ABSTRACT
The
study was aimed at examining auditing in a computerised accounting system
precisely Unilever Nigeria Plc. Some of the aims and objectives of the study is
to know whether the involvement of auditor at system development stage will
enhance the auditability of a computerized accounting system and also to know
whether when auditors performs their works on the company’s operations
unexpectedly, it will enhance the efficiency of his audit assignment. A survey
research design was used. A sample size of eighty (80) staff from Isolo, Agbara
and Apapa branches of Unilever Nigeria Plc in Lagos was chosen and administered
randomly. The major statistical model employed are simple percentage used to
analyse section ‘A’ of the questionnaire and chi-square for section ‘B’ in
testing the hypothesis developed. Out of the 80 questionnaires, 70 were
completed and returned; giving a response rate of 87.5%. the core findings of
the results obtained showed that the involvement of an auditor at system
development stage will enhance the auditability of a computerized accounting system and when auditor performs
his work unexpectedly; it will enhance the efficiency of the audit assignment.
Hence it was recommended that auditors should be more equipped and practical in
the area of computer usage, programme and its applications and that experienced
auditor in electronic data processing systems should be physically present at
the system departments and installation stage to offer useful suggestions.
TABLE OF CONTENT
TITLE
PAGE
Certification ii
Dedication iii
Acknowledgement iv
Abstract v
Table of contents vi
CHAPTER
ONE
INTRODUCTION
1.1
Background
to the Study 1
1.2
Statement
of the Problem 2
1.3
Aims
and Objective of the Study 3
1.4 Relevant Research Questions 3
1.5 Research Questions and Hypothesis 4
1.6 Significance of the Study 4
1.7 Scope of the Study 5
1.8 Definition of Terms 5
1.9 Historical Background of Unilever Nigeria Plc 7
References 8
CHAPTER TWO
LITERATURE REVIEW
2.1 Preamble 9
2.2 Theoretical Frame Work Of The Study 9
2.2.1 Definition of Information Technology (IT) 9
2.2.2 Information Technology (Early Development) 10
2.2.3 Definition
of Computerised Accounting Information System 12
(Information
Technology Based Accounting Systems)
2.2.4 The
Differences between Computerised Accounting Information 13
Systems
(CAIS) and Manual Accounting Systems.
2.2.5 Theoretical
Presentation 15
2.2.6 Conceptual
Framework 16
2.3 Empirical Review Of Previous Work In The
Study Of Studies 36
2.3.1 Innovative uses of computer audit techniques
and continuous 36
Auditing
2.3.2 Financial informatics
enterprise and audit risk in developing 40
Economy
References
CHAPTER
THREE
RESEARCH
METHODOLOGY
3.1 Preamble 48
3.2 Research Design 48
3.3 Population of the Study 48
3.4 Sampling, procedure and
Sample Size 48
3.5 Data Collection Instrument
and Validation 49
3.6 Method of data Analysis 49
3.7 Limitation of the
Methodology 50
References 51
CHAPTER
FOUR
DATA
PRESENTATION AND ANALYSIS
4.1
Preamble 52
4.2
Presentation and Analysis of
Data According to Research Questions
52
4.2.1 Age Distribution 52
4.2.2 Sex Distribution 53
4.2.3 Marital Status 53
4.2.4 Education Qualification 54
4.2.5 Age of Specialization 54
4.2.6 Working Experience 55
4.2.7 Status and Department in the Organisation 56
4.2.8 General Findings 57
4.3
Test
of Hypotheses 66
4.4 Discussion of Findings 69
CHAPTER
FIVE
SUMMARY,
CONCLUSIONS AND RECOMMENDATIONS
5.1 Summary 70
5.2 Conclusion 71
5.3 Recommendation 71
BIBLIOGRAPHY 73
APPENDIX
CHAPTER ONE
INTRODUCTION
1.1 Background to the
Study
Many years ago computerization was
virtually unknown in the accounting environment, but today there are few
organizations whose accounting data are not processed by computers.
