AUDITING AS AN AID TO ACCOUNTABILITY (A CASE STUDY OF ENUGU STATE POST PRIMARY SCHOOL MANAGEMENT BOARD (PPSMB)
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AUDITING AS AN AID TO
ACCOUNTABILITY
(A CASE STUDY OF
ENUGU STATE POST PRIMARY SCHOOL MANAGEMENT BOARD (PPSMB)
ABSTRACT
An economy moves as efficiently or
inefficiently as the people who manage its affairs. Business cannot thrive if
we do not have an adequate number of men with their requisite knowledge, skill
and competence.
It is in recognition of these fact that
an effort is made in this research work to show the impact of auditing in
public sector.
For the sake of clarity and orderly
presentation of relevant materials, the body of this work is divided into five
chapters.
Chapter one is the Introduction which
considers among other things, the Auditing curiosity about auditing. Historical
background of the study, Statement of problem, Objectives of the study,
Research questions and Hypothesis, significances of the study: practical and
academic significance, Limitations of study and operational definition of some
technical terms.
The second chapter discussed the review
of related literature, which comprises; theoretical review and empirical review
of different authorities. Auditing and accountability defined, origin and
development of audit, public and short note of public accountability,
government accounting procedures, the role of internal audit unit, statutory
positions, power and functions of auditor general and audit report.
The third chapter dealt with the Design
and methodology, Area of study, Population of study, Sources of data, Sampling
method, Research Instrumentation, validity and reliability of research
instrument and method of investigation.
Chapter four X-rays the data analysis
and presentation which include the hypothesis and response of the
respondent.
The final chapter presents the
findings, questionnaires and bibliography are under the appendix of the
write-up at the back page. Also in the back page is the application letter to
the Enugu state audit department.
The structural arrangement was made to
accommodate the size and complexity for audit work which increases enormously with
corresponding effect on the operation of public offices.
The complexities resulted to the
inadequate examination and verifications of the books and records in such a way
as to uphold a true and fair view of transactions.
In short, all these factors motivated
the researcher to try into facts of and rudiment of auditing and explores the
impact of auditing and use of auditing as means of avoiding these anomalies. So
auditing should be carried out in all public organization if actually the yield
by these organization would be satisfactory.
TABLE OF CONTENT
CHAPTER ONE
INTRODUCTION
1.1 Background of the
study
1.2 Statement of problem
1.3 Objectives of the
study
1.4 Research
question
1.5 Hypothesis
1.6 Scope of the
study
1.7 Significance of the
study
1.7.1 Practical and Academic
significance
1.8 Limitation of the
study
1.9 Operating definition of
terms
Reference
CHAPTER TWO
2.0 REVIEW OF RELATED
LITERATURE
2.0.1 Theoretical review auditing and
accountability
defined
2.0.2 Empirical review auditing and
accountability
Defined
2.1 Historical origin and development
of auditing
2.2 The meaning of public and civil
service
2.3 Short notes on public accountability
2.4 Government accounting
procedures
2.4.1 Constitutional requirement
2.4.2 Legislative
requirement
2.4.3 Administrative
requirement
2.5 Types of government expenditure
2.5.1 Recurrent expenditure
2.5.2 Capital expenditure
2.6 The role of internal audit
department in the state
Service
2.7 Statutory position, power and
functions of the auditor general
2.8 Audit
report
Reference
CHAPTER THREE
3.0 RESEARCH DESIGN
AND METHODOLOGY
3.1 Research design
3.2 Area of
study
3.3 Population of study
3.4 Sources of data
3.5 Sampling
method
3.6 Research instrumentation
3.7 Validity and reliability of
research instruments
3.8 Methods of
investigation
CHAPTER
FOUR
4.0 PRESENTATION AND
ANALYSIS OF DATA
4.1 Presentation and analysis of
data
4.2 Test of
hypothesis
CHAPTER
FIVE
SUMMARY OF FINDINGS,
CONCLUSION AND RECOMMENDATION
5.1 Findings
5.2 Conclusion
5.3 Recommendation
Bibliography
Appendix I
Appendix II
CHAPTER ONE
INTRODUCTION
The question of how to increase efficiency and positive result in audit work in
the public sector is a perennial problem in Nigeria, and one that is
increasingly warring the generality of the people of this country.
