ABSTRACT
In this study, the objectives of this research work is to ascertain the reason for assessing of evaluate the impact of internal audit function in state ministries and to find out the extent or scope to which government finance and properties are accounted for. The researcher’s motives or interest of carrying out this research work is to put right the poor efficiency and effectiveness of internal auditing function in the government offices or ministries in the state. Therefore, the method to adopt in this research work is research question. Finally, this project work will serve as an independent to finding solutions to solve some practical problems associated with auditing experience, the findings of an independent focused on internal auditing experience also bring to the fore its findings and recommendation which act as tool to offices in the state ministries to take suitable corrective actions and help in plugging the loopholes which would otherwise go undetected for a considerable period of time. Therefore, internal audit function acts as a consultant on risk and control matters.
TABLE OF CONTENT
Cover page i
Title Page ii
Approval Page iii
Acknowledgement iv
Abstract v
CHAPTER ONE: INTRODUCTION
- Background of the study 1
- Statement of problem 7
- Objective of study 9
- Research Questions 10
- Significance of the study 12
- Scope of the study 13
- Limitation of the study 14
CHAPTER TWO: REVIEW OF RELATED LITERATURE
- Historical background of internal audit in government 15
- Objective and Audit 21
- Advantage of Internal Audit 22
- Internal Control and Check 23
- The purpose of Internal Control 24
- Limitation of the Effectives Of Internal Control 32
- Function of the Internal Auditor 37
- The internal vis-à-vis the External Auditor 40
- Qualities Control Of Internal Audit 46
- Authority and Responsibility 50
- Independence 51
- Planning of Audit 53
- Component of an Audit 54
- The timing of the Audit 56
CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY
- Research Design 58
- Sample Selection 59
- Sampling Techniques 60
- Source of Data 62
- Questionnaire Design 62
- Data treatment Techniques/method of Data Analysis63
CHAPTER FOUR: DATA PRESENTAITON, ANALYSIS AND INTERPRETATION FO DATA
- Introduction 64
- Presentation of Data from Research Questionnaire 65
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
- Summary of Findings 85
- Conclusion 87
- Recommendations 88
- Suggestion for Further Studies 91
Bibliography
Appendix
Questionnaire
CHAPTER ONE
INTRODUCTION
- BACKGROUND OF THE STUDY
In many cases in Nigeria, government are faced with problem of not been accountable, not only exist in public sector but also in private sector of the economy. Due to not having a good standard internal auditor to assess the government financial statement annually. For instance in Nigeria, therefore, they cannot come together to manage their funds and resources, that is why the need for internal auditing function in the government ministries is crucial for controlling their receipts and expenditure which has resulted to the need for staging number of government clerks, accountants and auditors.
The need for control over government revenue appropriations and expenditure should not be surprising federal, state and local government which is actually the largest industry in the country. Therefore, it is necessary for efficient and effective internal auditing function in government ministries and extra – ministerial department which cannot be over emphasized as the complexity of government activities obviously. Internal auditing is an independent appraisal function established within organization to examine an organization, it is mainly concerned with appraise of government activities for the review of accounting financial and operations as a service to the management.
Internal External Auditor
A person who undertakes audit function is called an “Auditor”. Internal audit is an independent review of operation and records. Internal audit function is an organization enquires that proper accounting principles and procedures are followed by recording and evaluating transactions such as cash disbursement in the state etc. it ensures that transactions such are properly authorized valued, recorded and reconciled., all these involve monitoring and reviewing the activities of accounting department and reporting the extreme of the management. The head of the internal auditing function should be responsible to an officer whose authority is sufficient to assure both a wide range of audit findings and recommendations.
External auditor is one who examines the financial statement of an organization other than an employee of an organization but by appointment by the share holders like external audit, internal auditing had its role in accent time. Infact they had essentially the same beginning, there was no difference between them prior to the nineteenth century “Rochelle (1993:7). Both groups of auditors depend on the same data base. Also the internal users dependency is on both internal and external auditors. External auditors can sometime rely upon an internal auditor when the internal audit function is strong. Therefore internal audit function can have some effect on the broad area of independency in external auditors extermination. Therefore as an independent contractor, the external auditing firms retain the right to direct and control its own employees and free to use some methods and to expand the kind of work they do. Independent is essential to the effectiveness of internal auditing and it is obtained primarily through the organization. The organization status and objectively, inadequate independence makes internal auditor conclusion and recommendation to be biased. Although they both use the same methodology, they have different objectives when conducting its activities. The objectives of external auditor is to express an opinion in the financial statement, while the internal auditor is to assist management concerning activates assessed in the organization. Therefore this project work interest is in the internal audit function in the government activities for the review of accounting financial and operations as a service to the management. Internal auditing is more of managerial control which function by measuring and evaluating the effectiveness of other activities that is normally done by an employee. The internal audit assures existence of effective internal control in the policies established by the government.
