THE RELEVANCE OF AUDITING IN THE ENHANCING OF ACCOUNTABILITY IN PRACTICE COMPANIES (A CASE STUDY OF PHINOMAR NIGERIA LIMITED)
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THE RELEVANCE OF
AUDITING IN THE ENHANCING OF ACCOUNTABILITY IN PRACTICE COMPANIES
(A CASE STUDY OF
PHINOMAR NIGERIA LIMITED)
ABSTRACT
As regard to the relevance of auditing
in the enhancement of accountability in private companies. In the past, it was only
the accountability fund of the public companies that were given a little public
notice or concern. Private companies did not pay much attention to external and
internal audit. But this has increased the rate of mismanagement fraud
and embezzlement.
Based on these, the research needs to ascertain the relevance of audit in the
enhancement of accountability. It is also at same time aimed at correcting the
misconception which public has about audit.
In
chapter two which is an overview of related literature, effort were made in the
definition of audit, essential features of an audit. All definition have
one thing in common that audit is the independent examination of an expression
of opinion on the financial statement of our enterprises by an appointed
audition.
Chapter three states that design and methodology which include the source of
data, interviews, question and sample size.
Chapter four is the data analysis collected questionnaire are analysis with
number percentage and degree of respondent affirmed to a particular
answer. Chapter five contains the findings, recommendation and
conclusion. In conclusion it is believed that co-operative and compliance on
the part of audit management and employee will be of great importance for
proper attainment of accountability.
CHAPTER FOUR
1.1
INTRODUCTION
In the past, private companies did not
pay much attention to external and internal audits. It was only the
accountability of public funds, which was given a little public notice or
concern. But the increasing rate of mismanagement fraud and embezzlement
in every business concern has brought the awareness of the indispensability of
an audit. The definition of a private company is pertinent for a proper
understanding of the topic. A private company been has defined by
Websters dictionary as “any company founded and operated for the purpose of
making money for the shareholders of the company. It can also be definite
as a company which is restricted to a membership of fifity shareholder
(excluding employees and ex employed and it is prohibited from issuing any
invitation to the general publc for subscription of shares. Private companies
have become very popular and have virtually replaced partnership in commerce
and industry thus, there are law guiding the operations of the private
companies. These laws are included in the companies and allied matters
act 1948, CAMA 1967 and currently the companies of allied matters act decree
(Ams 1970).
At
audit on the other hand has received a lot of definitions both from authors and
accounting bodies. There is little or no need to say that it has suffered at
lot of misinterpretation. Most of the is given interpretation as audit as aimed
at fraud and error detection. Some business concerns have misconception than an
auditor should be employed only when fraud is suspected to have been committed
and some employees auditors see them as fraud detectors but auditing involves
much more than that. One of the most involved and acceptable definition of
an audit so far is that issued by the consultative council of accounting bodies
(CCAB) which sees an audit as the independent examination of an expression of
opinion on the financial statement of an enterprise by an appointed auditor in
compliance with relevant statutory obligation. This topic, relevance of audit
in the enhancement of accountability will dwell on how invaluable an audit is
to a private company in order to attain it’s desire objective. This while
up have been divided into five chapter to ensure an intensive research work and
for better understanding of the work.
1.1
HISTORICAL BACKGROUND OF STUDY
The company Nigeria limited is fully
owned by the Agulofu family with his royal Highness Igwe I. O. U. Ayalog as the
chairman and managing director. The company was fully incorporate in
1979. The company has its headquarters at Ngwo in Udi local government
area of Enugu State. The company was started by the Igwe with a small mud
oven and twelve birds a hobby in 1963. Through the advice of a British
salesman and a friend, the Igwe increased his take in both business but become
more interested in the poultry area. The company has since developed
tremendously and has grown into a group namely.
a.
Goodwill Poultry farm
b.
New Nigeria Backery
c.
Multi purpose Crop farm
d.
