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The research centered on External audit as a tool for improving public corporations and parastatals, the Nigerian Communication Commission as a case study. The main objective that guided this study was to check if there are financial irregularities in the company and whether the internal audit department is discharging its responsibilities effectively. In realizing its objective, the study has employed a case study design which has provided the opportunity to such techniques as questionnaires and observations in the data collection process. The target population of this study targeted the KTC employees who formed 43 respondents. The data obtained in this research provided descriptive statistics and narrations. The study also used a Single Factor Analysis of Variance (ANOVA) to determine the relationship between the independent variables and the dependent variable. The study found that management support had the greatest effect to the external audit operation as an instrument towards improving the Nigerian Communication Commission (NCC). The study recommends that in order for the corporation to be effective in its operation and service delivery it needs to pay attention to the contribution of external auditing on its operations.


Title Page





Table of Contents


1.1       Background to the study

1.2       Statement of the problem

1.3       Objective of the study

1.3.1    General objective

1.3.2    Specific objectives

1.4       Research Question

1.5       Research Hypothesis

1.6       Scope of the study

1.7       Significance of the study

1.8       Definition of operational terms


2.1       Introduction

2.2       Conceptual framework

2.2.1    Concept of Auditing

2.2.2    External audit: As it is understood

2.2.3    Objective of Auditing

2.2.4    Qualities of an Auditor

2.2.5    Qualification of an Auditor

2.2.6    Internal Control and Internal Check

2.2.7    Appointment of an external auditor

2.2.8    Purpose of external audit

2.2.9    Purposes of Auditing System in a Public Sector Management

2.2.10  What is involved?

2.2.11  what the auditor need

2.2.12  Rights and Duties of an Auditor

2.2.13  Independence

2.2.14  Audit report

2.3       Theoretical Framework

2.3.1    Nature of Government Parastatals

2.3.2    Auditing Government Corporations

2.3.3    The Need for Effectiveness and Efficiency in Government Audit

2.3.4    Effectiveness of Nigerian Communication Commission (NCC) Auditing

2.3.5    Independent Variables

2.3.6    Legal Basis of Government Accounting

2.3.7    Fraud in Government Parastatals

2.3.8    Corporate irregularities

2.4       Empirical framework

2.5       Conceptual Model/Summary of review


3.1       Introduction

3.2       Research design

3.3       Population of the study

3.4       Sample size determination

3.5       Method of Data Collection

3.5.1    Research instrument

3.5.2    Reliability & validity Test

3.6       Method of data analysis

3.7       Research Model


4.1       Introduction

4.2       Presentation of Results

4.3       Discussion of Results


5.1       Summary

5.1.1    Factors that strengthen External Audit in NCC

5.1.2    Factors that Weaken External Audit in NCC

5.2       Conclusion

5.3       Recommendation






  • Background to the study

There is general awareness all over the world for the need to pay greater attention to the improvement of public corporation and parastatals. The reason is obvious, government constitutes the largest single business entity and her pattern of expenditure through its various parastatals, agencies and commissions stimulate lot of economic activities (Belloli, 2006). As a result of the governments’ involvements in economic activities, initiatives are being taken all over the world towards improving the standards of accounting and auditing departments in its institutions.

The public sector accountant has the responsibility of developing systematic arrangements to assist management in the performance of the services of the institution while the External auditor has among other duties, the complementary role to examine whether management actually performs that efficiently (Beasley). The External auditor has to satisfy himself that the accounts presented have been prepared according to statutory and regulatory requirements considering that all proper accounting practices have been observed throughout the compilation process.

It is a fact that public Corporations have a significant role in improving the wellbeing of the communities in any nation. In Nigeria, The Nigerian Communication Commission (NCC) falls in the category of public corporation. These corporation are the ones whose management has a direct impact on people’s lives in their respective localities (Chacha, M.A,). In this way, improving the manner in which these local institutions are managed is likely to be significance not only on the way they deliver goods and services to the population but also provide a good image of the public sector institutions within and outside Nigeria. Given this importance of public corporation, in the current moment the government in Nigeria has put much attention on developing and strengthening the audit department/function in the telecommunication sector. The logic behind this initiative is that in so doing there is a likelihood of improving the management of these institutions and hence being able to serve better the people in this era of decentralization. Therefore this research is set to look at the current development in the management of the public corporation, especially the initiative to strengthen the external audit function in the public corporation. In so doing the research aims at assessing the effectiveness of using external audit as a tool for improving public corporation management in the telecommunication sector.

