Abstract
This research work examines the influence of
statutory audit on SMEs growth and survival in Nigeria. Audit plays a significant
role in growth and survival of small scale business. The research deals with
the problems auditors encountered during the audit of small scale business to
enable them ascertain that their statement of affairs shows a true and fair
view. Questionnaires, personal and oral interview were used to collect data.
The data collected through the research tools were analyzed using percentage
and chi-square (X2) were used to test the hypotheses. The result
reveals that some small scale business do not keep good accounting or records
of transaction. The study concludes that small scale business can do well if
their accounting system is streamlined to meet the standard accounting system
procedures and practice. Based on the findings, the study recommends amongst
others that the government should encourage these small scale businesses by
giving them reasonable amount of years when they will not be required to pay
tax.
TABLE OF CONTENTS
Title
Page i
Certification
ii
Dedication
iii
Acknowledgements
iv
Abstract
v
Table
of Contents vi
Chapter One:
Introduction
1.1
Background to the Study 1
1.2
Statement of Problems 3
1.3
Research Questions 4
1.4
Objectives of the Study 5
1.5
Statement of Hypothesis(es) 5
1.6
Significance of the Study 6
1.7
Scope of the Study 7
1.8
Limitation of the Study 7
1.9
Definition of Terms 8
Chapter
Two: Review of Related
Literature
2.1
Introduction 10
2.2 Concept
of Auditing 11
2.3
Types of Audit 14
2.3.1
Statutory Audit 15
2.3.2
Private Audit 15
2.3.3
Internal Audit 15
2.3.4
Management Audit 16
2.4
Objectives of Auditing 18
2.5
Audit
Approach 20
2.6
Audit
Evidence 25
2.7 The Role
of an
Auditor 27
2.8 The Nigeria Small-Scale Business 31
2.9
Types of Small Scale Business 37
2.10 Role of Small Business 38
2.11 Application
of Auditing Standard to Small
Scale Business 41
2.12 Problems
with the Audit of Small Scale Business 43
Chapter
Three: Research Method and Design
3.1
Introduction 48
3.2
Research Design 48
3.3
Description of Population of the Study 49
3.4
Sample Size 49
3.5
Sampling Techniques 49
3.6
Sources of Data Collection 50
3.7
Method of Data Presentation 51
3.8
Method of Data Analysis 51
Chapter
Four: Data Presentation, Analysis and Interpretation
4.1 Introduction 53
4.2 Data Presentation 53
4.3 Data Analysis 54
4.4 Hypothesis Testing 70
Chapter
Five: Summary of Findings, Conclusion and Recommendations
5.1
Introduction 74
5.2 Summary of Findings 74
5.3
Conclusion 76
5.4
Recommendations 77
References
79
Appendix
I 81
Appendix
II 82
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Auditing,
as it exist today was established as a result of the separation of ownership
from the control of business. The owners entrusted their business to managers
and the owners are then presented with a stewardship accounting. This
stewardship
accounting is usually done by means of financial statement. The financial
statement is in form of profit and loss account and the balance sheet of the
business.
In
these circumstances, the need arise for some means by which the accounts presented
to them by their managers can be relied upon of error in advertently made.
It
was for this reason therefore that the practiced is to verify on behalf of the
owners. Obviously it is impracticable and impossible for the owner of business
to examine the books and records of the business. The owner appoint auditor to
act for them. Auditing is an examination by an independent expert i.e. the
auditor to act for them. Auditing is an examination by an independent expert
i.e. the auditor of a set of financial statements and of the underlying books
and records which result in the auditors providing an opinion on the financial
statement.
Auditors
concerned themselves primarily with the proof of accuracy of Client’s records,
utilizing evidence available within the confines of the business. The
subsequent growth of the demand for reliable financial information by third
parties supplying credit or capital to expand enterprises, auditors turned to
the examination of financial statement. Here the external evidence to
corroborate company figure increased in importance is still important auditors
recognize that the accounting system that produces the financial and operating
information to be reported is a key factor in the accuracy and reliability of the results.
Since
it is not mandatory that all forms of business must prepare and submit annual
statement of accounts. This write-up is to assess the problems encountered by
the auditor in assessing the books of accounts, of small scale business in
Nigeria and the problems and prospect of these business of accounts audited
annually.
This
research work examines the auditing of small scale business, problems and
prospects with. This became relevant because small scale industry is a catalyst
towards economic growth in developing countries such as Nigeria.
1.2
Statement of
Problem
It
was noted that the operating transaction used by small scale business often
differ significantly from those of large companies.
Some
small-scale business do not keep good accounting system or records of
transaction, they did it out of ignorance. Many proprietors do not know the
amount of pro lit he is making and whether he could do better and by how much
the problem is attributed to the qualification and exposure of the proprietors.
The
research has shown that only few of proprietors contribute to the fund of
initial capital. Most entrepreneur of small scale business is aversive to audit
their accounts because of the cost and other sees it as a way of probing into
their privacy.
