe (2002) “is a process whereby the accounts of both public and private sector organizations, charitable, trustees and professional firms are subjected to scrutiny in such detail as will enable the auditor form an opinion as to their accuracy, truthfulness and fairness”.
Historically, according to Stantocki, (1979:5), “internal auditing has its root over 200 years ago in the first division of interest between those engaged in business undertaking (the entrepreneurs) and those who supplied the finance without necessarily engaging in the day to day management of the business.
One of the major challenges that confront evaluating internal audits efficiency in public organizations ranges from the low level of internal check, internal control, and internal audit which gives rise to cases or irregularities.
Furthermore, the absence of internal audit teams in the private sector have often times given rise to difficult design and analysis because relevant data and information is not often made available.
However, there appears to be little or no control internally especially in the public sector organizations, according to Osakwe and Godwin (2001), the poor evaluation confronting internal audits both in the public and private sector is often birthed by non preparation of financial statements that can be scrutinized by both internal and external auditors respectively.
The above gave rise to the following questions which this research aims to answer.
ii. What are the combined negative effects of quack and unskilled auditors and how do they affect the audit report? iii. Have there been delays in receiving feedback as a result of
audit processes?
1.3 OBJECTIVES OF THE STUDY
The general objective of this research work is to appraise the efficiency of audit performance in Benue State University, Makurdi.
The specific objectives of the study are;
a. To ascertain whether there have been delays in receiving feedback as a result of audit processes
b. To examine the internal control tools and techniques which are employed to prepare audit report.
1.4 RESEARCH HYPOTHESES
HYPOTHESIS I
Ho1: The audit process does not create delays in activities
HYPOTHESIS II
Ho2: The staff of the audit unit has not been efficient in rendering
their services
1.5 JUSTIFICATION FOR THE STUDY
The need for the study arises as a result of the fact that, it is the general belief especially during this political era that the public sector organizations are organizations where individuals can enrich themselves with public funds. In this regard, there is always the flouting of internal control systems, one of which is the pre-auditing of voucher before payment is made and the recklessness with which public funds are disbursed without regard to constitutionally laid down rules and regulations in these public sectors. Osakwe and Godwin (2001)
management tool”. Habiru (2001) wrote on “internal audit on profit oriented organizations”, while Keffi (1996) wrote on “internal audit procedures in the banking industry”. This study however, will place emphasis on internal audit in the public sector and its relevance in these public sectors.
Therefore, this study will reveal that internal audit can
i. Ensure prudence in effective use of public funds.
ii. Curb financial malpractices through the system of effective internal control system.
iii. Generate more good by paying continuous attention to the in service training of members of the internal audit department.
1.6 STRUCTURE OF THE STUDY
four covers data presentation, analysis and discussion of result
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