Abstract
This examines Auditing
as a means for accountability in the public sector using Oredo Local Government
Council as the case study. The broad objective was to evaluate the extent to which
auditing helps to check or control embezzlement and misappropriation of public
funds in the public sector. To support the finding from the research
investigation, relevant literature from documented sources were reviewed. A
carefully designed questionnaire primary data was used. Sampling method,
interviews and observation were also made use of. The study has revealed that
the major problem facing the audit department is under staffing.
Recommendations revealed that to promote profitability and efficiency in the
local government, strength of the auditor should be increased by employing
qualified auditors.
TABLE OF CONTENTS
Title
Page i
Certification
ii
Dedication
iii
Acknowledgement
iv
Abstract
v
Table
of Content vi
Chapter
One: Introduction
1.1
Introduction 1
1.2
Statement of Problems 3
1.3
Research Question 4
1.4
Objective of the Study 5
1.5 Statement
of Hypotheses 5
1.6
Significance of the Study 6
1.7
Scope of the Study 7
1.8
Limitation of the Study 7
1.9
Definition of Terms 8
Chapter
Two: Review of Related Literature
2.1
Introduction 10
2.2
Government Accounting Methods 10
2.3
Auditing
and Accountability 13
2.4 Origin
of Government Auditing in Nigeria 14
2.5 Types of Audit 18
2.6 Internal
Audit and
Control in Local Government 20
2.7
Vital
Instrument of Control in the Local Government Accounting 26
2.8 Analytical
Reports of the Auditor–General of the Local Government Council excess disclosed by Statement 45
Chapter
Three: Research Method and Design
3.1
Introduction 51
3.2
Research Design 51
3.3 Description
of Population of the Study 51
3.4
Sample Size 52
3.5 Sampling Technique 52
3.6 Sources of Data Collection 52
3.7 Method of Data Presentation 53
3.8 Method
of Data
Analysis 54
Chapter Four: Data
Presentation, Analysis and Hypotheses Testing
4.1 Introduction
55
4.2 Data
Presentation and Analysis 55
4.3 Hypothesis
Testing 64
Chapter Five: Summary
of Findings, Conclusion and Recommendation
5.1 Introduction 68
5.2
Summary of Findings 68
5.3
Conclusion
68
5.4 Recommendations
69
References 71
Appendix
I 72
Appendix
II 73
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Auditing
is a challenging responsibility in the accounting profession as whole and it is
in fact developing into a profession of its own. The importance of and the
purpose of an audit in public sector can not be overemphasized.
The
study of the subject itself is both interesting and rewarding although some
have considered auditing to be not a necessary practice but merely the dull
uninteresting check of various items.
Howard
(2012) added that the contrary by means of the study of auditing, not only can
the true presentation of an organization financial position and transaction be assured;
also the overall methods of business organization and administration can be
appreciated. Auditing practice in public sector is meant to control, and check
any fraud or misappropriation of public fund or property by officers and chief
executives entrusted with such duties. It is because of the task that the Oredo
Local Government Audit department was established to appraise the work of those
entrusted with the responsibility.
In
view of the foregoing, this study aim to appraise the problem affecting it’s
efficient performance and possible suggestion to enhance it’s effectiveness.
An
auditor is someone who is charged with the responsibility of examines the book
and accounts of an organization in such a manner as to enable him to form an
independent opinion as to the trueness and fairness of the financial statement.
The
art of auditing has been defined as an “independent examination of forming an
opinion on the true and fair view of reporting entities financial statement
with special reference to engagement letter and compliance with necessary legal
and professional requirement.
The
origin of auditing is traceable to the separation of ownership from control.
The purpose of auditing is to protect the interest of the owner by ensuring the
financial statements are justified. For the owner to be satisfied, it becomes necessary
to invite an independent party who is not involved with either party, to
examine the stewardship reports for the purpose of expressing an opinion as to
the truth and fairness of the reports.
There
are two types of auditors namely: external auditor and internal Auditor. The
external auditor differs from internal auditor in the area of appointment,
scope of work reporting independence responsibility and approach to work among
others. An internal auditors is an employee of the organization who manager’s
performance he is responsible to examine and review. The scopes of his work,
appointment, promotion are determined by management and by this, the internal
auditors independence as a necessity for internal control is not quite
encourage.
