THE CHALLENGES AND PROSPECTS OF AUDITING IN A COMPUTER ENVIRONMENT (A Case Study Of Nigeria Mobile Telecommunication, Limited)
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THE CHALLENGES AND PROSPECTS OF AUDITING IN A COMPUTER ENVIRONMENT
(A Case Study Of Nigeria Mobile Telecommunication, Limited)
ABSTRACT
For any organization to function effectively and efficiently to achieve its desired goals and objectives, such an organization must have an efficient way of managing her daily operations, (Financial, Admin etc.). it is therefore a major corporate responsibility of the management to provide adequate measures which will facilitate the achievement of their set goals. This research work is aimed at determining the effect of audit in a computer environment. To buttress this point, Nigeria Mobile Telecommunication Limited (MTEL) Kaduna, is used as a case study. The auditing variables researched upon include financial and non - financial variables. A sample size of 4 employees was drawn out of a research population of 37 members of staffs composed of managerial and non-managerial staff to answer the question in the question in the questionnaire administered to them. Also personal interview was conducted to supplement the information obtained from the questionnaires. However, in the course of the research, one hypothesis was used, “Computer Audit facilitate/enhance audit work,” the alternate hypothesis was accepted, while the null hypothesis was rejected, based on the data collected through the questionnaires administered and the proof of hypothesis. Based on the data collected and analyzed, the summarized fact were discovered that, the organization is aware of the positive effect of computer on the entire organization, yet computer audit in the account department are not still appreciated. Finally, I the researcher, recommend that the organization should not just know that computer audit facilitates/enhance audit work, but also adhere and apply it. When this is done it will enhance and facilitate accountability, gen1erally in the organization.
TABLE OF CONTENT
Cover -- -- -- -- -- -- -- -- -- i
Title -- -- -- -- -- -- -- -- -- -- ii
Declaration -- -- -- -- -- -- -- -- iii
Approval -- -- -- -- -- -- -- -- -- iv
Dedication -- -- -- -- -- -- -- -- -- v
Acknowledgement -- -- -- -- -- -- -- vi
Abstract -- -- -- -- -- -- -- -- -- vii
Table of Content -- -- -- -- -- -- -- -- viii
CHAPTER ONE
1.0 Introduction -- -- -- -- -- -- -- 1
1.1 Historical Background of Mtel -- -- -- -- 3
1.2 The statement of the problem -- -- -- -- 4
1.3 Aims and Objectives of the Study -- -- -- -- 5
1.4 Significance of the Study -- -- -- -- -- 6
1.5 Hypothesis -- -- -- -- -- -- -- -- 7
1.6 Scope and Limitation -- -- -- -- -- -- 7
1.7 Definition of Term -- -- -- -- -- -- 8
CHAPTER TWO: (Literature Review)
2.0 Introduction -- -- -- -- -- -- -- 13
2.1 The Concepts of Auditing and Computer -- -- -- 13
2.2 The Impart of Computers on Managers
And in a Business Organization -- -- -- -- 15
2.3 Objectives of internal Control in a
Computerized Accounting System -- -- -- -- 17
2.4 Weakness of the Tradition and Computer
Method of Auditing -- -- -- -- -- -- 24
2.5 The Use of auditing trial in a business organization -- 29
2.6 The Problem and benefit (Prospects)
Of Computer Auditing -- -- -- -- -- -- 33
CHAPTER THREE (Research Methodology)
3.0 Introduction -- -- -- -- -- -- -- 36
3.1 Research Design -- -- -- -- -- -- -- 36
3.2 Area of the Study -- -- -- -- -- -- 37
3.3 Research Population and Sample size -- -- -- 37
3.4 Instruments for Data Collection -- -- -- -- -- 38
3.5 Validation/Reliability of Instrument -- -- -- -- 38
3.6 Procedure for Data Collection -- -- -- -- -- 39
3.7 Procedure for Data Analysis -- -- -- -- -- 39
CHAPTER FOUR (Data Presentation and Analysis)
4.0 Introduction -- -- -- -- -- -- -- 41
4.1 Presentation of Data -- -- -- -- -- -- 41
4.2 Data Analysis -- -- -- -- -- -- -- 46
4.3 Test of Hypothesis -- -- -- -- -- -- 46
4.4 Research Findings -- -- -- -- -- -- 47
CHAPTER FIVE (Summary, Conclusion and Recommendation)
5.0 Introduction -- -- -- -- -- -- -- 49
5.1 Summary -- -- -- -- -- -- -- -- 49
5.2 Conclusion -- -- -- -- -- -- -- -- 50
5.3 Recommendation -- -- -- -- -- -- 51
Bibliography -- -- -- -- -- -- -- 53
Questionnaire -- -- -- -- -- -- -- 55
Area Office/CSC Organongram MTEL) -- -- -- 57
CHAPTER ONE
1.0
INTRODUCTION
Human being, either young, old, literate and illiterate
are all product of their various environment i.e. the environment (internal or
External) affects them either positively or negatively, even their work and
inputs into anything, due to the rational and unpredictable nature of man, that
makes them react to stimulants.
