The project examines the influence of internal
auditor on the total quality management in a business enterprise. The study’s
main objective is to find out if total quality management really exist in
integrated data service limited and also to find out if total quality
management influence the functions of the internal audit department. The
primary source of data collection was used in gathering data from respondents.
A structure questionnaire was designed by the researcher and validity by two
experts from the statistics department was used to obtain data, Chi-Square (X2)
was used to test hypotheses formulated. It was discovered that there is
positive effect on the nature of work in total quality management. The study
concludes that total quality management is not just another management theory
at its discovery stage but a practiced strategy which many surviving conscious
organizations around the globe and of course Nigeria has adopted as a survival
strategy. Based on the findings, the study recommends amongst others that all
the staffs in the company should be trained to enable them participate fully in
the implementation of Total Quality Management. Also, further training should
be granted to all staff to enable them understand their role on Total Quality
of Contents vi
Chapter One: Introduction 1
1.1 Background to the Study 1
1.2 Statement of Problem 3
1.3 Objectives of the Study 4
1.4 Research Questions 5
1.5 Statement of Hypothesis(es) 6
1.6 Scope of the Study 7
1.7 Significance of the Study 7
1.8 Limitations of the Study 8
1.9 Definition of terms 9
Two: Review of Related Literature
2.1 Introduction 11
2.2 Definition of Total Quality Management (TQM) 12
2.3 An Overview of Total Quality Management 13
2.3.1 Goals of Total Quality
Management (TQM) 14
2.3.2 Objectives of Total
quality Management 14
2.3.3 Critical Success Factors for Total Quality Management Cooper (2001) 15
2.4 Criticism and Barriers to the Implementation
of Total quality Management (Paul 2010) 16
2.5 Quality 18
2.5.1 Overview of Quality 19
Customer (Liu: 2006) 20
2.7 Traditional Functions of Audit 22
of the Internal Audit 23
2.9 Scope of
Audit Functions 24
2.10 Role of the
Internal Auditors 24
2.11 Total Quality Management in Integrated Data
Service Limited (IDSL) 27
Three: Research Method and Design 29
3.1 Introduction 29
3.2 Research Design 29
3.3 Description of Population of the Study 30
3.4 Sample Size 30
3.5 Sampling Techniques 30
3.6 Sources of Data Collection 31
3.7 Methods of Data Presentation 32
3.8 Methods of Data Analysis 32
Four: Data Presentation, Analysis and Interpretation 34
4.2 Presentation of Data 34
4.3 Data Analysis 34
4.4 Hypothesis Testing 41
Five: Summary of Findings, Conclusion and
5.1 Introduction 46
5.2 Summary of Findings 46
5.3 Conclusion 47
5.4 Recommendations 48
Background to the Study
Owners who appoint
managers to look after their properties will want to know what has happened to
They are not usually
pleased when there is a negative report. A famous example of this was in the
Holy Bible, the gospel according to St. Matthew chapter 25, when the rich man
went on a journey and delivered his goods to his servants to account for the
goods with which he has been entrusted. He was not pleased with the servant who
had not profitably used the goods he has managed in his absence.
A major problem which
has always existed between managers and owners is that when managers report to
owners, do owners believe the report? The report may contain error or failure
of the manager to disclose some relevant information. Hence the solution to
this problem of credibility in reports and account lies in appointing an
independent person called the auditor to give a fair report.
The requirements of the
auditors are enhanced by the internal auditor appointed by management to view
the internal controls and checks within the organization to ensure conformity
with policies and procedures laid down by management.
The complete absence in
Total Quality Management (TQM) in the internal auditor accountant produced in Nigeria
institution has created a great vacuum in the various process of an
organization to ensure the quality of
its products. However, the TQM is management approach to long term success
through customer satisfaction.
Management is defined as a continuous meeting agreed customer requirement at
the lowest cost by releasing the potentials of all employees (Total Quality
Management International 1995).
No gain saying that the
quality in goods and services has become a pre-requisite for survival in an
increasingly competitive market place around the globe.
A united company
“McDonald” for years, its theme has been quality, service, cleanliness and
values. In Nigeria
today, organizations like Chevron, Agip, Shell, Nigeria National Petroleum
Company (NNPC) who are survival conscious have operating total quality
management (Adebayo, 1966).
In view of the above,
the internal auditor in total quality management environment should be a
champion and facilitator rather than a police. He should assist management to
focus in functional excellence not territory safe keeping. The auditor should
audit and test of process effectiveness and efficiency and provide an
independent assessment of quality improvement activities (Nixon, 2002).