Precision machine tools and fabrication plant
The organization and functional
structure of the company has the Board of Director at the apex, ten Managing
Directors, General managing and the Deputy General Manager, below two Deputy
manager are the office of the company on the same horizontal lien in change of
their varies department namely: the accountant who is in-charge of the
accounting department, the internal auditor takes cares of the Department.
Their Human Resource manager heads the Human Resources Department and the
General secretary of the company is the head of the public relation
department. Further down the line but on the same horizontal line are
production manager, sales manager and purchase managers in charge or the
production department, sales department and purchase department respectively.
The last on the chart are the manual labourers who make up majority of the
staff strength and their services are the paramount importance of the company
Organizational and
Functional Chart of phinomor Nigeria Limited
1.2 STATEMENT
OF THE PROBLEM
The increasing wave of the fraud and
embezzlement in every business concern including private companies has brought
to highlight the problems associated with accountability in private companies.
In
this write up it is proposed that auditing will help enhance the accountability
in private companies. The researcher has used the following questions.
a.
To what extent has phinomar Nigeria Limited engaged in the practice of
auditing.
b.
What factors inhibit or facilities the practice of auditing.
c.
Are auditors recommendations ever applied after appraisal of the auditors
report.
d.
Is the present degree of accountability in the company attributed to auditors.
1.3 OBJECTIVE
OF STUDY
Having stated the problem the purpose/
objective of the study are:
a.
To ascertain the role of auditing in the enhancement of accountability.
b.
To enable the employee of auditors have a good knowledge of what an auditor is
all about and what to expect from an auditor.
c.
To ascertain the problems that independent auditors encounter in the discharged
of their duties.
d.
To play the loopholes those have denied private company accountability.
1.4 HYPOTHESIS
A hypothesis is tentative state which
is the subject to further proof. Based on this, the researcher has
generated the following tentative statements for the purpose of this study.
H01:
Audit does not influence accountability in private
companies.
H02:
Audit does not influence accountability in private
companies.
H02:
Audit is not necessary for accountability in the private
companies.
H1.2: Audit
is necessary for accountability in private
Companies:
H1.3: Accountability
is a function of audit in private
companies.
H0.4:
Audit
does not make any positive contribution towards the improvement of
accountability in private companies.
H1.$:
Audit
makes positive contribution towards the improvement of accountability in
private companies
1.5
RESEARCH QUESTIONS
|
S/N
|
Valuables
|
Yes
|
%
|
100
|
%
|
Other valuables
|
%
|
|
1
|
Do you work with
phinomur Nigeria Limited
|
20
|
100
|
-
|
-
|
|
|
|
2.
|
If “Yes” are you in
the top management cadre?
|
6
|
30
|
14
|
70
|
|
|
|
3.
|
Have you been with
the company for at least 2years?
|
|
|
|
|
|
|
|
4.
|
Are you married
|
|
|
|
|
|
|
|
5.
|
|
|
|
|
|
What sex are your
male or female
|
60 & 10
|
|
6.
|
Will you line to be
with the company
|
|
|
|
|
|
|
|
8.
|
Do you think that
the accounts department has to the required qualified account
|
|
|
|
|
|
|
|
9.
|
Do you think that
the company is periodically audited
|
|
|
|
|
|
|
|
10.
|
Was the company
audited last year?
|
|
|
|
|
|
|
1.6
SIGNIFICANCE OF THE STUDY
1.
Shareholders are rest assured that auditors scrutinize objectively the accounts
they have given to others (Director).
2.
Audit acts as a check upon the officers of a company the knowledge of the books
of accounts will be surely audited restrains them know hatching any conceived
fraudulent acts and to be much more careful with their duties.
3.
Audit has made it possible for an auditor to render to the management on some
valuable assistance on matters of accounts and finance generally from his
wealth of knowledge and experience in the profession.
4.
The applications to bank and other outside parties for the purpose of raising
finance. If supported by auditors accounts when generally enhanced.
5.
The board of inland revenue also was a look at audited accounts of a company.
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