Before considering, the reaction towards auditing,
auditing can be traced back to the ancient times where the receipts and
payments of an estate or a manor were read to the lord or proprietor, or the
head of a manor. It began more like a stewardship kind of dealings, where
houses are entrusted into the hand of caretakers, who report to the landlord at
the end of every month, etc. the origin of the word auditing is from a Latin
word “Audire” (meaning to hear). At the beginning, the dealing was a kind of a
sole – proprietorship business, since it involves a landlord and a
steward/caretaker; but with industrial revolution, there was an increase in
business transactions, which ushers in partnership, and other forms or types of
business. Hence, financial transactions becomes much and the whole processes
becomes complex and required more formal and improved accountability.
Considering the issue of audit reaction to the computer
environment, it becomes proper to note that prior to the new era (computer)
audit had already been in practice, though in a traditional/manual environment,
as such, there are bound to be either challenges or prospects in the change to
computer environment. This holds to the fact, that human beings react to
changes in either positive or negative way, and they constitute the most
important resources, in an organizational setup.
Over the years human beings had been used to a
particular audit environments and it has become part of their routine work; so
introduction of a new thing could and could not be a problem, irrespective of
its future contribution, but as a result of human level of adoption to new
things.
Hence, the starting point is how fast or slow, the
organizations members of staff adopts to new policies, where this is in place,
then the challenges and prospects can now be determined.
1.1 HISTORICAL
BACKGROUND OF M-TEL
From M–TEL’s NEW IMAGE. A presentation to new members of
the Mtel family October 2003. Mtel was established in 1996, to run the
operations of NITEL’S Total Access Communication System (TACS).
It was merged with NITEL in April 2001 and demerge on 1st
April, 2003. It has the vision of becoming, the number two mobiles operators in
Nigeria in both consumer and business markets in five years, and have a
reliable state of the art network infrastructure that meets the ever increasing
demanding requirements of its customers and support a wide range of mobile
voice and data service. Also, that its organization will have a “customer
first” culture that is plainly visible by the respectful way it treats its
customer and by the utmost care that is taken throughout the organization to
maintain the promised service levels. And Mtel is aimed at achieving this
vision through the telecommunication services it provides to the general
public.
1.2 THE STATEMENT
OF THE PROBLEM
The audit problems with organization today can be dealt
with from two broad perspective i.e. technological problem and historical
problems.
This sense of the technical problem has to do with lack
of technological know how. Since audit in a computer environment is a modern or
contemporary way of audit, it entails a formal or an informal training on how
to do this, which so many people (auditors) and their organization lacks, and
it also involves extra spending on the purchases, maintenance, etc. of computer
and its accessories, which organization try to avoid in their bids to maximize
profit.
The historical aspect of it could be referred to as
familiarity with the traditional way, which result from continuous practice,
hence making it difficult for one to adopt to current or modern way of doing
it, so easily.
Furthermore, the size of the organization, like my case
study whose area offices here in Kaduna is small in size and in member of
staff, also determine the use of modern audit (Computer) or the traditional
(manual) way of doing it, i.e. if the size is big, computer audit will be
embarked on to facilitate the whole audit process, while if it is small in
size, the traditional way can be used, since the work load in little.
1.3
AIMS AND OBJECTIVE
OF THE STUDY
Many organization have seem
insist on using the traditional way of audit, due to the ignorant of the
positive and negative effects of computer audit on the audit department of an
organization. As such, I the researcher is embarking on this study using Mtel,
Kaduna, as a case study to bring out the possible effects and defects of
computer audit in an accounting system of an organization, after which the
effects will be compare as against the defects, hence knowing whether to use
computer audit or not. And my objectives are:
i.
To ensure proper
accountability in financial management, in our organization (Mtel)
ii.