  • Statement of the problem

Corporate fraud, bribes and illegal political contributions constitutes a threat to public confidence in government parastatals. People have argued that internal audit in companies which government control or in which they hold majority shares is very weak and inadequate and thus responsible for the occurrence of corporate irregularities and poor performance.

A weak system of internal control cannot provide sufficient accounting information to safeguard their assets and ensure effective efficient operations. In this study, the researcher will investigate the potential effectiveness of external auditors in government parastatals in preventing corporate irregularities and safeguarding assets.

It is upon this background that this study is conducted with the Nigerian Communication Corporation as a case study.


1.3       Objective of the study

This research is set to fulfill the following main research objective: To assess the effectiveness of external audit as a tool for improving public corporations. In order for the study to be able to fulfill the intention of its main research objective the Nigerian Communication Commission, Ikoyi, Lagos was selected for that matter. Other specific objectives are:

  1. To assess public corporations external audit effectiveness and efficiency in the prevention and disclosure of corporate irregularities.
  2. To point out if deficiency is in the internal control system of public corporations as well as its implication for top-decision maker.
  • To check if public parastatals neglect modern techniques of keeping financial records
  1. To make useful recommendation is areas of lapses in their external audit activities.

1.4       Research Question

There are many questions that need to be asked as regards this study. These are likely questions:

  1. Is external audit effective enough to prevent and disclose corporate irregularities in public corporations?
  2. Is there deficiency in the internal control system of public corporations?
  • Do government parastatals neglect modern techniques of keeping financial records?



1.5       Research Hypothesis

This research tends to achieve it aims by considering the following hypothesis:

  1. Ho: External audit is not effective enough to prevent and disclose corporate irregularities in public corporations

Hi: External audit is effective enough to prevent and disclose corporate irregularities in public corporations.

  1. Ho: There is no deficiency in the internal control system of public corporations Hi: There is deficiency in the internal control system of public corporations
  • Ho: Government parastatals do not neglect modern techniques of keeping financial records

Hi: Government’s parastatals neglect modern technique of keeping financial records.

1.6       Scope of the study

This research study focused on assessing the effectiveness of external audit as a tool for improving public corporations in Nigeria. In order to realize this focus of the study the Nigerian Communication Commission (NCC), Ikoyi, Lagos was selected as a case study.

1.7       Significance of the study

The findings of this research provide the insights on how external audit effectiveness can improve the public corporations and in particular for the Nigerian Communication Commission (NCC), Ikoyi, Lagos. It is believed that positive improvement in the public corporations is likely to benefit the citizens of Nigeria. Therefore, this study provides crucial understanding to the policy makers and other stakeholders in the Nigerian Communication Commission (NCC), Ikoyi, Lagos on the role and significance of the external auditing.

The results of the study are significant in the way that they are to a large extent relevant for influencing the management activities in the external audit of the Nigerian Communication Commission (NCC), Ikoyi, Lagos and to the external auditors.

For other researchers and those who will be interested with the functioning of the external audit department, the findings and conclusions drawn in this research may act as part of the reference materials for the purpose of stimulating debates on the effectiveness of external audit in public corporations.

1.8       Definition of operational terms

The researcher finds it worthy to define some important terms in the research work for a better understanding of their meaning and the context in which they are applied in the work.

External audit is an independent examination of the financial statements prepared by the organization. It is usually conducted for statutory purposes (because the law requires it).

Public corporation is defined as that part of a country’s economy which is controlled or supported financially by the government. In Nigeria, the public service is a national institution of excellence that has an important role in the abolition of poverty and acquiring a sustainable economic growth

Internal Control System: is the whole system of control, finical or otherwise established by internal check, internal audit and other forms of control”

Agencies: is an organization or bureau that provides some service for another


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