ABSTRACT
This research examine ASSESSMENT OF INTERNAL AUDITING AS A TOOL FOR IMPROVING COMPANIES PERFROMANCE, with reference to Ammasco International Limited Kano.
This research adopts descriptive research design. A well-structured questionnaire was used in collected data with simple random sampling technique. Forty (50) staff of the study were sampled and questionnaires administered to them. Thirty (30) questionnaires were returned and Twenty (20) were not returned.
The data collected were analyzed with basic descriptive statistics such as number of respondents and simple percentages. The core findings from the results obtained show that the internal auditing efficiency in achieving the company’s performance are effective. It also shows that the internal auditing tool in determining the ills and weak points of the company’s performance is efficient. It was recommended that there should be relative independence of the internal auditor.
TABLE OF CONTENTS
Title page……………………………………………………………………………………………………………………………………i
Declaration…………………………………………………………………………………………………………………………………ii
Dedication…………………………………………………………………………………………………………………………………iii
Acknowledgement……………………………………………………………………………………………………………………iv
Table of
contents………………………………………………………………………………………………………………………v
Abstract…………………………………………………………………………………………………………………………………….vi
CHAPTER ONE
INTRODUCTION
1.1
Background of the Study 1
1.2
Statement of the Research Problems 2
1.3
Objectives of the Study 2
1.4 Research
Hypothesis/Question 2
1.5 Scope of
the Study 3
1.6
Significance of the Study 3
1.7
Definition of the Key Terms 4
CHAPTER TWO
LITERATURE REVIEW
2.1
Introduction 5
2.2 Concept
of Auditing 5
2.2.1 An
Auditor 5
2.2.2
Selection of Auditor 6
2.2.3
Auditing Function 6
2.2.4
Internal Auditors Roles and Scope of Work 7
2.2.5
Internal Auditors Role In An Organization 7
2.2.6 The
Role of the Internal Auditing In Companies 8
2.2.7 Method
And Procure of Carrying Out Internal Audit Work 8
2.2.8
Differences Between Internal And External Audit 8
2.2.9
Internal Audit Report 9
2.3
Evaluation of Internal Control In An Organization 9
2.3.1 Types
of Internal Control 10
2.3.2
Internal Check 10
2.3.3 Types
of Internal Check 11
2.3.4
Collection And Evaluation of Evidence 11
2.3.5 Types
of Evidence 11
2.3.6 Audit
of Properties, Plant and Equipment 13
2.3.7 Audit
of An Investment 13
2.4 Company
Performance 14
2.4.1
Efficiency Procedure In Audit 14
2.4.2 The
Extent of Management of Information System 15
2.4.3 The
Level of Accounting Control 15
2.5
Professional Regulation And Regulatory Framework of An Audit 16
2.6
Theoretical Framework 16
2.7 Review
of Empirical Literature 17
CHAPTER THREE
RESEARCH METHODOLOGY
3.1
Introduction 18
3.2 Research
Design 18
3.3
Population of the Study 18
3.4 Sampling
Size and Sampling Techniques 18
3.5 Sources
and Method of Data Collection 19
3.6 Method
of Data Analysis 19
CHAPTER FOUR
DATA PRESENTATIONS ANALYSIS AND
INTERPRETATION
4.1
Introduction 20
4.2 Response
Rate of Total Questionnaire Distributed 20
4.3
Presentation of Data According Research Question 21
4.4 The
Answer to the Research Questions 27
4.5 Summary of the findings 28
CHAPTER FIVE
SUMMARY, CONCLUSION AND
RECOMMENDATIONS
5.1 Summary 29
5.2
Conclusions 29
5.3
Recommendation 30
References
Questionnaire
CHAPTER ONE
INTRODUCTION
1.1
Background of the Study
Company performance is very important if such a company wants to achieve
the purpose of its establishment without positive impact of any organization,
it means that the way of achieving the objectives when the business has
commenced will be a difficult situation for the organization.
It is obvious that the performance of companies is not up to
expectations which leads the researcher to know the impacts of the internal
auditing efficiency as a tool for improving company’s performances.
Since companies have been encountering some problems like fraud,
misappropriation of funds and properties, lack of effective management and
others that made people to be asking whether auditing plays any significant
roles towards ensuring efficiency and judicious use of funds set aside for
various purpose.
Therefore, for the proper efficient accountability, it is obvious that
the auditor and accountant will manifest their principles to be able to arrive
at what is expected of them in order to be convinced that the financial
position of the organization as presented, show a clear and fair view of the
organization.
Consequently, because of biased nature of the organization as a result
of poor investigation of the organization position, past rulers have pledged to
introduce a more responsible system of government with accountability but their
subsequent conduct has shown that they have little or no understanding
definition and application of efficiency in the improvement of company’s
performances.
Audit which is regarded as one of the recently established professions
turn out of the complexity of modern business world. It became relevant so as to discourage people
from erring and to expose those that gave wrong account of how they managed the
funds and properties under their custody.
