ABSTRACT
The subject of this research investigation is “The
Role of Internal Auditor and the method of Internal Control in Local Government
in Enugu state specifically.
The objective of the study is to know whether the function of the internal
audit department are performed in compliance with the established standards and
policies and how much it have succeeded in achieving the objectives of the
local government. The methods of data collection were interviews, direct
observation and study of secondary materials. In analyzing the data collected,
percentage and some formulated hypothesis were used. The major findings of this
study are: That Udi Local Government Area has an Internal audit department,
that internal auditing helps to know how well the policies of the management
are executed, that the duties of the internal control be performed by either
the accounts division or the external auditor who must be statutorily appointed,
that all the internal auditors of the local government report to the auditor
general, through the executive chairman of the local government area. The researcher
hereby recommends that internal auditing should be employed in local
governments, because it will help immensely in management control.
TABLE OF CONTENTS
Title page
Approval page………………………………………………..………………i
Dedication …………………………………………………………..………ii
Acknowledgement………………………………………….………………iii
Abstract……………………………………………………………..………iv
Table of contents……………………………………………………….……v
CHAPTER ONE: INTRODUCTION
1.1
Background of the study ……………………………..………………1
1.2
Statement of problem…………………………………………………2
1.3
Objective of the study…………………………………...……………2
1.4
Research questions……………………………………………………3
1.5
Research hypothesis……………………………………………..……3
1.6
Significance of the study………………………………………..……4
1.7
Scope of the study……………………………………………….……5
1.8
Limitation of the study…………………………………………..……5
1.9
Definition of terms……………………………………………....……6
CHAPTER TWO
2.1
Introduction……………………………………………………...……8
2.2
Theoretical framework………………………………………..…..…11
2.3
Current Literature review………………………………………..…12
2.4
Summary of Literature review…………………………..……..……34
CHAPTER THREE: RESEARCH DESIGN AND METHODS
3.1
Research design……………………………..……………………….39
3.2
Area of the study……………………………………………….……39
3.3
Population of the study……………………………………..……….39
3.4
Sampling method…………………………………………..…..……39
3.5
Research Instruments…………………………………………..……40
3.6
Validity and Reliability of research Instruments……………………40
3.7
Sources of data………………………………………………..……41
3.8
Method of investigation. …………………………………..…..……42
CHAPTER FOUR: ANALYSIS OF DATA PRESENTATION
4.1
Data presentation and Interpretation…………………………...……43
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
5.1
Summary of findings ………………………………………………50
5.2
Conclusion …………………………………………...………..……50
5.3
Recommendation ………………………………….…………..……52
References……………………………..……………………….……55
Appendix A ……………………………..…………….…………….56
Appendix B………………………………………………...…..……57
Questionnaire
………………………………………...………..……58
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
OF THE STUDY:
The
new civil services move with designed to make the service more functional
professional, productive and responsive to the socio-economic needs of the
nation. The federal government has also recently revamped and restructured the
local government system to enable it perform its role of promoting, co-ordinating
and implementing community services enhancing citizens participation and
maximizing the use of local resources. Enormous amount of money of flowing to
the local government form the federation account ( ), the of the state internally generated
revenue and the revenue of the local government.
The
federal government of Nigeria
came up with a financial instruction in 1979, instructing all local government
to set up internal audit unit in each local government. But the behaviour and
attitude of operation of local government system resulted in many local
government not setting up internal audit unit or if set up. They were not
functional. The federal government in 1988 set in motion a real ware of change.
A real frame work of internal auditing in the local government was spelt out in
order to make it less difficult for management of the local government as the
greatest contributing factor to the poor performances of local government.
1.2 STATEMENT
OF THE PROBLEM:
The
local government has three broad sources of revenue, they include: direct from
the federation’s account, of internally generated revenue of the state
government and revenue generated internally by the local government her self.
The internal sources available to the local government area include: rents from
market stores, royalties paid by some residents company in a local government
contractors registration, sales of car/bus emblems, etc.
