TABLE OF CONTENT
Page
Cover
page
Certification
Dedication
Acknowledgement
Abstract
Table
of content
CHAPTER ONE : INTRODUCTION
1.1 Background of the study
1.2 Statement of the study
1.3 Research Questions
1.4 Research
Hypothesis
1.5 Purpose of the Study
1.6 Significance of the study
1.7 Scope and limitations of the study
1.8 Definition of terms
1.9 Organization of study
CHAPTER TWO: LITERATURE REVIEW
21. Introduction
2.2 Definition and Nature of Auditing
2.3 The Meaning of Internal Auditing
2.4 The Need/Objective of Internal Audits
2.5 Qualities of an Internal Auditor
2.6 The Need/Objective of External Audits
2.7 Qualities of External Auditors
2.8 Significance of Audited Account
2.9 Code of Professional Ethics
2.10 Fraud Definition and Forms
2.11 The Detection of Fraud
2.12 Internal Auditors Role in Fraud Detection
2.13 External Auditors Role in Fraud Detection
2.14 Fraud Control and Investigation
CHAPTER THREE: METHODOLOGY
3.1 Introduction
3.2 Restatement of Research Questions
3.3 Restatement of Research Hypothesis
3.4 Research Design
3.5 Population of Study
3.6 Sample and Sampling Procedure
3.7 Data Collection Instrument
3.8 Administration of Data Collection Instrument
3.9 Procedure for Data Analysis
CHAPTER FOUR: DATA PRESENTATION/ANALYSIS
AND INTERPRETATION
4.1 Introduction
4.2 Respondent Characteristics and
Classification
4.3 Presentation and Analysis of Data According
to Research Question
4.4 Presentation and Analysis of Data According
to Research Hypotheses
4.5 Discussion of Finding
CHAPTER FIVE: SUMMARY, CONCLUSION AND
RECOMMENDATIONS
5.1 Summary of Finding
5.2 Conclusion
5.3 Recommendations
References
Questionnaire
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Both internal and external auditing is
important every organization for the control and check of employee fraud and
other irregularities. Auditing is a Latin word but when interpreted into
English, it means "He hears According to International Audit and Assurance
Standards Board (IAASB), a sub-committee of the International Federation of
Accountant (IFAC) from the above defines an audit "as an independent
examination of and expression of opinion on the financial statements of a
business enterprises by an appointed auditor in accordance with his terms of
"appointment and in compliance with relevant statutory and professional
requirements". Auditing IS also "An integrated process of
accumulating ad evaluating evidence by a competent independent person about quantifiable
information of a specific economic entity for the purpose of determining and
reporting upon the degree of correspondence between the quantifiable
information and established criteria. External auditor is a member of a
certified or chartered accountant firm whose responsibility is to form and
express a professional opinion on the accounts to be present by directors to
shareholders, while internal audit is an independent appraisal activity within
an organization for the review of operation as a service to management. It is a
managerial control which functions by measuring and evaluating the
effectiveness of other control.
Internal check has been defined as the
check on the auditing or auditor's incidental function to check and control
employee. Although, there is the management of the organization that is
responsible for installing and maintain sound internal control system which
include internal auditors and external auditors who review the system force and
audit financial statement, fraud and mismanagement are still often reported.
There have been cases of fraud arising from deliberate action in materially
misrepresenting financial result either to cover up deteriorating state of
affairs in the organization or secure an advantage for several members of
management.
The importance of reliable information and
the consequence of fraudulent representation in financial statement are:
Economic decision in every society must be based upon information available at
the time, the decision is made. For example, the decision of a bank to make a
loan to a business is based upon previous financial condition of the company as
reflected by its financial statement and other factors. If the decision is to
be consistent with the intention of the decision-makers, the information used
in the decision process must be reliable. Unreliable information can cause
inefficient use of resources to the detriment of society and the decision
makers themselves. As society becomes more complex, there is increased like
hood that un-reliable information will be provided to decision makers.
The very first audits were detailed review
of records designed to determine whether each transaction was recorded in the
proper account and in the correct amounts. The primary purpose being the
detection of defalcation and the determination of whether person in influential
position were acting and reporting responsibly.
After the industrial revolution, the scope
and complexity of business expanded greatly. As organization increased in size,
they employed large number of peoples, and the accounting system becomes more
highly developed. With an expanded accounting system and more people involved,
it was possible to segregate duties within and organization. Due to the
segregation, the function of asset custody and record keeping were separated,
and other effective internal controls were developed to protect assets, prevent
and detect defalcations. Internal auditors also become a major part of internal
control system. It was then realized that the objectives of fraud detection
could be accomplished more effectively than rough adequate system of internal
control.
1.2 STATEMENT OF THE PROBLEMS
The essence of auditing and finance system
in public establishment like in the Nigeria Police Force is to complement each
other in the effective control and check of fraud, mismanagement and other
irregularities in the organization. But the fact is that even at the
utilization of both the Nigeria Police Force, there still remain one of such
public establishment that witness a lot of fraud, mismanagement and other
irregularities. It becomes important to investigate in this study, the
effectiveness and efficiency of both internal and external auditing system in
the establishment in achieving the set objectives or the extent each has
complemented each other in the effective control and check of fraud and other
irregularities in the organization.
