ABSTRACT
This project titled Audit Efficiency as a tool for improving company’s performance with special emphasis on Innoson Industry Nigeria Limited Enugu is sadled with such problem as complexity of responsibility misappropriation of fund gross mismanagement and embezzlement, excess expenditure incompatible with budget and inability of audit department to indicate errors and lack of necessary cooperation. Auditors necessitated the formation of the objective of this study which intends to findout same of the reasons for deficiencies and inefficiencies in the company to establish ways to eradicating the abnormities against the application of efficient audit, as well as point to how competent the auditor have been in determining appreciation weakness in the organization. To tackled this problems, the research questions and hypothesis while formulated. The procedures and processes adopted was the descriptive research method. This method was questionnaire, oral interview, telephone conversations and observation as sources of guarding primary data. Out of a population of 648 a sample of size of 155 was drawn using Taro Yamani. This sample size was allocated to the care departments of this organization using Kumar-Sam’s of a population of 648 a sample of size of 155 was drawn using Taro Yamani. This sample size was allocated to the care departments of this organization using Kumar-Sam’s formula. The hypotheses of these researches were tested using the Z Test. The following were the research finding. This shows that record keeping and documentation is good and that staff are efficiently executing their jobs. It was also discovered that Innoson Industry Nigeria Limited based her employment on merit and due process. Auditing in Innoson is a yearly affair because it is mandated by law to audit her accounts once every year. However, internal audit is an every year affair. In conclusion, a good company, should have auditing process to improve the performance of the company.
TABLE OF CONTENTS
Title page ii
Dedication iii
Acknowledgement iv
Abstract v
Table of contents vi
CHAPTER ONE
- Introduction 1
1.1 Background of study 1
- Statement of the problem 2
- Objectives of the study 3
- Research Questions 4
- Research Hypothesis 5
- Significance of the study 6
- Scope and Limitation of the study 7
- Definition of Terms 9
CHAPTER TWO
- Review of Related Literature 11
2.1 Historical Background of Innoson Industries Nigeria 11
2.2 Historical Background of Auditing 13
2.3 Purpose of Auditing 17
2.4 Selection of Auditors 20 2.5 Audit Of Management 21
- Collection and Evaluation Evidence 22
2.7 Evaluation of Internal Control System 28
- Planning For an Auditor 47
- Internal Auditors Importance 49
- Procedure for Efficiency in Auditing 51
- Reliance on other auditors. 52
- Role Auditing In Companies 52
- Preparation of Audit Report 53
CHAPTER THREE:
3.0 Research Design and Methodology 57
- Research Design 58
3.2 Sources of data 59
- Primary sources of data 59
- Secondary sources of Data 62
- Population and sample size determination 63
3.6 Method of Investigation 66
CHAPTER FOUR:
Data Presentation, Analysis and Interpretation 68
4.1 Preliminary information 68
- Test of Hypothesis 81
CHAPTER FIVE
Summary of Findings, and Conclusions
5.1 Summary of Findings 88
- Conclusions 89
Bibliography
Appendix
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
This research work is an attempt to study auditing efficiency as a tool for improving companies performance using Innoson industries Nigeria limited as a case study. Efficiency in auditing provides means of apprising company’s performance and it helps to detect the ills and weakness of an organization and management. Audit as explained by audit operational standards is the independent examination of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevant statutory obligations. With the help of auditing knowledge, the intention is to find out the extent to which the company Innoson industries had carried out efficiency appraisal and highlighting deficiency and inefficiently which are usually believed as not existing and whether the company is efficient as it should be. But when the company grows to a greater height, volume of transaction become substantial usually with public companies. It will need to service of an accountant who is an auditor so as to be able to carryout his job more efficiently.
1.2 Statement of the Problem
It has been commonly observed that the development and performance of most companies in Nigeria is held back by co9nstrai0nts such as complexity of responsibilities, misappropriation of funds, gross mismanagement, embezzlement excess expenditure incompatible with budget, inability of audit department to detect errors and fraud, lack of necessary co-operation from auditors co-workers, inability of the audit personnel to form independent opinion and report to the approrpa5e level of management coupled with incessant fraud and defalcation have warranted that the techniques of audit should by mastered by accountants. This research work therefore attempts to highlight on these key problem areas that will undermine auditing efficiency in a company and make suggestions about their possible solutions.