Before computer was introduced into the
business world, accounting computerization were usually done manually, but with
the recent development, accounting jobs become easier and quicker to perform.
Though computerized accounting system has
it own advantages but there are some disadvantages attached to the system.
Auditors are faced with some problems using the computerized accounting system.
It is generally believed that computers
are mistake free but rather the human elements involved could manipulate the
system.
One of the problems confronting computer
auditor is the inability to obtain computer time.
Also, most auditors in a computerized
accounting system adopt ‘Round the computer Audit Approach’. This exposes them
to high audit risk.
Many at times computer acts impersonally,
that is, the auditors may not be able to obtain all the necessary information
or fact that are non-financial in nature.
Also, most auditors are not always
involved in the system development and design stages. This poses threat to the
auditor.
The study would look into how the problems
would be rectified in order to make auditors make use of the system without any
threat.
1.2
Statement of the Problem
Emphasis has been made that auditing
through the computer in approach may vary depending on the organization, type
of operations, technological factor and other factors.
The likely problems that confront the
computer auditors in performing their assignments are as follows:
The Inability to Obtain Computer Time
Many a times, auditor might come around to
use the computer and its facilities, but the staff as well as management might
be using the system, thereby, making it impossible for the auditor to perform
his audit works.
At times, computer acts impersonally, that
is, the auditor may not be able to obtain all the necessary information’s or
facts that are non-financial in nature, for instance, what motivate employees
most to ensure better performance.
Also, most auditors in a computerized
accounting system adopt “Round the Computer Approach”. This exposes them to
high audit risk in a situation where the outcomes have no direct correlation
with the input on which they based their opinion on the financial statement.
At times auditors are not always involved
in the system development and design stages. This poses threat to the auditor
as it denies him of some special print outs and controls to obviate the lack of
audit trail.
Unless, the auditor performs the audit unexpectedly,
he might not be given the correct version of the accounting application package
for the purpose of the audit. And in an attempt to perform the audit unexpectedly,
computer time might not be available.
1.3
Aims and Objective of the Study
The study look into the various
procedures, approaches and controls in the computerized accounting system with
reference to Unilever Nigeria Plc. The aims and objective of the study is to
point out the likely problems faced by auditors in the process of performing
the audit assignment within the computerized system of the company.
The study is aimed at knowing whether
computer facilities are enough for auditors use; if the use of computer time by auditors affect
productivity, to know whether the involvement or non-involvement of an auditors
affect productivity, to know whether the involvement or non-involvement of an
auditor at system development stage will enhance the auditability of a
computerized accounting system. To know whether the possibility or non-possibility
of the auditor in performing his works unexpectedly on the company’s operations
will enhance the efficiency of his audit assignment.
1.4
Relevant
Research Questions
i)
Are computer facilities enough
for the auditors use?
ii)
Does the use of computer time
or facilitates by auditors affect productivity?
iii) Are
auditors involved at the system development stage?
iv) Does
unexpectedly audit isit affect the organization’s activities?
v)
Are controls which are in
existence and satisfactory in principle, applied throughout the period under
consideration or review?
1.5 Research Questions
and Hypothesis
The following research hypothesis are established and tested in this study.
Hypothesis
1
H0:
The
involvement of an auditor at system development stage will not enhance the
auditability of a computerized accounting system.
H1:
The
involvement of an auditor at system development stage will enhance the
auditability of a computerized accounting system.
Hypothesis
2
H0: The auditor’s performance during unexpected
visits will not enhance the efficiency of the audit assignment.
H1:
The auditor’s performance during unexpected
visits will enhance the efficiency of the audit assignment.
1.6
Significance of the Study
It is generally believed that computers
are mistake free but rather the human elements involved could manipulate the
system or not properly used in accordance with exception. To eliminate
unauthorized access, inefficient and ineffective use of the system, has
resulted in the need to adopt some important controls in data processing.