1.3 RESEARCH QUESTIONS
In this study then, the answers to these
relevant questions become important.
1.
How effective and efficient has been the role
of both internal and external auditing for the control and check of fraud,
mismanagement and other irregularities in Nigeria Police Force?
2.
As internal and external auditing system
enhance the achievement of the organization through control and check of
irregularities in Nigeria Police Force?
3.
To what extent has the inefficiency in the role
of both internal and external auditing negatively affected the information from
the organization's decision making?
4.
To what extent does efficiency of auditing
depend on the independence of the auditors?
5.
What are the ways through which the internal
and external auditing system could be improved?
1.4 RESEARCH HYPOTHESIS
1. HI:
Internal and external auditing systems significantly affect the
control and check of fraud and other irregularities in the Nigeria Police
Force.
H0: Internal and external auditing systems do
not significantly affect the control and check of fraud and other
irregularities III the Nigeria Police Force.
2. HI:
Transparency and accountability in the auditing process is the issue
with the accounting system in Nigeria Police Force.
H0: Transparency and accountability in the
auditing process IS not the issue with the accounting system in Nigeria Police
Force.
3. HI:
Mismanagement of funds in the accounting system is the main problem
that hinders the effectiveness of auditing system in Nigeria Police Force.
H0: Mismanagement
of funds in the accounting system is not the main
problem that hinders the effectiveness of auditing system in Nigeria
Police Force.
1.5
PURPOSE OF STUDY
The aim or purpose of this study or
research is the following:
1.
To determine the nature of relationship between
the role of auditing and the control and check of fraud irregularities in
Nigeria Police Force.
2.
To appraise the effectiveness and efficiency of
internal and external auditing system, in complementing each other in the
control and check of fraud and other irregularities in the Police Force.
3.
To determine whether there is a positive and
significant relationship between proper auditing and organizational performance
or achievement of the set objective in the Nigeria Police.
4.
To know the extent, inefficiency in both
internal and external auditing have negatively affected the information
received in an organization, hence in decision making.
5. To recommend more ways of imposing the
role of auditing in the control and check of fraud in Nigeria organization and
ministries.
1.6 SIGNIFICANCE OF THE STUDY
Every now and then, we hear cases of fraud
and other irregularities being reported in both private and public sector like
the Nigeria Police Force. But no doubt, the effectiveness and efficiency of
both internal and external auditing in there establishment could significantly
control and check there irregularities in these organization. This study then
becomes beneficial and relevant in the following ways:
1.
This study would identify the efficiency of the
role of internal and external auditing in many organizations including Nigeria
Police Force.
2.
It would also assist in determining the extent
internal and external auditing systems in the Nigeria Police have complemented
each other in enhancing the performance of the establishments.
3.
This study would expose whether internal and
external auditing systems have enhanced the quality of informational gotten
from Nigeria Police Force.
4.
This study will .also reveal whether lack of proper internal and external
auditor's moral is negatively and significantly hindering the efficiency of
auditing in the organization.
1.7 SCOPE AND LIMITATION OF
THE STUDY
This study will be restricted to the
Nigeria Police Force. It embraces the impact of internal and external auditors
in fraud detection.
This research work is not without some
constraints and limitations. Gathering of the research materials in different
libraries is one of the problems encounter by this constraint, the researcher
could not travel to all the known avenues for research materials and
information. Finally, some of the respondents made it difficult for certain
information gathered through the administered questionnaire and oral interview.
However, despite this constraining factor, this study is expected to accomplish
its main objectives.
1.8 DEFINITION OF TERMS
Auditing: The
systematic investigation and appraisal of transactions, procedures operations
and resulting.
Internal Auditing: An
Independent appraisal activity within an organization conducted by internal
auditors for the review of financial and other operations to determine if they
accurately and honestly reflect the condition of the organization.
External Auditor: Is
employee of a certified or chartered accountant firm whose responsibility is to
form and express a professional opinion on the accounts to be presented by
directors to the shareholders.
Fraud: Is
defined as an acts committed with intent to deceive involving either
misappropriation of assets or misrepresentation of financial statement either
to conceal misappropriation of assets or for other purpose, by such means as:
(a) Manipulation, falsification or
alteration of documents
(b)
Suppression of information, transaction or document
(c)
Recording of transaction without substance
(d) Misapplication of accounting
principles.
Irregularities: Financial
irregularity takes place when a person engages in falsification of accounting records, circumvention of internal
accounting control system or other deliberate acts resulting in inaccurate book
and records.
Error: Is an
unintentional mistake in financial statement and includes mathematical or
clerical mistake in the underlying records and accounting data from which the
financial statements were prepared.
1.9 ORGANISATION OF STUDY
Finance and Auditing are very important in
public organization especially in Nigeria Police Force for the control and
check of employee fraud and other irregularities. These irregularities if left
unchecked could hamper the progress of any of our Public enterprises.
Chapter One of this work introduced the
background of this work, the significance of the study as well as the scope and
limitations of auditing in the Nigeria Police Force.
Chapter Two critically reviewed various
literatures in both the internal and external auditing as applied in this work.
Chapter Three discusses the research
method and design as employed in this work.
Chapter Four analyzed the data presented
from the research questions while chapter five is the concluding chapter with
some recommendation made.
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