ABSTRACT
The purpose of this project is to identify and analyses
internal audit as a control for effective management in Nigeria public
enterprise.
Primary data was generated through the administration of
Ninety five questionnaires (95), Ninety (90) of the questionnaires were
returned and fully computed. Secondary data was collected through textbook,
journal and library research.
Responses from the questionnaires were classified
accordingly. Frequency and contingency tables were constructed and the
hypotheses were tested using chi-square X2 test statistics.
The result of the analysis shows that internal audit
control has positive effect on Nigeria public enterprises.
TABLE OF CORTENTS
CIIAPTER INRODUCTION
1.1 Background of the study
1.2 Statement of problems
1.3 Purpose of the study
1.4 Significance of the study
1.5 Research Question
1.6 Research Hypothesis
1.7 Scope of the study
1.8 Limitations of the study
1.9 Operational Definitions of Terms
CHAPTER TWO:
LITERATURE REVIEW
2.1 Introduction
2.2 The internal auditor/external auditor
2.3 Organization of internal audit department
2.4 Reasons for establishment of public
enterprises
2.5 Characteristics of the Nigeria public
enterprises
2.6 Role of internal
audit on fraud prevention and detection
2.7 Advantages of auditing
2.8 Disadvantages of auditing
2.9 The cause of auditing failure
2.10 Historical background of the case study
2.11 Objectives of LSDPC as a public enterprise
2.12 Management of LSDPC as public enterprises
2.13 Management of performance evaluation in LSDPC page
2.14 Internal
auditing in LSDPC
2.15
Objectives of internal audit in LSDPC
2.16 Internal
adult department of LSDPC
2.17 Duties of internal control department of LSDPC
2.18 Duties of internal auditors in LSDPC
CHAPTER
THREE:
RESAERCH
METHODOLOGY AND DESIGN
3.1 Introduction
3.2 Restatement of research questions
3.3 Restatement of research hypotheses
3.4 The study of population
3.5 Sampling technique and size
3.6 Research instruments
3.7 Method of data collection
3.8 Method of data analysis
CHAPTER
FOUR:
PRESENTATION
AND ANALYSIS OF DATA
4.1 Introduction
4.2 Analysis of data
4.3 Test of hypotheses
CHAPTER
FIVE:
SUMMARY,
CONCLUSION AND RECOMMENDATION
5.1 Introduction
5.2 Summary
5.3 Conclusions
5.4 Recommendations
5.6 Suggestions for further studies
References
Appendices
CBAPTER
ONE
IRTRODUCTI0N
1.1 BACKGROUND TO THE STUDY
All over the world, auditing has been a major catalyst
which aids an effective and efficient accountability as well as transparency of
the public enterprise. Due to the large volume or task of the disposal of the
public servant in the public enterprise, there is need for a well-defined
auditing system.
Auditing can be defined as an independent examination of
an expression of opinion on the financial statement of an enterprise by an
appointed auditor in accordance with the term of engagement and in compliance
with statutory obligations and other professional requirements.
Again auditing according to Badmus Olusesan and Elegbede
David (2003) can be defined as the process carried out by suitably qualified
auditors whereby the accounting records of the business entity including
charities, trust, professional firm etc. are subjected to examination in such a
detail as to enable the auditor form an opinion and to their truth fairness and
accuracy.
Control system is very essential in any organization be it
a private or a public establishment in order to check how effective and
efficient they are maximizing the use of resources. One of the measures
commonly used to minimize wastage and guide plans to their eventual accomplishment
is the internal auditing.
Embarrassment, misappropriation, fraud and also wastage of
resources have highly been characteristics of government ministries and public
enterprises.
Despite the fact that there are installed control and
check of resources, embezzlement and fraud of resources misappropriation of
funds, errors, irregularities and mistake still find their way into the
enterprise. This seem a common phenomenon in Nigeria with regard to public
funds that the perpetrators of such act often attempt to cover themselves by
burning documents that are likely to expose them, destroying bills collected
that is not recorded. Other fraudulent acts such as lack of a well-established
accounting system and internal control in the public enterprise lead to
inefficient management and the wider effect will be perpetual under development
of the nation.
Internal audit department was established to reduce those
excesses however, in Nigeria public enterprises this is not so, as there are series
of problem which has been hindered in the internal audit efficiency.
1.2 STATEMENT OF
THE PROBLEM
Ogunjimi (2001) while writing on accountability m the
Nigerian public enterprise observed that the involvement of the government in
economic and social expect of the national development, public enterprises now
play a vital role is the developmental processed since those public enterprise
handle a high preparation of government
funds proper account of stewardship are needed, it is also important to note
that established controls to ensure proper accounts of operation have been
grossly abused by lack of accountability on the performance of such enterprise
of public fund, fraud and gross wastage resources are still the order of the
day in the public enterprise.
Therefore the internal audit department exists so as to
reduce the exercise-financial mismanagement and also the lack of proper
accountability to the barest minimum. Internal audit which is supposed to serve
as a control tool sometimes becomes inefficient due to some inbuilt factor that
impair it independence and that thus hinder its efficiently.
1.3 PURPOSED OF THE STUDY
Internal audit which is meant to serve as a control tool
has failed due to some factors impair on its independent and thus hinders its
effectiveness and efficiency. Therefore, the purpose of the study is as follow:
·
Identify the factors
that hinder internal audit efficiency in Lagos State Development and Property
corporation (LSDPC) as a public enterprises
·
Reduce excesses of
the internal auditing department of LSDPC
·
Identify problems
and accountability in LSDPC
·
Examine the factors
that hinder internal audit efficiency and how these factors are impinged. It
shapes up performance of management.
