ABSTRACT
An audit of financial statement is
an exercise whose objective is to enable auditor express an opinion on the
account presented by management at the end of the years on whether on his
opinion the account show true and fair view or otherwise.
Internal control is the whole system of control, financial
and other wise established by government to evaluate and checkmate the
activities of the organization at every point in time.
For effective research work the researcher made use of secondary and
primary data ,The primary sources of information include response from the
respondents through the use of personal interview and questionnaire .the main
objective of this research work is To
identify the causes of fraud in public parastatals And To examine how audit could help in the
prevention and control of fraud.
TABLE
OF CONTENTS
Title page …………………………………………………i
Certification ………………………………………………ii
Dedication…………………………………………………iii
Acknowledgement ………………………………………..iv
Abstract…………………………………………………….v
Table of content …………………………………………..iv
Chapter one
1.0
Introduction…………………………………………………1
1.1 Background of the study……………………………..1
1.2 Statement
of problem…………………………………3
1.3
Objective of the study……………………………….3
1.4
Research question…………………………………..4
1.5
Research hypothesis………………………………..5
1.6
Significance of the study……………………………5
1.7
Scope of the study……………………………………6
1.8
Limitation of the study……………………………….6
1.9
Definition of terms……………………………………7
Chapter two
2.0
Literature review…………………………………………….8
2.1
Introduction …………………………………………..8
2.2
The organs of auditing ……………………………..9
2.3
Definition of Auditing ………………………………10
2.4
The need for an audit ……………………………..12
2.5
Objective of auditing ……………………………….13
Chapter three
3.0
Introduction …………………………………………………14
3.1
Research design…………………………………….14
3.2
Population of study …………………………………15
3.3
Sampling techniques………………………………..15
3.4
Data collection procedure …………………………15
3.5
Data analysis techniques……………………………16
Chapter four
4.0
The
research instrument ………………………………..17
4.1
Data presentation …………………………………...17
4.2
Analysis of data………………………………………18
4.3
Discussion of finding ………………………………
Chapter five
5.0
Summary ,Conclusion ,Recommendation,………...
5.1
Summary ……………………………………………33
5.2
Recommendation
…………………………………34
5.3
Conclusion ………………………………………….36
Bibliography………………………………………..38
Appendix
i…………………………………………..40
Appendix
ii………………………………………….41
CHAPTERONE
1.0
INTORDUCTION
1.1 BACKGROUND OF THE STUDY
The substance of every economic
entity depends on its ability to achieve its goal and objectives management for
the achievement of corporate goals. Wither or not management will achievement
this goal depends on how strong and reliable the growth of any corporate body
largely depends on the effectiveness and efficient of the internal control
system.
Therefore management has a duty of or
ensuring that a strong and reliable control system exists within the
organization for accountability and country.
For accountability within the
organization the conduct at audit is mentionable. This is because account
prepared by management may not disclose fraud deliberately misleading or failed
to confirm to regulations. Therefore the necessary of auditing to cooperative
organization cannot be overemphasized as thus will help the safeguard of the
assets of the organization by detection and prevention of all kind of
misappropriation and fraud within the organization. Over the years business and
corporate organizations run into problems of liquidation. Bankruptcy and
insolvency as a result of not only economic fact in the business environment
but as a result of management in adequate and inefficient to mange. The
internal activities of the organization therefore creating room for financial
malpractice within the organization. Thus many corporate bodies run into
liquidation as a result of fraud and misappropriation of funds (working
capital) within the organization. These are funds that are supposed to be used
for expansion of business activities.
Thus, auditing as a professional
activity is to birch the gaps and lapses of management activities and to repent
to the owner of business on the financial position of the business.
According to the American Accounting
Association (AAA) committee on basic Auditing concept (1971), auditing and
evaluating process of objectively obtaining and evaluating evidence regarding
assertions about economic actions and events o ascertain the degree of
corresponding between those assertion and establishment to interested users.
The Nigeria auditing guidance sees auditing as an independent tax the appointed
and or in pursuance of his appointment and in compliance within any relevant
statutory obligations.
From the above, it is clear that
despite need of auditing by management within the organization, government also
requires the account are audit annually before they publisher. However there
are two objective of auditing in any corporate entity, the primary and
secondary objects, the projective of auditing require the auditor to give
report on this opinion on account investigated.
