TABLE CONTENT
Title page i
Certification ii
Dedication iii
Acknowledgement iv
Table of content vii
CHAPTER ONE
INTRODUCTION
1.0
Background of the study
1.1
Statement of the study
1.2
Justification of the study
1.3
Objective of the study
1.4
Statement of hypothesis
1.5
Scope of the study
1.6
Significance of the study
1.7
Plan of the study
1.8
Definition of the study
CHAPTER
TWO
LITERATURE
REVIEW
2.0
Introduction
2.1
Concept of auditing
2.2
Type of auditing
2.3
Scope of audit in manufacturing
companies
2.4
Internal audit in manufacturing companies
2.5
Impact of audit on the management of
manufacturing company
CHAPTER THREE
RESEARCH
METHODOLOGY
3.0
Historical background of heritage pure
water
3.1
Introduction
3.2
Research design
3.3
Types of data and method of data
collection
3.4
Research instrument
3.5
Research instruction
3.6
Method of data analysis
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.0
Introduction.
4.1
Analysis of data
4.2
Hypothesis testing
4.3
Interpretation result
CHAPTER FIVE
SUMMARY,
CONCLUSION AND RECOMMENDATION
5.1 Summary
5.2 Conclusion
Recommendation
Bibliography
CHAPTER ONE
INTRODUCTION
1.0 BACKGROUND OF THE STUDY
Company or organizations take a unique
position in an economic setting by virtue of their position in terms of goods
and services. The growing complexities in the organizations have necessitated
the need for a functional and effective internal audit before the ultimate
statutory audit. This is because of the incessant reports of frauds and misappropriation
of fund in manufacturing Companies.
The
origin of auditing emanates from the separation ownership from control; in
spite of this it become necessary for the manager entrusted with the financial
and economics of business to present their financial report to the employers.
Auditing
is viewed from one of the primary means by which accountability can be ensured
to the financial statement.
Auditing, according to Walter (1970), is
therefore said to be such an examination of books and accounts and vouchers of
a business, as it will enable the auditor to express his opinion as to whether
the balance sheet is properly drawn up, so as to give a true and fair view of the
state of affairs of the business and that the profit and loss account give a
true and fair view as the profit and
loss for the financial period according to the best of information and
explanation given to him and as shown by the books to report otherwise if not
satisfied.
Professional auditing grow and developed
in England, whose first organized accounting body was formed in Nigeria, the
institute of chartered Accounting of Nigeria {ICAN} was established by the act
of parliament number 15 of 1 September 1965. Then, the idea was sold by Mr.
Herbart keeling a qualified accountant who was visiting Nigeria as a delegate
sent by British council on a specific assignment. The vision comes into reality
that an association known as accountants of Nigeria was formed. The association
was incorporated on November 17,1960. There is the need for auditing in
manufacturing companies so that financial control can be carried out.
Internal auditing therefore can be
defined as an independent appraisal of activity within an organization, for the
review of operation as services to management. It is a management controls
which function by measuring and evaluating the effectiveness of other controls.
Hence, internal auditing as a process
can thus, be seen as a review of the accounting and internal control system of
an enterprises in order to highlight their weakness to management so that
correction can be effected appropriately and promptly.
This
research work is to contribute to the understanding that to ascertain whether
internal auditing is appropriate as a management tool and to also promote the
understanding that the primary objective of the internal auditor is not to
detect frauds or error, but if in the process of audit the auditor detects any
error or frauds he/she is to report to the appropriate authority usually the
management as bound by the professionals.
1.1 STATEMENT
OF RESEARCH PROBLEM
In any organization, private or public
the impact of internal auditing are desire, important as it can positively or
negatively effect the effectiveness in any organization of company is the check
and control issue so that fraud and irregularities can be at lost minimized.
In manufacturing industries case of
fraud and mismanagement of frauds by the serving public official managers,
e.t.c soon to have gone unnoticed despite the fact that periodic audit exercise
is being carried out. So, to stop minimize fraud or mismanagement of fund in
any manufacturing company, the service of an auditor is greatly needed. This
will increase the strength of the company and also their level of productivity
will increase.
Can audit be relied on as a check
against fraudulent act? And if so, is the environment conductive for the
performance of their duties i.e the auditor.
These questions are what brought about
the issue of how effectively and efficiency is the internal auditor evaluating
the internal control of the organization to ensure the efficient management of
manufacturing companies.
1.2 JUSTIFICATION
FOR THE STUDY
This
research work is justified as it provides answer for the evaluation of the role
of national audit in the company to see and test its ability of compliance with
policies, law, procedures and regulation.
To
evaluate its effectiveness in checking the security and extent to which assist
of the company is safeguarded.
