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Product Category: Projects

Product Code: 00000885

No of Pages: 74

No of Chapters: 5

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Internal auditing department has evolved to meet the need of business, government and nonprofitable organization. The demand for internal auditing arose when managers of early large corporations recognizes that annual audit of financial statement by Certified Public Accountant (CPA) were not sufficient. The objective of this study, is to find out if the internal audit department in the unit command of the Federal Road Safety Commission, in which Auchi unit command was the case study of the research has/or is playing the role of a panacea to the command. Simple random and stratified sampling methods were used in the process of administering the questionnaire. The sample size was limited to 30 staff, in which both junior and senior staff of the Federal Road Safety Commission were sampled. At the end of the study, it was discovered that the internal audit department which is normally referred to as an extension of management serve as panacea to the commission. The researcher therefore recommends based on the findings that; the federal government who are responsible for the recruitment of staff into the internal auditing department, should ensure that qualified and experience staff are recruited into the department; the internal auditors should be motivated and lastly, management should ensure that the report of internal audit department are read and that adequate steps should be taken to improve the organizational performance.  



Title Page                                                                 i

Certification                                                     ii

Dedication                                                       iii

Acknowledgements                                          iv

Abstract                                                           vii

Table of content

Chapter One: Introduction                            1

1.1      Background to the Study                                         1

1.2      Statement of Problems                                     5

1.3      Research Questions                                         5

1.4      Objectives of the Study                                    5

1.5      Statement of Hypothesis                                  6

1.6      Significance of the Study                                         6

1.7      Scope of the Study                                           7

1.8      Limitation of the Study                                    8

1.9      Definition of Terms                                          9

Chapter Two: Review of Related Literature  11

2.1   Introduction                                                     11
2.2   Purpose of Internal Audit.                                12

2.3   The History of the Federal Road Safety Commission.     13

2.4   Organization of the Internal Audit                   20

2.5   Objectives of the Internal Audit                               23

2.6   Function of the Internal Audit Department      24

2.7   Factors Militating against the Effectiveness of the Internal Audit.  27

2.8   Managing the Internal Audit Department                28

2.9   Essential Qualities of Internal Auditor             32

2.10         Internal Audit Department                               33

2.11 Acceptance of Evidence                                   35

2.12 Internal Audit Investigation Techniques          39

Chapter Three: Research Method and Design 43

3.1      Introduction                                                     43

3.2      Research Design                                              43

3.3      Description of Population of the Study            43

3.4      Sample Size                                                     44

3.5      Sampling Techniques                                      44

3.6      Sources of Data Collection                               44

3.7      Method of Data Presentation                           45

3.8      Method of Data Analysis                                  45


Chapter Four: Data Presentation, Analysis and Interpretation    47

4.1   Introduction                                                     47

4.2   Data Presentation                                            47

4.3   Data Analysis                                                   48

4.4   Hypothesis Testing                                          55

Chapter Five: Summary of Findings, Conclusion and Recommendations      58

5.1   Introduction                                                     58

5.2   Summary of Findings                                      58

5.3   Conclusion                                                      59

5.4   Recommendations                                           60

References                                                       61 

Appendices                                                      64









1.1      Background of the Study

Internal auditing has evolved to meet the need of business and government and non profitable organization. Originally, a demand for inter auditing arouse when managers of early large corporations recognizes that annual audits of financial statement by Certified Public Accountants (CPA) were not sufficient. As organization become larger and complex, they encountered additional operational problems that could be addressed operationally.

Several relatively recent events have been important to the evolution of the internal auditing profession. The first was the enactment of the foreign corrupts practice Act of 1977. the accounting provisions of the Act require public companies to establish and maintain effective internal control. To ensure compliance with these provision, many companies established or augmented their internal auditing departments.

Another event that affected that internal auditing profession was the issuance in 1989 of the “Report of the National Commission on fraudulent financial reporting”.

This report contains the commissions finding and recommendations about preventing fraudulent reporting by public companies. Among its recommendation was a suggestion that the public companies establish an internal audit function, with appropriate qualified personnel and fully supported by top management. It also recommends the following:

1.          Internal Audit objectivity within the organization.

2.          Maintain a director of the internal audit function with appropriate stature, establishing effective reporting relationships between the director of internal auditing and the audit committee of the board of directors.