To ensure,
efficiency and effectiveness in the actualization of the organizational target.
iii.
To ensure an
equitable distribution of service in proportion to the money paid.
1.4
SIGNIFICANCE OF THE
STUDY
The main reason or purpose
of setting up any commercial organization is to maximize profit, but most
often, this purpose is not being achieved as a result of mis – management of
resources (financial and Material).
Hence, this research work will enlighten organizations
and potential investors/entrepreneur on how to guard against mis – management
of resources, by building a solid frame work for check and balances in an
organizational set – up.
1.5
HYPOTHESIS
Here, I, (Researcher) is
using a tentative statement or assumption to guide my enquiries in the
organization, to know the positive impact and effectiveness of computer audit
to the organization. i.e.
Hi: Computer audit facilitates and enhances audit work.
Ho: Computer audit does not facilitates and enhances audit
work.
These two assumptions above are the basis for which I am
giving out my questionnaires.
1.6
SCOPE AND
LIMITATIONS OF THE STUDY
This research work is
limited to the communication industries, precisely Nigerian Mobile
Telecommunication Ltd (Mtel) Kaduna Area Office.
The time of submission of
this project is short, that I, the researcher limit my work to the area office
of Mtel Kaduna.
Also, due to the
administrative secrecy on the part of the organization, because of her
competitors, I was unable to get all valuable information that would have
helped me in this research work, besides, time was not enough for me, since I
had to combine both the class work and the research work.
Finally, accessibility to
relevant textbooks also, constitutes a constraint on my work.
1.7 DEFINITION
OF TERMS
v Computer:
An electronic machine that can save information and do things with it according
to a set of instructions called a programme.
v Audit: It
is an independent scrutiny and examination of organization books of account and
financial statement, to states, ones opinion of, on the accuracy and
completeness of the records prepared.
v Challenges:
Something that tests strength, skill, or ability especially in a way that is
interesting.
v Prospect:
Chances of future success.
v Environment:
All the situation, event, people etc. that influence the way in which
people live or work.
v Traditional:
Following ideas and methods that have existed for a long – time without
being interested in anything new or different.
v Manual:
Operated or done by hand or without the help of electricity, computers,
etc.
v
Flowchart: A diagram that uses connecting
lines and a set of conventional symbols to show the sequence of operations and
the flow of data in a computer programme.
v
Hardware: These are the physical
components of a computer system, such as the chips, disk drives, monitors, etc.
v
Data: This is piece of basic raw fact
that needs to be processed to produce a meaningful information
v
Information: This is a processed data
into meaningful and useful terms
v
Input Device: This is a medium/device
through which raw data are being fed into the computer.
v
Output Device: This is the device through
which a processed data/information can be made available for human consumption.
v
Binary Code: This is a coding system that
uses alternative elements, 0 or 1 true or false, etc.
v
Bit: A binary, digit, this is the
smallest unit of information that a computer can handle represented by a single
0 or 1.
v
Byte: This is a group of eight bits
(representing, for example, a number or letter) that the computer operates on
as a single unit.
v
Magnetic Media: These are primarily
storage media but are often used at an intermediate stage of data input. E.g.
Magnetic Tape, Magnetic Disk. Etc.
v
Data Base: A collection of information
organized for rapid search and retrieval.
v
Disk Drive: A device that rotates a
magnetic storage disk and that can record data on the disk and read data from
the disk.
v
Floppy Disk: A thin flexible plastic that
stores data in the form of magnetic patterns on it surface.
v
Interface: The hardware and software that
enable a user to interact with a computer (called a user interface) or that
enable two computer system to interact.
v
Logic Circuit: An electronic switching
circuit that performs a logic operation, its binary output is entirely
determined by the combination of binary input.
v
Memory: A storage area in which a
computer saves data and from which it retrieves data.
v
Microprocessor: A single chip containing
all the components found in a computer’s central processing unit.
v
Network: A system of computers,
terminals, and databases connected by communication lines.
v
Programme: A step by step series of
instructions directing the computer to carry out a sequence of actions in order
to perform an operation or to solve a problem.
v
Software: Instructions or programme used
by a computer to do its work; distinguished from hardware.
v
Random Access Memory (RAM): A temporary
computer memory system in which data can be stored and from which data can be
quickly retrieved.
v
Read Only Memory (ROM): A permanent
computer memory system containing data and instruction that can be retrieved
and used but never altered.
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