Abstract
This study examines the impact of management audit
on quality corporate financial reporting using Nigeria Bottling Company as a
case study. Improving business performance through an effective and efficient
internal control lies in the hand of the management of the particular
organization. The main aim of this study is to ascertain if management audit is
a means of evaluating quality corporate financial reporting. A good management auditor
therefore needs to study the whole situation and project it into the future and
forecast so that he can plan and take decision for all well being of the
organization. The research survey design was adopted and a sample size of 40
was adopted. The chi-square statistical tool was used in the study and it was
found that the society comprising of individuals of both private and public are
rapidly recognizing the contribution of the management audit organizational development.
The study concluded that management audit exercise will normally be carried out
by a team comprising of accountants and other experts or professionals required
for a thorough review of the operation for a particular organization. The study
recommends among others that control should be simplified and lines of
accountability made direct.
TABLE OF CONTENTS
Title Page i
Certification ii
Dedication iii
Acknowledgements iv
Abstract v
Table of Contents
vi
Chapter One: Introduction 1
1.1 Background
to the Study 1
1.2 Statement
of Problem 3
1.3 Research
Questions 5
1.4 Objective
of the Study 5
1.5 Statement
of Hypothesis (es) 6
1.6 Significance
of the Study 7
1.7 Scope of
the Study 8
1.8 Limitations
of the Study 8
1.9 Definition
of Terms 9
Chapter Two: Literature Review 12
2.1 Introduction
12
2.2
Concept
of Management Audit 12
2.3
Objective
of Management Audit 13
2.4
Advantages
of Management Audit 15
2.5
Examination
of the Objectives and Structure of the Organization 16
2.6 Detailed
Examination of the Qualified Experience and Responsibilities
of the Key Official of the Key
Official
of the Organization 18
2.7
Appraisal
of Recruitment Techniques 20
2.8
A
Critical Review of Existing Sources of Income and Search for a Possible New Source of Income 22
2.9 Examination
of All
Expenditure Items 24
2.10 Formation
or Recommendation and Management
Audit Report Writing 26
2.11 Purpose of
Management 29
2.12 Internal
Control System 30
2.13 The
Functions of Internal Audit 34
2.14 Attributes
required of Internal Auditor 36
2.15 Factors
that Determines the Effectiveness
of the Internal Auditor 37
Chapter Three: Research Method and Design 40
3.1 Introduction 40
3.2 Research
Design 40
3.3 Description
of Population of the Study 41
3.4 Sample
Size 41
3.5 Sampling
Techniques 41
3.6 Sources
of Data Collection 42
3.7 Method
of Data Presentation 43
3.8 Method
of Data Analysis 43
Chapter
Four: Data Presentation, Analysis and Interpretation 45
4.1 Introduction
45
4.2 Data
Presentation 45
4.3 Data
Analysis 46
4.4 Hypothesis
Testing 60
Chapter Five: Summary of Findings, Conclusion and
Recommendations 66
5.1 Introduction 66
5.2 Summary
of Findings 66
5.3 Conclusion
67
5.4 Recommendations
68
References 69
Appendix I 71
Appendix II 72
CHAPTER ONE
INTRODUCTION
1.1
Background to the Study
Both
private and public sector organization of the economy are usually established
to achieve some certain defined objectives. In public, while the private
sectors, they are to provide social and welfare services to the public, while
the private sector is geared towards making profit through the goods and
services they offer. In most cases objectives to be achieved are obvious and
expected result qualifiable and can be measured against predetermined standard.
On
the other hand, particularly the public sector of the economy, objectives and
goals may not be subjected to definitions and possibility of varied
interpretations and the expected result may not be subjected to precise quantification
and measurement against predetermined standard.
In
an attempt to achieve various economic resources which can be translated into
and quantified in monetary terms. The measure of the success of any
organization is a reflection of the quality and effectiveness of its
management.
Social
process entailing responsibilities for the effective and economical planning
and regulation of the operations of an enterprise in fulfillment of a given
purpose such responsibilities involves; judging and taking decisions that will
lead to the effective management of the business. The controlling, motivation,
co-ordination and supervision of both man and material resources in attaining
the objectives and goals of the organization. Some organizations do well than
the other in the same environment with almost the same financial and economic
resources.
Inefficiency
and ineffectiveness of an organization results to many factors like bad
management, fraudulent practice, lack of expression, planning and lack of good
management skills. Management audit will reveal all these and recommend to the
management the appropriate position and suggest solution to individual
problems, when all these problems are stated in terms of reference to the management.
The
exercise is designed to check all levels of the management from the Chief
Executive Officer to the lowest rank officer of the organization. The
independence of the management audit team have a very crucial way of affecting
their report to the management and to crown it all, the attitude of the
management to the management audit team report will also have a great role to
play in measuring the management audit and quality corporate financial
reporting.