Consistently in 1998 the Blue Ribbon Committee Report on audit committee effectiveness conclude that appropriate responsibilities for the oversight of financial integrity and accountability of public companies may be viewed as a three legged stool consisting of:

·                    Management and internal audit

·                    The board of director and its audit committee and

·                    The external auditors

Internal auditing has various definitions in different books, one of such definitions ways by Adeniyi (2012, p. 242) as an independent, objective, assurance and consulting activity designed to add value and improve an organization’s operating.

Howard (1974, p. 201) defined internal auditing as an internal check in an establishment to put the management in their appropriate footing on statutory.

The internal audit serves as a protection for management against irregularities that could be committed by officials of the organization such as fraud, misuse of funds or theft of assets, dereliction of duty which could result in financial loss or damage to the organization.

Internal audit also offer a constructive service to management by making objective assessment of operational procedures in an organization and putting forward to management well thought out suggestions for improvement.

It must be noted that the establishment of the internal audit function is not required by only law and is usually crested by the management of offer the aforementioned protection and constructive service to it.

The internal auditor is in fact an extension of management and does the things which the chief executive officer of any organization would have been doing himself with his time and necessary expertise in executing any of the functions of management. Therefore, the chief executive can always seek the assistance of internal auditor. This is why internal auditing is referred to as a panacea to effective management, as no management will attain optimal effectiveness without the help of the internal auditor.

1.2      Statement of the Problem

This topic looks into the problems faced by management prior to the establishment of the internal audit department and finally the role played by management in ensuring the effective of management i.e. how has the internal audit department served has a panacea to management.     

1.3      Research Question

1.          Does the internal audit department in the unit command serve any significant purpose to the management of the command?

2.          What are the relevance of the internal audit department to the command?

1.4      Objective of the Study

The evolvement of large activities by business organization and the concept of expansion by many organization has really increase the need for the establishment of the internal audit department.

This study is directed to find out if internal auditing will help the unit command to put all her record in order of operational accounting procedure in governmental settings.

The study will also serve to enlighten us on the organograme of the Federal Road Safety Commission as a case study is concerned.

To ascertain if there is any reason for the federal road safety commission to operate an effective and sound, reliable internal audit system even down to the units commands.

1.5      Statement of Hypothesis

Ho:  Internal auditing department do not serve as a panacea to effective management in the command.

HI:    Internal auditing department serve as a panacea to effective management in the command.

1.6      Significance of the Study

Internal auditing is a service to management. It acts as a panacea to management in the following ways:

·                    It reduces staff fraudulence in the Federal Rod Safety Commission unit command.

·                    It also ascertains the level of control in an organizational system like paramilitary.

·                    Internal auditing effectively put the management in the true picture of what is happening internally in any system, to enable them take concrete decisions over their pressing issue of improvement.

1.7      Scope of the Study

This work is primarily concerned with how internal auditing serves as a panacea to management with particular reference to the Federal Road Safety Commission, Auchi Unit Command. For the purpose of this study, attention was centered on selected activities of the unit where internal auditing service is of paramount importance. The areas considered are;

i.            Account of allocation received monthly

ii.          Salaries and impress account in department

iii.        Booking accounts (Revenue)


1.8      Limitation of the Study

·                    The compilation of information used for the preparation of these work has not been easy. One of such problem is the refusal of some officers, especially those at the unit command to have direct interview with them.

One of the commander contacted at the time of collecting data said “it’s outside my power to give any information or allow anybody to collect information from the unit command without the permission or a written document from the headquarters”.  

·                    The project work is restricted to Federal Road Safety Commission, Auchi unit command which result obtained from this may not represent the result of other organization. If the result is generalized, it may be misleading.

Despite the problem above, all the relevant information needed was obtained and project complete as schedule.


1.9      Definition of Terms

Auditing: The review and checking of records and operation of any business entity.

Internal auditing: Is the independent appraisal of activity within an organization for the review of the accounting, financial and other operations as a basis for protective and constructive service to management.

Defalcation: Misappropriation of money and materials entrusted to someone.

Internal Control: It is “not” only internal check and internal audit but the whole system of controls financial and otherwise, established by the management in order to carry on the business of the enterprise in an orderly manner, and safeguards its assets and secure as far as possible the accuracy and reliability of its records.

Internal Check: Is the allocation of authority and work in such a manner as to afford checks on the routing transactions of day to day work by means of the work by one person being complementary to that of another.         

Loans: Is the money granted as credit by the unit commander to its state after satisfying certain conditions and which will be due for payment at an agreed date.

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