1.3 Objectives of the Study
Considering the above, the research work has under taken to study the auditing efficiently as a tool for improving company performance using Innoson Industries as a case study.
- To find out some of the reasons for deficiencies and inefficiency in the company which is usually believed as not existing.
- To find out ways to eradicate the abnormalities in Innosons Industries by the application of efficient adult.
- It also intended to find out the extent to which management has appraised the operations of the organization.
- To find how competent auditors have been in determining operational weakness and ills of organizations.
1.4 Research Questions
In order to elicit information on this problems and to achieve the objectives of this study. The following research questions were formulated:
- How regular has the audit been in your company?
- How far has the paper audit helped to check or control fraud?
- How do you access the efficiency of the auditors with regards to company’s performance?
- Are audit personnel been giving the necessary co-operation by workers/
- Has there been any fraud or misappropriation of the company’s funds and property?
- Is the companies auditing efficient?
- How does the auditing efficiently help to improve the companies performance?
1.5 Research Hypotheses
In carrying out this study, the researcher intends to test hypothesis which are merely anticipated or expected relationships between or among the variables of interest. The hypothesis will be tested and conclusion arrived at a later chapter of this research.
HO: The company auditing process is not efficient
HI: The company’s auditing process is efficient
H0: Auditing efficiency is not a tool for improving company’s performance.
H2: Auditing efficiency is a tool for improving company’s performance.
1.6 Significance of the Study
Considering the above aims and objectives, there is the need to inform other users of the company’s financial information of the efficiency of audit as the tool for improving company’s performance. It helps to prevent the attainment of corporate objectives pursued. If not vigorously effective and efficiently pursued. If the company is efficiently audited. It will help the company to perform efficiently and make it to grow. Finally the study will serve as a reference joint to intending researchers and could from basis for future researchers.
1.7 Scope and Limitation of the Study
For the purpose of this research work, the researcher focused her attention on the auditing efficiently as a tool for improving company’s performance using Innoson Industries Enugu as a case study. Some circumstances beyond human control have brought some distractions to the research work, some of these inevitable circumstance are:
- Time constraint: the limited number of months given for this research to be done is less than three months and normally this is to done more than this time. The research work is combined with other academic activities in school. All these uniting factors had not allowed a through research work to the carried out effectively
- Financial constraint: another problem the researcher faced was financial constraints and these are in terms of materials, photocopying of essential materials, typing of document visitation where applicable etc.
- Lack of co-operation: finally is the lack of cop-operation with the researcher. This encountered made this research in the release of adequate information. While some staffs were not willing to give out necessary data (figures) either by ignorance of fear of exposure of such vital information.
- Lack of initial co-operation from respondent a particular limitations of work came as a result of the respondents refusal of offer their co-operation at the initial time they were contacted. This contribution in making the success of this research study difficult.
- Lack of organization and easily accessible materials work were not easily accessible as few books are available on the topic under study.
1.8 Definition of Terms
For the proper understanding of this study, the following definition of term had bee made.
- Auditing: this is process in which auditors collect and evaluate evidence to ascertain if there is a high degree of relationship between the evidence collected and financial information present by management.
- Detection; This is the art of finding or discovering the existence or essence, nature or identification of some things.
- Defalcation: This is simply misappropriation and embezzlement of money enrolled to one
- Fraud: this is the art of dishonesty, deceit, falsification and manipulations perpetrated to gain under monetary benefits.
- Investigation: this is an enquiring commission for came specific purposes stated in his letter of engagement to an investigator.
- Tools: instrument used in doing certain work. Improvement: make better it is the alternation that adds the valve of any thing.
- Efficiently: Ability to perform duties well, producing a designed result.
- Company: it means seven or more persons in the case of private company or any two or more persons associated for any lawful purpose or incorporation for a joint action especially for business.
- Management: this constitutes serious members of an organization who dictate and enforce policies and philosophies of the operation.
REFERENCES
Accounting for Contingencies “Fass Statement No. 5
(Stanford Conn 2005) P.I.
Ahwood Frank A. Nield Stem (2007), Auditing 7th Edition P.
12
Asika N. (2001), Research Methodology in the Behavioural
Science Longman Nigeria Plc
Nwabueze C.C. (2004), Basic Auditing Principles: Enugu:
Emizol Ventures
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