Since
the local government has a whole lot of possible sources of revenue, the
problems therefore include,
a) How can efficient management controls be
achieved?
b) What is the role of internal auditing in
ensuring this control?
c) How can
the internal auditing be made a useful tool management control?
1.3 OBJECTIVE
OF THE STUDY:
a) The
researcher intends to find out, the role of auditors and the method of internal
control in local government.
b) Whether
the function of the internal audit department are performed in compliance with
the established standards and policies and how much it has succeeded in
achieving the objective of the local government.
c) In the
end, the researcher shall establish some acceptable benefit that may be derived
from effective audit control system
1.4 RESEARCH QUESTIONS:
a) Do Udi
Local government Area have an internal audit department?
b) If
internal auditing helps to know how the polices of management were executed?
c) Can the
duties of the internal auditor be performed by either the accounts division or
the external auditor who must be statutory?
d) Do all
the internal auditors of the local government area report to the auditor
general, through the executive chairman of their local government area?
1.5 RESEARCH HYPOTHESIS:
In the research work, the following hypothesis were
formulated, tested and analysed in solving the research problem.
Ho: The
internal audit department helps the accounting system of the local government.
Hi: The
internal audit department does not help the accounting system of the local
government.
Ho: The
internal audit department does not help to prevent fraud and improve revenue
position.
Hi: The
internal audit department helps to prevent fraud and improve revenue position.
Ho: Reporting
to the auditor general, through the executive chairman of the local government
makes the internal auditor perform his fiduciary duties diligently.
Hi: Reporting
to the auditor general, through the executive chairman of the local government
makes the internal auditor not to perform his fiduciary duties diligently.
1.6 SIGNIFICANCE OF THE STUDY:
This
research is on attempt to survey the constructive parts, which internal
auditing can play in the local government system in Nigeria with particular reference
to Udi Local government Area of Enugu State.
A
lot of problems are facing the local government area as not having an effective
audit central system one of these problems is the management seems to gloss
over the operation of the local government, which are carried out in
disorganized manner. The researcher was motivated to choose this topic because
of his belief that if management of Udi local government, an efficient
management which is pre-requisite for high productivity will be assured.
This
is so because an efficient control system will enable the management to monitor
the performances of the executives and take necessary and adequate corrective
actions to ensure high performances of the executive and take necessary and
adequate corrective actions, to ensure high performances at all levels.
1.7 SCOPE OF THE STUDY:
The
scope of the study is limited to Udi local government area of Enugu state. This is because of the limited
time available for the researcher for the submission of the report and the
financial involvement of the scope is further widened. Furthermore, from the related
literature review, it was observed that there were enough bases for
generalizing the result of the study.
1.8 LIMITATION
OF THE STUDY
The
study has been limited by a number of factors notable among the limitations was
our people’s poor reaction to research questions and reading meaning into any
attempt at any form of interview.
One of the
vital documents needed for this investigation could not be supplied because it
was audited account for 2007 and 2008 financial year. The last audited account
was in 1988.
It took researcher much effort to
convince some respondent, that he is not in anyway trying to find out the well
or otherwise they are carrying out their work.
Capital Restrains: This research cost the
researcher capital transport fares, buying of materials and browsing the
internet to obtain more points.
Ignorance: Most of the respondents were
ignorant of giving out information demanded by the researcher, they were
ignorant of the research purpose and though it will be used for negative
reasons.
Evasion of privacy: Some of the questions that
was asked in this study appeared to be evading the privacy of the respondents,
for this reason, the researcher did not get all the cooperation he requires in
order to conduct a good research
1.9 DEFINITION
OF TERMS
LOCAL GOVERNMENT: A local government is a form
of public administration which in a majority of contexts, exists as the lowest
tier of administrator within a given state (Wikipedia).
EMBEZZLEMENT: This is an act of dishonesty
withholding assets for the purpose of conversion (theft) of such assets, by one
or more person to whom the assets were entrusted, either to be held or to be
used for specific purposes.
APPRAISAL: A valuation of property (i.e.,
real estate, a business, an antique) by the estimate of an authorized person.
In order to be a valid appraisal the authorized person will have a designation
form a regulatory body governing the jurisdiction the appraiser operates
within.
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