The aim of this research efforts is to
critically examine the tools to be used,
approach to be adopted and the system
control with the view to encouraging the promotion of operational efficiency,
safeguarding the company’s assets and encouraging compliance with existing
company’s policies and procedures, check and maintain the accuracy of business
data.
The study also focuses on the capabilities
of the auditor to ascertain his needs to cope with the computerized accounting
system of the company.
1.7
Scope of the Study
The covered areas of this research work
are some of the branches of the company in Lagos which are situated at Isolo,
Apapa and Agbara respectively.
However, major constraint of the study is
the time interval required for an in-depth coverage, financial constraint and
the unco-operative attitude of an already aggrieved Nigerian work force
occasioned by the harsh economic situation.
1.8
Definition of Terms
Application
Package: These are Bundles of two or more computer
programmes that together address a specific business need.
Auditing:
This is an independent examinations being
carried out by an independent person known by the management of an organization
with the aim of expressing an opinion on the financial statement.
Audit
Risk: This is the possibility of expressing an
invalid opinion on the financial statement.
Audit
Round the Computer: Auditor solely depends on the
computer operators for the supply of all required information. He needs not
operate the computer but must obtain adequate print outs of the various
accounts he wants to examine.
Audit
Trail: This is a term used to describe those
documents and records generated within an accounting system which enable the
individual transaction to be traced through the accounting system from
origination to conclusion.
Computer
Auditor: The computer auditor is that person with the
professional know-how to cope with the complexities of computer problems
ranging from errors, omissions, system malfunction, inappropriate computer
applications, improper operating procedure and personal administration.
Computer:
Is a machine that is capable of accepting data
as input, obey some stated rules alternatively called programmes to procedure
an output.
Data:
The name
given to basic facts e.g. number of items bought.
Data
Processing: The systematic recording, arranging,
filing and dissemination of facts relating to the physical events occurring in
the business.
External
Auditor: An external auditor is an independent person
that examines the financial statement prepared by an organization.
Internal
Controls: These are measures such as procedures, rules,
policies and regulations established within an organization, which are aimed at
increasing the probability of the organization in achieving its objectives.
System
Development and Design: This involves the designing of
a new system to replace the old one with proper authorization.
Stock
Exchange: Organized market place in which stocks and
bonds are traced by members of the exchange.
Merger:
The combining of two or more entities into one,
through a purchase acquisition or a pooling of interest different from a
consolidation, in that no new entity is created from a merger.
1.9
Historical Background of Unilever Nigeria Plc
Unilever Nigeria Plc, was incorporated as
Lever Brother (West Africa) Ltd on 11th April, 1923 by Lord
Leverhulme, but the company’s antecedents have to be traced back to his
existing trading interests in Nigeria and West Africa generally, and to the fact that he had since
the 19th century been greatly involved with the soap business in
Britain. Unilever Nigeria Plc started as a soap manufacturing company, and is
today one of the oldest surviving manufacturing organization in Nigeria.
After series of Mergers/acquisitions, the
company diversified into manufacturing and marketing of foods, non-soapy
detergents and personal care products. These mergers/acquisitions brought in
Lipton Nigeria Ltd in 1985, Cheesebrough Ponds Industries Ltd in 1988. The
company changed its name to Unilever Nigeria Plc in 2001.
Unilever Nigeria Plc is a public liability
company quoted on the Nigerian Stock Exchange since 1973 with Nigerians
currently having 49% of equity holdings.
Unilever, as a company has embarked on a
programme of restructuring in a bid to re-energize itself; the vision is
“re-investing ourselves”, so that it can deliver fully on its promises to its
consumers, customers and investors.
Over the years, Unilever Nigeria Plc has
been a socially responsible and response organization that takes strategic
actions for the improvement of the communities and environments in which it
operates. The company has made provision for assistance in fields of health,
education (children welfare and potable water/hygiene as part of its social
responsibility programme in the Nigeria communities.
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