In
addition, this study will be useful to the following group: student, companies
and educational setting would benefit from this study; in such a way that it
serves as a basis in their related research topic, giving recommendation to
companies especially manufacturing companies. It will also enable the audit
department of an organization to detect the position lapses that must have
existed in the system and for corrective actions to taken when and where
necessary.
1.3 OBJECTIVE
OF THE STUDY
The
main objective of this study is to access and evaluate the impact of internal
auditing in the Nigeria manufacturing industries in achieving organization
goals. The following sub objectives will also be pursued.
i.
To evaluate whether proper records are
kept by the various department and serves as sources data for auditing.
ii. To
evaluate the role played by the internal auditor or department in achieving
organization goal.
1.4 STATEMENT
OF HYPOTHESIS
In
order to provide solution to the research problems identified above, the
following hypothesis would be tested.
Ho:
effective internal control is a yardstick for measuring organization
efficiency.
Hi:
effective internal control is not a yardstick for measuring organization
efficiency.
1.5 SCOPE
OF THE STUDY
The
project which talk about impact of internal audit in Nigeria manufacturing
industries limit it scope to only manufacturing industries as the industrial
scope so as to be able to carry out a compressive work and it will be
practically in possible to cover all the industries in Nigeria. Heritage pure
water industries is also choose as the case study the geographical scope is the
Ilorin plant of the company and time scope for the work is limited to three to
four month.
1.6 SIGNIFICANT
OF THE STUDY
The
project intends to show the impact of internal audit in Nigeria manufacturing
industries. It will enable people to know more about the roles of internal
auditing department.
This
study will also expose the research to the real life solution of knowing the
internal auditing of the organization.
The
significance of this research to the researcher is for the award of High
National Diploma in accountancy, also to the company, it helps them to detect
any kind of fraud as early as possible. It is also significant to the general
public as the know the financial history of any organization before having any
transactions with them, and to the government, it help them to detect any
fraudulent act or staff at any point in time and it help in the making of
policy to regulate the activities of internal auditors. The place of accounting
structure, the level control exercised by accounting, the cash line between
accounting department and other department in an organization and the problem
faced by the accountant in the periodically preparing their financial statement
and offer possible solution to the problem.
Also,
the study will be helpful to the management and scholars in accounting
profession, who might be interested in carrying out further research on the
topic and who do the update this knowledge with it.
1.7 PLAN
OF THE STUDY
This
research work is organized into (5) five chapters:-
Chapter
one covers the background to the study which include, introduction of the
study, statement of the study, justification for the study, scope of the study
significance of the study, statement of hypothesis and definition of the terms.
Chapter
two covers the review and related literature with the aim of highlighting some
of the major area of the subject matter.
Chapter
three is the research methodology with the exposition of some theoretical frame
work.
Finally,
chapter four is used to illustrated data presentation and analysis while
chapter five covers the summary conclusion and recommendation bases on the
findings of the study.
1.8 DEFINITION OF TERMINOLOGIES
The
term audit is derived from a latin word “Audit meaning to hear” Audit as
defined by audits practical committee (APC) as the independent examination and
expression of opinion of the financial statement of an enterprises by an
appointed auditor in pursuance of that appointment and in compliance with
statutory obligation.
AUDITOR
An
auditor is a person who audits the accounting record of a company or
organization. He is also refers to as an independent third party who audit the
financial statement of an organization reports to show the truth and fairness
of the account.
INTERNAL AUDIT
This
is an independent appraisal of activity within an organization for the review
of accounting financial and other operating as a basis of services to
management.
AUDIT REPORT
This
an end product of every audit exercises. It is a short statement expressing the
view of the auditors that the accounts show a true and fair view and company
with statutory role and regulation.
INTERNAL CONTROL
It
is the whole system of control, both financial and otherwise which established
by management to safeguard the asset and in adherence to policies and
directions.
AUDIT EVIDENCE
These
are all the information obtained by the auditor during the course of this audit
assignment and on which he base his opinion on the financial statement (Adams,
2002)
INTERNAL CHECK
This
method of organizing the entire operation of office factory and warehouse and
the duties of the respective staff so that fraud and irregularities are almost
impossible without conclusion.
INVESTIGATION
An
examination of the affair of a company or any organization for some special
purpose
ERROR
Errors
are generally agreed in audit as an international misstates. It makes clients
account unreliable and if it predominately occurs, it can affect the truth and
fairness of the accounts.
FRAUD
It
is one irregularity involving the use of criminal description to obtain an
unjust advantage such as stating store value higher than normal.
IRREGULARITIES
These
are practice contrary to the profession or ethical standards (Longman, 2002).
EFFICIENCY
To
ensure that mismanagement, misappropriate is reduced to their dearest minimum.
EFFECTIVENESS
To
confirm that policy expenses on is popular (safe association limited; 1999)
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