The response has been to upgrade the quality of audit staff and widening of the
powers conferred on audit institutions in the public sector. The need for the
training of audit staff in modern techniques of auditing which is more
effective and result oriented rather than restricting them to the traditional
methods of tick and turner which is inadequate and outdated.
Public sector auditing is centered towards ensuring the proper and efficient
use of public funds, development of sound financial management, the orderly
executive administrative activities and the communication of information to the
public through the publication of objectives reports since there are necessary
for the stability and development of the nation, there is the need to map out
the machineries and methods of carrying out a research these functions
effectively as to achieve a desired result.
In the past, the emphasis of an audit was on the traditional methods of
auditing which has been mainly the compliance audit, seeing that all books and
records comply with the laid down procedures and regulation. But now, there is
the need for a shift of emphasis to modern concept of effectiveness and
efficiency.
Based on these individual views of auditing and its functions, the researcher
took a keen inherent to rest empirically auditing an aid to accountability with
the Enugu State Post Primary School Management Board (PPSMB).
The increasing incidence of fraud and misappropriation of public fund and
property by the accounting officers and chief executive in the Enugu State Post
Primary School Management Board Posses a question as to whether auditing plays
any role towards ensuring proper accountability in the state public service.
Auditing is meant to control, deter and find out any fraud or misappropriation
of public fund or property by officers entrusted with such duties. It is
because of this onerous task that the Enugu State audit department was
established to appraise the work of those entrusted with the responsibility of
accountability.
Government undertakes various transactions through its representatives or
agencies and as such, they are required by law to give account of their
stewardship. To achieve these purpose, the constitution of the federal republic
of Nigeria provides a law established audit departments both at the federal and
state levels section 125(1) of the 1999 constitution provides that there shall
be an auditor general for each state of the federation who shall be appointed
in accordance with the provision of section 126 of this constitution. The
sub-section (2) of this section provides that the public account of a state and
all offices, ministries, parastatals and the courts of the state shall be
audited by the auditor-general for the state concerned, and for that purpose
the auditor-general or any person authorized by him in that behalf shall have
access to all the books, record, returns and other documents relating to those
accounts.
The sub-section (3) of this constitution also states that nothing of
sub-section (2) of the this constitution shall be constrained as authorizing
the auditor-general to audit the accounts or appoint auditor for government
statutory corporations, agencies, commission authorities, including all persons
and bodies established by law but the auditors-general shall provides such
bodies with
i)
A list of auditors qualified to be appointed by them as external
auditors, and from which the bodies shall appoint their external auditors and
ii)
A guideline on the level of lies to be paid to external auditors and
iii)
Commend on their annual account and auditor’s report thereon. The sub-section
(4) of this section also states that the auditor-general for the state shall
have power to conduct periodic checks of all government statutory corporations,
agencies commission, authorities.
Inspite of all these
provisions and safeguards, there is still existence of fraud and
misappropriation of public funds and properties by those entrusted with their
safeguards. In view of the foregoing, this study is aimed at appraising the
functions of the Enugu state audit department, problems affecting its
efficiencies performance and possible suggestion to enhance its effectiveness.
The researcher aims
to examine the major cause of fraud or misappropriation of public funds in
state public service and offer useful suggestions to arrest the ugly situation,
this study will be of immense importance for it will appraise the performance
of the Enugu State audit department and assess the extent it has been able to
achieve its objectives.
The research will
also offer useful suggestions on how best to achieve accountability in the
state public service.
1.1 BACKGROUND OF THE
STUDY
In
oral interview with the chief internal auditor in the Enugu State audit
department on the origin the audit department he said “the audit department is
as old as Nigeria”, he said that the present Enugu state audit department had
its root from the colonial masters. As of the time, there was one audit
in, the federation known as the colonial audit. The colonial master had their
representatives in Nigeria and they were responsible to the queen of England.
The country was divided into four regions, East, West, North and South. Each of
the regions had its own audit department but still under the control of the
colonial administration. This give rise to regional audits.
Section (1) of the Eastern Nigeria 1958 constitution state, “There shall be a
director of auditor for the region whose office shall be an office in the
public services of the region. In 1976, there was a further creation of states
I the country and two viz. Anambra State and Imo State following this each of
the states now has her own audit department with a director of audit.
Section 118(1) of the constitution of the federal republic of Nigeria 1979
states, the director of audit of a state on the recommendation of the state
commission subject to the confirmation by the House of Assembly of the State.