1.4
SIGNIFICANCE THE STUDY
This research work on internal audit as a control for
efficient management in Nigeria public enterprise will be a great importance
because it will aim at ensuring that it will help at contributing towards
academy knowledge by adding to or increasing the frontier of knowledge as well
as helping to solve the problem related to the kind aimed at improving internal
audit in the public sector. It also helps government institution so as to know
the best form of internal auditing system to practice. More so, this research
work will be very useful for solving the problem arising from the auditing need
of the society most especially in the public enterprise.
Also this, study will make insight into the deficiencies
in the current internal audit practices and will therefore be useful to those
who are at the helm of affairs in the country. This study will also discredit
the belief of some people that internal audit is not necessary in the public
enterprise. Finally it is hope that this study will serve as a launching pad
for researchers who may like to carryout research on similar area of study.
1.5 RESEARCH
QUESTIONS
This is a major determination to the success of this
research work.
These are specific question addressing the dimension of
the statement of problem as stated earlier. These research questions are:
·
What factors hinder
internal audit efficiency in Nigeria public enterprise?
·
Does good internal
audit practice improve managerial performance in Nigerian public enterprise?
·
Why have the
established controls failed to enhance the managerial performance in the
Nigeria public enterprise?
·
To what impact is
internal auditing to organizations performance?
·
What is the effect
of the past internal auditing system in the public sector?
·
Does internal audit
help management to keep proper control of its activities and responsibilities?
1.6 RESEARCH HYPOTHESES
By hypothesis, it simply means a statement that has not
been subjected to test. Hypothesis is always of two types namely:
i) Ho:
Null Hypothesis (Negative)
ii) H1: Alternative hypothesis
(positive)
It should be noted that it is the Ho
that is subjected to test since it is the
negative hypothesis. Whenever the Ho is
rejected the Hi must be accepted and
vice-versa.
In accordance with the research question raised m 1.6, the
following hypothesis were postulated and tested.
HYPOTHESIS 1
Ho:
There
is no significant relationship between internal audit practice and the
managerial performance of public enterprise.
Hi:
There
is significant relationship between internal audit practice and the managerial performance
of public enterprise.
HYPOTHBSIS 2
Ho: Efficient
internal control does not give internal management / confidence on its
activities.
Hi:
Efficient
internal control gives internal management confidence on its activities.
1.7 SCOPE OF THB
STUDY
By scope of the study, it simply means the area of
coverage of which I aimed at working upon in this research work. This scope of
this study on internal audit as a control for efficient management in Nigeria
public enterprise on Lagos State Development and Property Corporation (LSDPC), but will also cover some related
policies that are formulated to internal audit in Nigeria particularly Lagos
state in focus. It will be viewing the entire internal audit making process in
Nigeria as wen as the problem associated with it in relation to its efficient
management in Nigerian public enterprises.
1.8
LIMITATIONS OF THE STUDY
This research work on internal audit as a control for
efficient management in Nigerian public enterprises as the following limitation
to this study may include;
i.
Respondent
Attitude: Some of the respondent officials
of LSDPC may be skeptical and afraid. of releasing vital information about the
company due to the fact that they know the true intention of the research.
ii.
Time
Constraint: The period under
which the study is to be carried out is relatively short. To source for data
and interviewing the staffs.
iii. Finance: The
study will be limited by inadequate funds.
Funds are needed for transportation, photocopying of
materials and typing the funds are not forth coming.
iv. Epileptic
Power Supply: Insufficient power
supply in the country also imposed some limitation to the study by causing inadequate
access to internet facilities.
1.9 DEFINITION OF
TERMS
For proper understanding of this research works the
following concepts of terms will be briefly defined.
1. Management: The process of
planning, organizing, leading and controlling the efforts of organization
member and of using all other organizational resources to achieve stated
organization goals.
2. Internal Check: This is
the allocation of authority and 'work in such a manner as to afford check on
the routine day-to-day work by means of the work of one person being proved
independently by another in the work of one person being complementary to that
of another.
3.
IDterna1 Control:
This- is defined as not only internal check and internal audit but the whole
system of control, financial and otherwise established by the management in
order to carry on the business of the company in an orderly manner and
efficient manner, safeguarding its assets and secure as far as possible the
completeness and accuracy of records.
4.
Control:
This is the power to exert influence on others in order to achieve a specific
purpose.
5.
Internal Audit:
According to Adeniyi A. Adeniji internal audit is an independent appraisal unit
established by the management of an organization for the review of internal control
system as a service to the organization, in which its objective examines,
evaluates and report on the adequacy of the
internal control as a contribution to the proper economic, efficient and
effective use of resources.
6.
Internal Audit:
According to America Accountant (AAA), Auditing is a
systematic process of objectively obtaining and evaluating evidence regarding
assertions about economic actions and events to ascertain the degree of
correspondence between the assertions and established criteria and
communicating the results to interested users.
7.
Public Enterprise: The United Nations defined public enterprise as an
incorporated enterprise in which public authorities hold a majority of the
share and/ or can exercise control over management decision controlled.
Also according to NN Malaya "public enterprises are
autonomous or semi-autonomous corporation and companies establish owned and
controlled by the state and engaged in industrial undertakings.
8.
External Audit:
This is an audit carried out by independent person who are
not in the environment of the enterprise. The principal purpose of such an
audit is to report on the truth and fairness of the view shown by the financial
statements of the enterprise.
9.
Interim Audit: It is
a practice where by an audit is conducted to an agreed date within the
accounting period. The period covered may be a few month half year etc. however
certain audit work are remove deferred until the year-end some forms
substantive test.
10. Final Audit:
This is an audit carried out after the year-end date when
the financial statements of the business have been prepared by management.
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