1.2 Statement of Problem
It is a clear fact that this
organization is established to make profit the worth of a firm is determined by
the financial statement prepared by the management and an independent body (the
external auditors) which is called up as to examine the accounts and report on
the fieriness of the account opinion. In the establishment of the organizations
the objectives and goals are spelt out in the memorandum and article of
association which guide their activities internally and externally as the case
may be. It is an often occurrence that in an attempt for an organization to
work towards achieving their desired goods and objectives in the most effective
and efficient manner, the Westford some resources and left untapped as a result
of either inadequate technical know hoe, experience business acumen or mismanagement
of fund.
This study therefore is aimed at
establishing how management audit has affected the evaluation of performance in
the NBC plc coca cola company and makes necessary recommendations in the area
of weakness in the organization. With the data gathered so far, it crystal
clear that this organization can never do well without a good system of
internal control which in there hands of the management, and this is the main
focus is the management audit which ensure that this system of this external control
is well planned and prepared and ensure that management conform to it because
this ahs a great effect in increasing performance.
1.3 Research
Questions
An interview was conducted in order to
ascertain of the following;
i.
Is management audit a means of
evaluating organizational performance and efficiency?
ii.
Does management audit have position
change in an organization?
iii.
Are there significant difference between
the role of management audit and evaluating performance in an
organization?
14. Objective
of the Study
The following objectives were to be
achieved by the researcher during the course of this research;
i.
To ascertain if management audit is a
means of evaluating organizational performance and efficiency.
ii.
To ascertain if management audit have
position change in an organization.
iii.
To find out the significant difference
between the role of management audit and evaluating performance in an
organization.
1.5 Statement
of Hypotheses
The hypotheses used for the purpose of
this study have been divided into four;
Hypothesis One
HO: Management audit is not
a means of evaluating organization performance and efficiency.
HI: Management audit is a
means of evaluating organizational performance and efficiency.
Hypothesis
Two
HO: Management audit cannot
have position change in an organization.
HI: Management audit can
have position change in an organization.
Hypothesis
Three
HO: Management audit does
not enhance the overall efficiency of the organization.
HI: Management audit
enhance the overall efficiency of the organization.
1.6 Significance
of the Study
Management audit has been increasingly
important in the model management. In the face of increasing cost of operation
resulting from high cost of input, rising risk in international political
economy, any responsible organization can no longer afford the luxury of either
over staffing the best laid goals of an organization. irrespective of the
planning expert can be frustrated, it would be seen as inadequate and well
round staffing structure, hence the role of management audit.
The inviolability of management audit in
less developed countries cannot be overemphasized. This research work will
clearly and lucidity spell to all that is involved in management audit as well
as the compelling need of such an exercise from time to time. Management audit
is not only this organization but any other organization which wishes to
continue in existence and remain competitive for both human and non-human
resources.
1.7 Scope
of the Study
This research work covers all aspect of
management audit in the coca-cola company it examine the doings and positions
of every workers and see if there is need for a change in the management of the
organization and for making and taking strategic and tactical plans and
decision respectively. With reference to management, the underlying study is
audit as it affects procedure for taking decisions, carrying out business and
the goals and objectives of the organization. This study was basically carried
in Benin City and a time frame of 5 years was used in the course of this study
(2008 – 2013) with a sample of 40 respondents for easy clarification.
1.8 Limitations
of the Study
This project work suffered several limitations,
which vary in different stages and forms in the course of the research work.
Briefly put the time allocated for the work of this magnitude was rather too
short, distance was another constraint which militated against this work, and
sources of information failure by some officers to keep their appointment are
factors which also affected the research work.
1.9 Definition
of Terms
1.
Management:
This
is a process which enables organization to achieve their objective by planning,
organization, controlling their resources in order to achieve the
organizational goals.
2.
Audit:
This
is an independent examination of an expression of opinion on the financial
statement of an enterprise by an appointed auditor in pursuance of that
appointed and in compliance with any relevant statutory obligation.
3.
Auditor:
This
is a professional man employed to carryout the audit exercise, he is
responsible to the members or shareholders of the organization.
4.
Financial
Audit: This is the strategic decisional choice in which the
management finance an enterprise.
5.
Internal
Audit: It is an element of internal control system set up
by the management of an organization to examine, evaluate and report on
accounting and other controls in operations.
6.
Internal
Control: This is the whole system of control, financial and
otherwise established by management in other to carry on the business of the
enterprise in an orderly and efficient manner ensure adherence to management
policies, safeguard the assets and secure as far as possible the completeness
and the accuracy of the records.
7.
Organization:
Organization
is a social units that pursue specific goals, which they are structured to service
under some social circumstances.
8.
Goal:
This
is defined as a future state of affairs which the organization strives to
achieve.
9.
Fraud:
Is an act which involves the use of
deception to obtain unjust financial advantage. It is also an act of
international misstatement in or omission of amounts in an entity’s accounting
records or financial statement.
10. Accounting:
This is the process of identifying, measuring and communicating of economic
information or permit information judgement and decision by user of such
information.
11. Policy:
Is procedure or rules which an organization has decided to follow consistently
in order to obtain defined goals.
12. Policy Analysis:
This is defined as the practical philosophy on how to assist decision, makers
with complete problems of choice under conditions of uncertainty.
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