Most
of these small scale business lack controls over the running activities of
their business organization. Their activities are run haphazardly. Since most
of’ mall scale business do not audit their accounts they don’t pay tax to the
government, even few that pay tax, pay it out their direction and not their
profit. Personal interview with auditors from two accounting firms visited
revealed that accounts business could be adopted, the small scale business
inclusive irrespective of the non-maintenance of proper accounting records.
1.3 Research
Questions
The
purpose of this study is to provide solution to the following problems faced in
auditing small scale business.
i. Are proper books of accounts been kept?
ii. To what extend has the accounts of SMEs
prepared in accordance to standard and CAMA 1990?
iii. Is the internal control system of the
entities effective for the auditor to make an opinion?
iv. What are the educational qualifications of
persons in charge of preparing the SMEs account?
1.4 Objective
of the Study
The
following are the objectives of the study;
i. To know if there is proper books of
account been kept.
ii. To determine the extent at which the
accounts of SMEs are prepared in accordance to standards and CAMA 1990.
iii. To find out if the internal control system
of the entities effective and can be relied upon by the auditor.
iv. To examine their educational qualification
of the person in charge of preparing the SMEs account.
1.5 Statement
of Hypotheses
For
the purpose of this study, the researcher has developed the hypotheses which
will be tested in the subsequent chapter; the hypotheses are as follows;
Hypothesis
One
HO: SMEs do not maintain
proper books of account.
HI: SMEs maintain proper
books of account.
Hypothesis
Two
HO: The account prepared in
SMEs are not in accordance with standard and CAMA 1990.
HI: The account prepared in
SMEs are in accordance with accounting standard and CAMA 1990.
Hypothesis Three
HO: There is no significant
relationship between internal control system in place in SMEs and audit.
HI: There is significant
relationship between internal control system in place in SMEs and audit.
Hypothesis Four
HO: The person in charge of
preparing the SMEs account does not have the educational qualification.
HI: The person in charge of
preparing the SMEs account has the educational qualification.
1.6 Significance
of the Study
In
regard to the relevance of this topic, the influence of statutory audit on SMEs
growth and survival, the study covers areas which are useful.
1. It will expose users of this research work
on the problems of auditing small scale business.
2. The contribution of the small-scale
industry to the industrialization of the economy.
3. It may also disclose avenue that will
necessitate further research.
1.7
Scope of the Study
This study is restricted to the
influence of statutory audit on SMEs
growth and survival in Nigeria. The investigate cover between 2010 and 2013 (4
years financial year’s of the case study). Nosakhare
Bakery is used as the case study of the project and the study covers Nosakhare
Bakery in Edo State.
1.8 Limitations of the Study
The researcher in the course of this
study encountered a lot of problems, which are discussed
below:
a. Attitude
of
Respondents: It was difficult for the researcher of the constant information
as a result of the constant
inability of stall and management to give us adequate attention due to much responsibility and work
load at the time we needed their assistance.
b. Financial Constraint: A
lot of money was Spent in looking for materials for this
research aid this further compounded the researcher’s financial problems.
1.9
Definition of Terms
Auditing:
This
is the independent examination of the expression of opinion on the financial statement of an enterprise by an
appointed auditor in pursuance of that appointment in compliance with any
relevant statutory obligation (UK Audit Practice Committee).
Internal
Control: This
is as the whole of controls, financial or otherwise, established by the
management in other wise, established by the management in order to carry out the
business of the enterprise in an orderly and efficient manners, ensure
adherence to
managements, policies safeguard other assets and secure as far as possible the
completeness and accuracy of records (APC Guidelines).
Auditor: An auditor is a competent
accountant, who examines accounting hooks and record with a view to expressing in opinion there in.
Errors:
They are unintentional mistakes in the financial statement. Frauds: They are
intentional misstatement in or omissions of amount in the accounting records or
financial statements.
Financial
Statement: Are the profit or loss account
and the balance sheet of the business.
Working
Papers: These
are documents the auditor used to record his work during the process of auditing
the client’s accounting records.
Buyers has the right to create
dispute within seven (7) days of purchase for 100% refund request when
you experience issue with the file received.
Dispute can only be created when
you receive a corrupt file, a wrong file or irregularities in the table of
contents and content of the file you received.
ProjectShelve.com shall either
provide the appropriate file within 48hrs or
send refund excluding your bank transaction charges. Term and
Conditions are applied.
Buyers are expected to confirm
that the material you are paying for is available on our website
ProjectShelve.com and you have selected the right material, you have also gone
through the preliminary pages and it interests you before payment. DO NOT MAKE
BANK PAYMENT IF YOUR TOPIC IS NOT ON THE WEBSITE.
In case of payment for a
material not available on ProjectShelve.com, the management of
ProjectShelve.com has the right to keep your money until you send a topic that
is available on our website within 48 hours.
You cannot change topic after
receiving material of the topic you ordered and paid for.
Login To Comment