Abstract
This
research work is designed to achieve the specific objective of examining the
role played by Auditors in the protection of public funds in the government
owned establishments, ministries or government parastatals. The research goes
into providing a systematic financial accountability that will promote proper
stewardship for asset, deter wastes, dishonesty and promote effectiveness.
However, the literature review helped to ascertain other writers’ views
concerning the subject under study which explains how government owned
establishments are organized such that fraud could be detected easily and in
time just because particular audits are assigned to particular personnel. The
data used for this work was collected from primary source, using questionnaire.
Against the background, invaluable and reliable discoveries were made. Finally the
research recommends that the legislative of government should make it mandatory
for the accountant general to submit financial statement of government account
to audit department for audit work. Auditors should be given power to
execute or enforce its finding after its work has been review by the public
account committee.
TABLE OF
CONTENTS
Title
Page i
Certification ii
Dedication iii
Acknowledgement iv
Abstract v
Chapter One: Introduction 1
1.1 Background to the Study 1
1.2 Statement of Problem 3
1.3 Research Questions 4
1.4 Objectives of the Study 4
1.5 Statement of Hypothesis 5
1.6 Significance of the Study 5
1.7 Scope of the Study 6
1.8 Limitations of the Study 7
Chapter
Two: Review of Related
Literature 8
2.1 Introduction 8
2.2 Fraud 12
2.3 Auditing in Nigeria 16
2.4 Conduct of an Auditor 18
2.5 Auditors Rule in Controlling Fraud 21
2.6 Auditor and His Contribution towards
Efficient Management of Government owned
Establishment 26
Chapter Three: Research Method and Design 34
3.1 Introduction 34
3.2 Research Design 34
3.3 Description of Population of the Study 35
3.4 Sample Size 35
3.5 Sampling Technique 37
3.6 Sources of Data Collection 38
3.7 Method of Data Presentation and Analysis 39
Chapter
Four: Data Presentation,
Analysis
and Interpretation 41
4.1 Introduction 41
4.2 Data Presentation and Analysis 41
4.3 Hypothesis Testing 51
Chapter
Five: Summary of Findings,
Conclusion
and Recommendations 58
5.1 Introduction 58
5.2 Summary of Findings 58
5.3 Conclusion 61
5.4 Recommendations 62
References 66
Appendix A 69
Appendix B 70
Appendix C 71
CHAPTER ONE
INTRODUCTION
1.1
Background to the Study
There is a general
awareness all over the world for the need to pay greater attention to the
improvement of government establishment. The reason is obvious, government
constitutes the largest single business entity and her pattern of expenditure
through its various parastatals, agencies and commission stimulate lot of
economic activities. As a result of these government huge involvement in
economic activities, initiatives are being taken all over the world toward
improvement of the standard of account and auditing department in government.
The public sector accounting has the responsibility of developing systematic
arrangement to assist management in the performance of the services of the
constitution. While the public sector auditor has among other duties, the
complementary role to examine whether management actually performed
efficiently.
The public sector
auditor has to satisfy himself that the account presented have been prepared in
accordance with statutory and constitutional requirement and regulation and
that the proper accounting practice have been observed in their complication
with the growing sized and complexity of public sector in the recent years. The
importance of the statutory auditor has correspondingly increase so that it is
today a major factor in establishing the quality of public sector internal
control and its development has made a considerable contribution to the
improvement of the government establishment.
The purpose of this
research is to investigate the effectiveness of a statutory auditor in fraud
management in government establishment using Federal Pay Office Benin City as
my case study.
1.2
Statement of Problem
Most organization and
individual employ the service of an external auditor in order to comply with
the legal requirement of the act. They may be unaware of the usefulness of the
auditor to the organization and as a result of the ignorance, the auditor is
bound to encounter some inherent problem in performing his duties properly.
To put an end to the
problem, the auditor on his own extra care, from an independent opinions which
can be wholly relied upon by the financial statement users.
Therefore as regard the
corporation under the study, the examination of the following problems are
considered worthwhile and thus deserve an adequate attention.
·
Lack of
understanding of the purpose of auditing among the society in general.
·
Lack of a well
defined goal oriented policies aimed at building up a strong and sound
financial system.
·
Inability for
the government owned establishment to maintain a sound system of internal
control.
1.3
Research Questions
The following research
questions were formulated by the researcher for the conduct of this project:
1.
To what extent
do frauds affect economic development of the country?
2.
To what extent have fraud and
mis-appropriation of public fund and properties persisted in the government
establishment?
3.
How regular is audit work supposed to be
carried out in government establishment?
1.4
Objectives of the Study
The objectives of this
study are as follows:
1. To find out how frauds affect economic
development of the country.
2. To examine the extent of fraud and
mis-appropriation of public fund and properties persisted in the government
establishment.
3. To ascertain how regular audit work are
carried out in government establishment.
1.5
Statement of Hypothesis
The following
hypothesis will guide this study:
Hypothesis One
Ho: The Auditor does not play effective and efficient
role in managing fraud in government owned establishment.
HI: The Auditor play effective and efficient role in
managing fraud in government owned establishment.
Hypothesis
Two
Ho: The total amount
involved in fraud has no effect on the development of Nigerian economy.
Hi: The total amount
involved in fraud has affected on the development of Nigerian economy.
1.6
Significance of the Study
The significance of
this study is that, it will teach the inherent disabilities and limitation of
auditing in government owned establishment. It is expected that the result of
this study will help improve financial reporting by government owned
establishment providing annual reports in accordance with the requirement of Audit
Acts, 1990.
The significance of the
study to the society in general is to correct the wrong notion on the wealth of
government.
It is significant to
the government in ensuring that standard in the ministry manual of
responsibilities and procedures are maintained.
It is important to the
Auditor by showing to them the risk that confronts the auditors in his/her
duties, the legal action that could be taken against the auditor if he/she
deficit in his duty.
Finally, it is expected
that this study will serve as a reference point to future researchers.
1.7
Scope of the Study
There is the need for
the statutory auditor to be effective so as to create improvement in the
government parastatals. Positive improvement in the public sector will
definitely benefit the citizens of the Nigerian nation. The research was based
mainly on the Federal Paid Office Benin
City. Decision and conclusions were only based on the
views expressed by respondents and special investigation was conducted in
addition.
1.8
Limitation of the Study
The factors that tend
to hinder the scope of this study include:
Reluctant
attitude of Respondents: The researcher
work was equally saddled with the problem of the reluctant attitude of
respondents who found it difficult to avail the researcher with information
necessary for the work for fear of exposition.
Distance:
Long distance or appropriate place
of interest to obtain relevant information was a problem encountered.
1.9 Definition of Terms
Fraud: This
is the action or an instance of deceiving somebody in order to make money or
obtain goods illegally.
Detection:
The act of discovering or the fact of being discovered.
Protection:
This is the action of stopping something from happening or arising.
Role:
According to the Oxford Advanced Learners Dictionary, role is defined as the
function or position that somebody has or is expected to have in an
organization.
Role mode:
The degree to which somebody is involved in a situation.
Accounting:
By the American Accounting Association is defined as the process of
identifying, measuring, classifying and communicating economy information to
permit informed judgement and decision by users of the information. It should
therefore be noted that there are three classes of accounting which include the
following;
Financial accounting:
This can be defined as a systematic identification, measuring, classifying,
summarizing, communication and interpreting of financial information so as to
enable stakeholders to have stewardship report and make investment decisions.
Management accounting:
This is defined as the application of professional knowledge and skill in the
preparation of accounting information in such a way as to assist management in
the formulation of policies and planning and controlling of the operations of
the undertaking.
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