Following the creation of Enugu State in 1992, the State was empowered by
section 25 (2) of the 1999 constitution of the federal republic of Nigeria and
section 4 (2) of chapter 13 of the auditor law, to have its audit department in
the state respect of post primary school management board, and is being headed
by the state auditor-general and other members of staff are responsible to him.
1.2 STATEMENT OF
PROBLEM
There has been an entry of poor accountability in the state public service,
companies both public and private owned. This cause for proper and overall
audit and effective working of the machineries established by government and
companies to exercise control over funds. Auditing is believed by many to be a
medium to ascertaining the true financial position of companies and government
establishment. Despite this important role of auditing, accountability in
these sectors has not proved adequate and the researcher wants to find out if
auditing is actually an aid to accountability.
1.3 OBJECTIVES OF THE
STUDY
The fundamental objective of this investigation is to determine if actually
auditing is an aid to accountability. Secondly objectives includes:
1)
To examine if there is any significant relation between auditing and
accountability in (PPSMB)
2)
To determine the extent of inadequate auditing leads to misappropriation,
embezzlement and deflation.
3)
To ascertain if auditing is a strong tool for accountability
1.4 RESEARCH
QUESTIONS
The selected research questions that guide this study are:
1) Is there any
significant relationship between auditing and accountability in (PPSMB)?
2) In what ways
is inadequate auditing heads to misappropriation, embezzlement and deflation?
3) Is auditing
a strong tool for accountability?
1.5 HYPOTHESES
In order to arrive to a reasonable conclusion in the study of auditing as an
aid to accountability, it is very eminent to formulate a set of testable
hypothesis based on available data. To ensure true and fairness of this
studying, the under mentioned hypothesis should be tested in the study.
Ho:
There is no significant relationship between auditing and accountability in
(PPSMB)
Hi:
There is significant relationship between auditing and accountability in
(PPSMB)
Ho:
Inadequate auditing does not lead misappropriation, embezzlement and deflation
Hi:
Inadequate auditing leads misappropriation, embezzlement and deflation
Ho:
Auditing is not a strong tool for accountability
Hi:
Auditing is a strong tool for accountability
1.6 SCOPE OF THE
STUDY
The cope of the study centered on the usefulness of auditing in a public sector
titled, “Auditing as an aid to accountability” with a particular reference to
the Enugu State Post Primary School Management Board. It also covers the
problem of internal audit department in the public services and solution to
their problems.
1.7 SIGNIFICANCE OF
STUDY
At the end of the research, the following achievements will be recorded and it
is splited into two:
1)
Practical and
2)
Academic
1.7. PRACTICAL AND
ACADEMIC SIGNIFICANCE
a.
The auditing will find work very eminent for it will explore deeply their areas
of operation and the section of the constitution that empowered the operation
of audit in the public service.
b.
It will also make them understand that adequate remuneration of their staff
will reduce misappropriation and embezzlement in their establishment
c.
The management both in the private and in the public sector will also be taught
the need to put the machinery in notion towards establishing adequate internal
check which will certify the efficiency and effectiveness of their internal
control.
d.
Although this work is referenced to the state board, the member of the board of
directors and the shareholders will also find this work useful for it will make
them understand the usefulness of carrying out a research concerning audit in
their establishments.
e.
The students and would be researchers who would to research on a similar topic
will also has provided some researchable question for them.
1.9 OPERATIONAL
DEFINITION OF TERM
It is very eminent to define some professional terms and language used in this
work to make it easily understandable to interested readers of other
disciplines.
a)
Public fund: This the government independent and
accounting entity with a self-balancing set of accounts recording cash and or
other resources together with all related liabilities, segregated for the
purpose of carrying on specific activities or attaining certain objectives in
accordance with special regulation, restriction or limitation.
b)
Audit: AJEMBI O.A (1995) describe audit as
an examination by an individual or a firm of a set of financial statement and
to the underlying books and records which result, the auditing provides an
opinion on the financial statement.
c)
Accountability: This simply defined as the process of
keeping and documenting all the relevant data of an event
d)
Stewardship account: This is an account required of the
stewards or agents to render to the person they are subject to the management
of a firm render stewardship account to the members of the board, of director.
e)
Compliance audit: This is a kind of audit method
carried to ensure that all books and records are in agreement with the laid
down procedures and regulations.
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