Statement of Problem
Since the inception of
the Total Quality Management (TQM), the role of the internal auditors in theses
companies need to be examined and checked because the idea of Total Quality
Management placed a new demand upon the performance measurement and reporting
structure of the traditional auditing system, for example, in a Total Quality
Management (TQM) environment, the internal auditor examines records that the
accountant prepare i.e. if there is any error or fraud on what he has examined
based on his opinion. They also assist management in forming opinion on a cost
efficient in a business enterprise. Internal auditors often assist management
in performing internal review assignments covering, for example human
resources, procurement (purchasing), marketing and treasury activities, such
review include; identification of risk, the identification of control systems
and procedure implemented to manage those risks, to evaluate the overall
effectiveness of the design and operation of controls in managing the risk identified
and to test control to ensure that the internal controls are operating
i. Does Total Quality Management really exist
in Integrated Data Service Limited (IDSL)?
ii. Does the introduction of Total Quality
Management influence the functions of the internal audit department?
iii. To what extent have Total Quality Management
affected the functions of the internal auditors?
iv. Did Total Quality Management (TQM) affect
your pattern of workers compared to what it was before?
v. Where new demands made on the internal
auditing functions with the introduction of Total Quality Management (TQM)?
vi. Where staff in the internal audit department
sent for training or retraining with the introduction of Total Quality
Objective of the Study
i. To find out if Total Quality Management
really exist in Integrated Data Service Limited (IDSL).
ii. To find out if Total Quality Management
influence the functions of the internal audit department.
iii. To find out if total quality management
affects the functions of the internal audit.
iv. To evaluate if the Total Quality Management
affect your pattern of work as compared to what it was before.
v. To find out if new demands made on the
internal auditing function with the introduction of Total Quality Management.
vi. To find out if staff in the internal audit
department sent for training or retraining with the introduction of Total
Statement of Hypotheses
In view of the above
stated objectives, it is important that the following hypotheses are
HO: Total Quality Management (TQM) has a negative effect
on the pattern of work.
HI: Total Quality Management (TQM) has a positive effect
on the pattern of work.
HO: There are no 21st century challenges on
Total Quality management (TQM) in Integrated Data Service Limited.
HI: There are 21st century challenges on
Total Quality Management (TQM) in Integrated Data Service Limited.
Significance of the Study
The significance of
this study on the role of internal auditor in Total Quality Management is as
i. It will provide basis for qualitative
management in the sphere of government.
ii. It will
serve as reference material for future researcher.
iii. It will provide a basis for the enforcement
of regular placement of companies.
iv. It will enhance the reliability to be placed
on prepared financial statements of corporate organization.
Scope of the Study
Due to not sufficient
time and financial constraint and for the fact that the company is based on
Nigeria and the result obtain cover a period of five years from 2009 – 2013.
In order to ease the
problem of internal auditor of the firm, it should be noted that there are many
factors which affect qualitative management other than the role and dividend
policy. However it is recognized that some of the accountants may be
characterized by different accounting policies and in some cases window
dressing. All these must therefore be born in mind when drawing conclusion and
influence from the result of this study.
Also for the sake of
simplicity and proper analysis a number of assumption are made in this study.
They are as follows;
a. That the information supplied by the firm
in this questionnaire and their published account are accurate and correct.
b. The internal audit risks are assumed not to
be constant and they are the same in the entire firm.
This study was carried
out using Benin City branch of IDSL though its
headquarter is in Lagos
and a sample size of 60 was used for effective result.
Limitations of the Study
In the course of this
study, the researcher encountered a lot of problem to contend with which
militated against the smooth course of the study. Following limiting factors
i. Since Total Quality Management (TQM) is a
new era of k knowledge there was constraining factors like books, journals and
constraint: There was actually no adequate time available for the researcher in
the course of this project work for the fact that the work was carried out in
the midst of moral lectures, tests and exams.
Definition of Terms
Internal Audit: Internal
audit can be defined as audit carried out by employees of an enterprise who are
specially assigned by management to conduct a review of the accounting and
internal control systems and to make recommendations to management on how to
improve the system (Institute of Internal Auditors, 1998).
Internal Control Represent: All such techniques, policies rules and procedures
which the management of an organization has developed for its day to day
operations. It is the effective and efficient way of managing the affairs of an
organization that leads to the birth of Total Quality Management (TQM).
Total Quality Management: A critical look on the word Total Quality Management
(TQM) applies to quality at all levels, all employees, all functions,
processes, input, output, all supplies and customers. Quality in Total Quality
Management (TQM) is meeting concrete demands, expectations and desire e.g.
attitude, behaviour, credibility, consistency etc which they reduce error,
waste, re-warps and scraps.