1.2 STATEMENT OF THE PROBLEM
In our present business environment
the news of insolvency, bankruptcy and liquidation have become frequency news
handling in magazines. Several factors are responsible for those ugly issues.
The issue of liquidation is not only attributed to the business environment bur
internal management problems. Therefore the following problems are identified
1)
The
issue of forgery of public fund for personal interest.
2)
Lack
of sense of responsibility and other forms of social values.
3)
Low
level of official awareness.
4)
Weakness
of internal control system to monitor the activities of management.
1.3 PURPOSE/OBJECTIVE OF THE STUDY
At the end of this study. The following objectives are expected to be
achieved.
1)
To
identify the causes of fraud in public parastatals
2)
To
examine how audit could help in the prevention and control of fraud.
3)
To
examine the existence of internal control system in the organization
1.4 RESEARCH QUESTIONS.
1)
What
role can auditing play in the eradication minimization of fraud?
2)
Does
this company have internal auditors?
3)
Does
this company have external auditor(s)?
4)
Do
the company allow the internal auditor(s)
freehand to perform his function
5)
How
does your company perceive auditing?
6)
Do
you think fraud can draw this company liquidation?
7)
Does
your company allow external auditor(s) freehand to perform their function?
8)
Has fraud know to have taken place on suspected
on this company
9)
What
type of fraud was suspected in the company
10)
Are
all daily expenditure authorized and accounted for by concerned authorities?
11)
Does
internal audit department check all sources and application of fund?
12)
Do
you think audit can prevent the suspected fraud in your company?
13)
Are
there any checks and balances in the administration and management of the
company?
14)
Is
the internal audit department independent?
1.5 RESEARCH HYPOTHESIS
Hypothesis is a prediction or conjecture state well in advance of
observation about what can be expected to occur induce stated or given
condition Asika (2004)
This research work “audit as a tool for prevention and control of fund”
will be tested in the process of the research analysis as follows
H1: there is a significant relationship between audit and the prevention
and control of fraud
H2: there is no significant relationship between audit and the prevention
and control of fraud.
1.6 SIGNIFICANCE OF THE STUDY
This study will go a long way helping all corporate to organization on
the possibilities and consequence of financial recklessness and
misappropriation of fund in business and probably the solution to
ineffectiveness in the management firms.
Secondly, this study is significant because focused on corporate bodies
which are the bedrock of every economy at large, this granting the continuity
of corporate entities.
The study will encourage management to review and establish strategies to
achieve maximum efficiency and effectiveness in order to bring about the
desired return to contributors (shareholder).
Finally, this study, by using auditing as a tool, for prevention of fraud
will help to ensure accountability, reliability and discipline within the
management of companies in Nigeria.
1.7 SCOPE OF THE STUDY
The research works was carried out in yenagoa capital city of bayelsa
state, Nigeria. The scope of this research work is limited to companies operating
in yenagoa within effective reference to scripan nig Ltd.
However, the study will cover relevant areas such as auditing, fraud prevention,
detection and control of fraud in the management of companies operating in
Nigeria.
1.8 LIMITATION OF STUDY
This research is focused on the lack of adequate books and research
inertial or the school library.
The company under study is at a consideration distance from the research
institution. Hence distance problem, another glaring limitation here is financial
constraint in carrying out the study.
However, an optimum balance of application scarce resources is maintained
in carrying out the study.
1.9 DEFINITION OF TERMS
Audit: An audit of financial statement is
an exercise whose objective is to enable auditor express an opinion on the
account presented by management at the end of the years on whether on his
opinion the account show true and fair view or otherwise.
Internal control system: Internal control is the whole system
of control, financial and other wise established by government to evaluate and
checkmate the activities of the organization at every point in time.
External auditing(s) These are set of professionally
qualified auditors (Accountancy that members of ICAN /ANAN) who are not members
of the organization, appointed by the shareholder/ directors to audit the
financial statement prepared by management.
Error: This is an un-intentional mistake in
financial statement book of account.
Fraud: This is an intentional act to
falsely misrepresent the true state of monetary transaction as fund in the
books of account.
Irregularities; this is an intentional distortion of financial statement
or book of account often accompanied by the false files and record.
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