1.2 Statement of Problem
There
have always been entries of poor accountability in the public service, with the
local government inclusive. Also, there have been cases of financial
mismanagement and fraudulent practices being perpetuated by some local
government councils chief executive and officers.
The
problem is the identification of the reasons for this ugly situation and why
the local government. Audit department has not been able to bring it to a half.
The Oredo Local Government Council is loaded with a lot of financial burdens
and as such cannot afford to loss most of her funds by way of fraud and
misappropriation.
This
call for proper accountability and effective, working of the machinery established
for exercising control over public funds. The role of this Audit Department
toward achieving this goal is what this research paper aims to examine.
1.3
Research
Questions
The
researcher used the following selected research question in the study:
i. How does auditing help in ensuring public
accountability?
ii. How is public expenditure controlled and
regulated statutorily.
iii. To what extent is auditing meant to control
and check any fraud or misappropriation of public fund or property.
1.4
Objective of the Study
This
study aims at identifying and evaluating the following:
i. To ascertain how auditing help in ensuring
public accountability.
ii. To determine if public expenditure is
controlled and regulated statutorily.
iii. To find out if auditing is meant to control
and check any fraud or misappropriation of public fund or property.
1.5 Statement of Hypothesis
This
research will be guided by the following hypothesis in order to achieve it’s
objectives.
HO: Auditing has not helped
towards ensuring public accountability.
HI: Auditing has helped towards ensuring public
accountability.
Hypothesis
Two
HO: Public expenditure is not being controlled
and regulated statutorily.
HI: Public expenditure is being controlled and
regulated statutorily.
Hypothesis
Three
HO: Auditing is not meant
to control and check any fraud or misappropriation of public fund or property.
HI: Auditing is meant to control and check any
fraud or misappropriation of public fund or property.
1.6 Significance of the Study
This
study is significant in the sense that it will identify the causes of fraud and
misappropriation of funds in the council and find possible solution to stop the
practice.
It
will ascertain whether auditing plays any significant role towards ensuring public
accountability or not.
It
will evaluate the role of the audit assessing the performance of each of these
departments with a view to improving the preceding data.
It
will offer useful suggestion toward the local government audit department more
effective.
1.7 Scope of the Study
In
any organization – be it private or public scope and nature of accounting may
vary depending on the extent of the operation. This is not to say, however,
that there is variation in the underling basic principle. The basic accounting
and control principles are to be highlighted throughout this research work with
reference to Oredo Local Government Council.
The
survey would include the following:
a.
A review of the primary records
b.
A review of the secondary records
c.
The effect of the statutory requirement
on the system.
The
underlying philosophy of the accounting and control system inherent weakness in
the system and suggestion of ways to addressing the weakness.
1.8 Limitations of the Study
Despite
the fact that much effort was put into this work certain constraints were
uncounted. The constraints were as follows:
a. Time:
There
was no enough time to carry out detailed investigation and research.
b. Finance:
The problem of finance made it s little difficult to carry out proper research.
c. Lack
of Information: Not all the information needed were
given.
1.9
Definition of Terms
In
this research work the following terms were used:
a. Fraud:
This
is defined by a method of illegally getting money from someone, often by using
clever and complicated methods or financial losses due to theft.
b. Misappropriate:
To
dishonestly takes something that you have been trusted to keep safe.
c. Accountability:
Having the ability to be responsible for the effect of your actions and willing
to explain or be criticized for them.
d. Fund:
An
amount of money that is collected and kept for a particular purpose, or to
provide money for an activity, organization or event.
e. Accounting
Records: This contains entries from day to day of all sums of
money received and expended by the organization and also records of the assets and liabilities of the
organization.
f. Auditor:
An
auditor is someone who is charged with responsibility of examines the books and
accounts of an organization in such a manner as to enable him to form an
independent opinion as to the trueness and fairness of the financial statement.
g. Accounting
Data: Includes journals, ledgers and other records, such
as spreadsheets, that support financial statements.
h. Adjusting
Entries: Are accounting entries made at the end of an accounting
period to allocate items.
i. Accounting
Principles: Are alternative ways of reporting and
disclosing information in financial statement and related footnotes.
j. Accounts
Receivable: Debt due from customers from sales of
product and services reported as a current asset.
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