The account or report is usually done by means of financial
statement. In order to verify the time
and fair view of this report, an independent person is needed to audit the
account such as the internal auditor and the service of a qualified accountant
for proper accountability and efficiency in the organization financial position
and performances. In a related development it has been believed that efficiency
in discovering the management inefficiency has been the root cause of many
companies poor performance both companies in private and public limited sector
in Nigeria. Improvement can only follow when what is honestly followed in been
recognized and how such wrong could be remedied. In view of this point effort
will be made to painstakingly highlight the improvement however taking auditing
efficiency and the service of a qualified accountant in respect of private
companies and public enterprises to improve the company’s performance.
1.2 Statement of the Research Problem
A company may be classified under small medium or large depending on the
size, feature of number share authorized calls issue and fully paid etc. many
companies face the problem of internal auditing efficiency such as non-compliance
with the accounting standard and non- disclosure of some fact which will guide
the auditor either the external or internal to form an opinion on the true and
fair free of the organization record. Other cooperate crime may pose a problem
in the auditing efficiency and this cooperate crime may be a serious issue.
There is many more looting in all the companies etc. the research work will
attempt to highlight on these problem areas that basically undermine auditing
efficiency in a company and give
possible solution
The following are some of the factors
challenging the functionality of the internal auditors;
- Incompetency/Negligence
of internal auditors
- Failure
to separate the Internal Audit Unit (IAU) from accounting department
- Internal
auditors involvement in fraud
- Management
involvement in fraud
- Internal
auditors independence level
- Internal
auditors' motivations/remuneration
1.3 Objectives of the Study
The main aim and objective of this study is to assess internal audit efficiency
as a tool for improving company’s performances and the specific objectives are;
i.
To
examine the extent to which the management has appraised the internal auditing
efficiency to improve company’s performance.
ii.
To
evaluate the internal auditing efficiency that has been the tools in
determining the ills and weak points in the company’s performance.
iii.
To
investigate the accounting and auditing tools in improving the efficiency of
the company’s performance.
1.4 Research Hypothesis/Research
Question
Based on the objectives of the study, the following hypothesis were
formulated;
Ho: The
internal auditing tool in determining the ills and weak point of the company
performance is not efficient?
Hi: The
internal auditing tools in examine the ills and weak point of the company
performance is efficient.
Ho: The
assessment of internal audit efficiency in achieving the company’s performance
is not effective.
Hi: The
assessment of internal audit efficiency in achieving the company’s performance
are effective.
Ho: The
investigation of accounting and audit tools are not uses to improving the
efficiency of the company’s performance
Hi: The
investigation of accounting and audit tools are uses to improving the
efficiency of the company’s performance
Q1; what
is the extent to which the management has appraised internal auditing
efficiency to improve company’s performance?
Q2; How
does the internal auditing efficiency tools been use to determine the ills and
weak points of the company’s performance?
Q3; what
is the accounting tools used to improve the efficiency of the company’s
performance?
1.5 Scope of the Study
The scope of this Study “Assessment of internal audit efficiency as a
tool for improving the company’s performance” by using the Ammasco International
Limited Kano as the case study. The research encountered some difficulties
ranging from time constraints poor response, financial constraint etc. Also it
will cover the scope of addressing the problems of internal auditors, providing
external auditors with measures in placing reliance on the work of internal
auditors and the internal control system ICS.
1.6 Significance of the Study
The research work is highly
optimistic that the completion of this research work will benefit most people
or group of people, among them are:
Students and staff in the tertiary
institution: This research work will assist both the
student in the future and even the staff in the tertiary institution will find
this research work more rewarding and educative.
The Public:
The general publics who can cross check this research work, after proper
checking will find this research work more valuable.
Professional Accountant:
The technology gamed from this research work will assist the professional accountant whose works are so
valuable.
Companies: Efficiency in auditing serves as a life wire
in any company. Therefore, most company
that are having problem pertaining to their poor performance will find this
research work more efficient and valuable.
1.7 Definition of the Key Terms
Audit: this is an examination conducted by
an auditor in order to examine the company(s) performance.
Internal audited: an element of the internal control
system set up by the management of an enterprise in order to review accounting,
financial, and operating and determine whether the prescribe policies are being
adhered to.
External auditors: take account of the work done by an
internal auditor such as letters of independence, staff resource, test mode,
and influence by the management action.
Efficiency: this is referred to the ability to
perform a duty well and produce a statistical result.
Internal assessment: is an ongoing monitoring of the
performance of the internal audit activity and periodic reviews performed
through self-assessment or by other persons organization with sufficient
knowledge of internal audit practices.
Tool: it is an instrument used in doing a
certain work or producing a certain result especially such that require
accountancy or precision.
Company: an association of persons for a
business purpose in particular which incorporated in the united kingdom under
the companies Act or by the Act of parliament or by royal charter. In Nigeria,
company is registered by a Corporate Affairs Commission Abuja and regulated by
the companies and allied matter decree 1990.
Improvement: this means to make or become better
or addition or alteration, form of repaired to better the face of an asset or
to enhance the value of anything.
Diagnosis: ascertaining, analyzing, or
determine the cause of nature of problem, situation from observation.
Performance evaluation: the easement by a superior or a
subordinate and an important part of any management control system. To evaluate
performance is necessary to decide which measure are to represent
organizational goal, how qualify, what standard is to be used, what step back
is to be taking.
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