Function of Internal Audit
- Internal audit monitor the economical and efficiency in the use of resource. It appraises the economy
- ensuring that the organizational assets safeguarded
- ensuring that information management requires is reliable and complete. This information is not only that provided by the accounting system. They review the reliability and integrity of finance information and the means used to identify measure classify and report such information
- checking for compliance with management criteria, that is compliance with policies, plans procedures, laws and regulation the internal audit review the system to ensure compliance which could have a significance impact on operation and reports. They determine whether the organization is in compliance.
- it reviews where necessary make recommendation for the improvement of system control and producers to ensure that they are both efficient and effective in the light of changing circumstances and practices.
- Acting as a training officer in internal control matters.
- conducting special investigation and other task of task as may be assigned by the management
- Auditing the information given to management particularly interim accounts and management accounting report.
- STATEMENT OF PROBLEM
Despite the obvious benefit, internal audit function brings to organization, many hindrances to internal audit efficiency exist in the private and public sector respectively. Due and appropriate recognition is not accorded to the internal audit department. The states of the Head of Department is always lower and therefore inferior to the status of the department. Heads for other department regards the head of internal audit department as subordinate officer in power, authority and responsibility. The staffing of the department is poor. In most cases, majority of the staff do not have any basic knowledge in book-keeping and accountancy. Wool still, they are not usually trained. Their performance surely cannot be satisfactory. The internal audit department is poorly funded by non-auditing officers, who are in a position of authority. The internal auditors, reports are often disregarded and no actions are taken on them, whatsoever, all the enumerated inhabiting factors above have profound adverse influences and effect on the operation and performance of internal audit function. In order to derive maximum benefits of internal audit functions, the department should be accorded on equal status with other department, properly and adequately funded staff with education, knowledgeable trained and competent personnel. This work study and ascertain the degree of existence of the problem of quality audit service rendered shortage of qualities professionals and check with respect opt established procedures and controls
- OBJECTIVE OF STUDY
The overall objective of internal auditing in ministries is to assist the government ministries and extra-ministerial department in achieving the most effective administration of the operation by providing them with objectives analysis appraisals recommendations and comment of the activates reviewed, the internal auditor is concerned with the phase of government activities. He is the “watch Dog” of the department that is primary concerned with evaluation compliance and deification and should be seen working unbiased.
The objectives of this study include the following;
- Ascertainment of the extent to which government finance and properly are accounted for and safeguarded form issues of all kind.
- Assessment of the impact of internal audit in compliance with policies plans, procedures, law, and regulation established in the system.
- Assessment of the effectiveness of the organizational operation in obtaining its objective and efficiency with which the firm’s management carried out its programme.
As general guide every member of internal audit team must be familiar with the financial instruction to memoranda tenders board rule current budgets and other related document
- RESEARCH QUESITONS
They are those questions presented or posed by the researcher for the purpose of getting answers or solutions to the problems they include:
- Does internal audit exist in your ministry?
- How often are audit functions performance in your department?
Iii. Does internal audit staff ensure that there is a proper system of making requisition and such requisition approved by a sectional or divisional heads before purchasing?
- Does your ministry work qualified trained personnel as auditors.
- Does internal audit ensure that riders placed by means of local purchase order (L.P.O) with specification official voucher and invoices checked and field correctly and mused L.P.O books kept under key and accessible to only audit raised person?
- Is there existence of periodic physical check of stores by the internal auditor
vii. Is there existence of physical inspection by the internal auditor and idea supplied are received as to qualify and quantity.
vii. How do you rate the change of the checks in your ministry?
viii. Has internal control system in your ministry reviewed from time to time to reflect changes in government?
vix. Has reviewed control system changed your working standard?
- SIGNFICANCE OF THE STUDY
This study will show the practical situation and extent to which the internal audit unit of government ministries will carry out their expected roles and duties. The study will be important to internal audit organization both private and public sectors of the economy, student and professionals in understanding what happens in practice in government functional unit. This project will be helpful in solving some practical problems associated with auditing, especially to student and any other person with little or no practical auditing experience or knowledge. It will further the treatment of what could be the possible causes of internal auditor’s incompetence and examine the possible constraints that may militate against their efficient performance. In addition, the extent of one application resource in accomplishment of establishment objectives and goals for program or operation to the management and public in advancement of internal auditing in organization.
- SCOPE OF THE STUDY
This study covers the audit unit of ministries of education and works and hosing of Enugu State. These are the departments or ministries chosen to represent to represent all the ministries in Enugu State since their operational way of doing work are relatively the same.
- LIMITATION OF THE STUDY
In this process of carrying out the research work the following limitations is inherent.
- Time: honestly time will be inadequate for a research work for this nature. That is considering the time that will be spent in gathered data during the literature review and other necessary thing that will require a lot of time.
- Cost: This include transportation cost of shuffling from one place to another of material cost which indeed is a major concept.
- Competence and extensive textbook: This is quite a big problem because textbook on this topic are personally scarce. However effort will be made to find textbook.
- The collection of the questionnaires may impose some problems as many respondents would promise different data making the work more difficult. Nevertheless booking appointment for persona interview may receive cold welcome.
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