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- THE IMPACT OF SALES PROMOTION IN A BUSINESS ORGANISATION (A Case Study of Nigeria Bottling Company Plc.)
- THE ROLE OF MANAGER IN SMALL SCALE BUSINESS ORGANISATION (A STUDY OF TOP PAINT LIMITED LAGOS)
- THE NEED FOR AUDITING AND INVESTIGATION IN SMALL SCALE BUSINESS ORGANISATION
- THE STOCK CONTROL AND BUSINESS ORGANISATION
- STOCK CONTROL AND BUSINESS ORGANISATION
- CORPORATE SOCIAL RESPONSIBILITY OF A BUSINESS ORGANISATION (A Case Study of Ecobank Nigeria)
INTERNAL AUDIT AND PREVENTION/DETECTION OF FRAUD IN A BUSINESS ORGANISATION (A CASE STUDY OF WEST AFRICA PORTLAND CEMENT)
This study is on the role of internal audit and prevention detection of fraud in a business organisation. The research report has been divided into five characters, which are as follows:
Chapter one is the introduction, it consist of information dealing with the statement of the problem, purpose of the study, significance of the study, research study, research questionnaire and hypothesis about the research.
Chapter two deals with the various literature reviewed by the researcher on the subject of the study and other integrate studies of internal audit and prevention/detection of fraud in an organisation.
Chapter three describes the methods used in the carrying out of the study, for the collection of data, the population sample and the analysis of data collected, as well as the instrument used in data collection.
Chapter four deals with data presentation analysis and test for hypothesis. Tables were used to present the data, percentage for the data analysis, chi-square for the test of hypothesis. Decision based on the data and hypothesis testing were made.
Chapter five deal with the summary of findings, recommendation, conclusions and suggestion for further studies. The chapter summary, the research findings and conclude given necessary recommendation. There are references cited and during the writing of the study this citations are prepared as list of references on the end of each chapters and all references used throughout the cause of the study are also listed as bibliography.
TABLE OF CONTENT
Title page i
Table of content vi
1.1 Introduction 1
1.2 Statement of problem 2
1.3 Objective of the study 2
1.4 Research question 3
1.5 Statement of research hypothesis 3
1.6 Significance of research 4
1.7 Scope of the research statements 5
1.8 Limitation of the research statement 6
1.9 Definition of term 6
2.0. Literature Review 9
2.1 Historical background of the study 9
2.2 Relating internal and external auditing 12
2.3 Internal audit 14
2.4 Functions of internal audit 15
2.5 Fraud and the internal audit 17
2.6 Responsibilities of internal audit for fraud 18
2.7 Fraud 19
2.8 Types of fraud 20
2.9 Prevention of fraud 23
3.0 Introduction 28
3.1 Research design 28
3.2 Restatement of research question 28
3.3 Restatement of research hypothesis 29
3.4 Characteristics of the study population 29
3.5 Sample and sampling design 30
3.6 Data collection instrument 30
3.7 Administration of data collection instrument 30
3.8 Technique of data analysis/test of hypothesis 31
3.9 Limitation of the methodology 32
4.1 Introduction 34
4.2 Data presentation and analysis bio data 34
4.3 Data presentation analysis with hypothesis testing 41
4.4 Discussion of findings 43
5.1 Summary of findings 44
5.2 Conclusion 45
5.3 Implication 45
5.4 Recommendation 46
5.5 Suggestion for future studies 46
Internal auditing is an independent appraisal established with an organisation to examine and evaluate its activities as a service to the organisation in the effective discharge of their responsibilities. To this end, internal auditing furnishes them with the activities, appraisal, recommendation counsel, and information concerning the activities reviewed.
Throughout the world internal auditing is performed in diverse environment and within organisation which very in purpose, size, and structure.
In addition the laws and customs within various countries differ from one another.
The differences may affect the practice of internal auditing in each environment internal auditors owe a responsibility to both, providing information about the adequacy and effectiveness of the organizations systems of fraud detected and the control of performance. The information furnished to each may differ in format and detail, depending upon the requirements and requests of management and the board. Internal auditors must be independent of the activities they audit. Such independent freely and objectively without independent, the desired results of internal auditing cannot be realized.
1.2 STATEMENT OF PROBLEM
The reason why internal audit is performed cannot be over emphasized. It should be noted, that modern business arrangement is so complex that ownership needs be separated from its management. Hence there is need for internal auditing.
The process by which the manager reports on the business is achieved by preparing the financial statements which is regarded as “STEWARDSHIP ACCOUNTING”.
The problem that is usually encountered is whether the owners of the business will believe on such financial statements prepared by the managers. Lack of credibility arises because of the following
(1) Errors in the financial statements not revealed.
(2) Fraud that occurs but not disclosed or discovered.
(3) Financial statement maybe incomplete.
(4) Financial statement may fail to disclose relevant information.
The appointment of internal auditors is the solution to the problem of credibility.
1.3 OBJECTIVE OF THE STUDY
Internal auditors should be objective in performing audit. The objective of internal, auditing is to assist all members of management in the effective discharge of their responsibilities by furnishing them with analyses, appraising activities reviewed. Internal auditors are concerned with any phase of business activities in which may be of service to management. This involves going beyond the accounting and financial record to obtain a full understanding of the operations under review.
Given this objectives, the statement identifies several internal audit activities.
(1) Reviewing and appraising the soundness, adequacy, and application of accounting, financial and control at reasonable cost.
(2) Ascertaining the extent of compliance with established policies, plans and procedures.
(3) Ascertaining the extent to which company assistance are accounted for and safe guarded from losses of all kinds.
(4) Ascertaining the reliability of management data developed within the organisation.
(5) Appraising the quality of performance in carrying out assigned responsibilities.
(6) Recommending operating improvements.
The objectives and the six related activities describe the predominal activity of contemporary internal audit practice. Internal auditing is no longer confirmed to financial matters, it is much broader and much more pervasive.
1.4 RESEARCH QUESTION
1. Why is independence important for the internal auditor?
2. Why is communication of results important to the internal auditor?
3. What is the basic objective of the internal auditor?
4. What are the professional standards for the performance of work for internal auditing?
1.5 STATEMENT OF RESEARCH HYPOTHESIS
In recent years, however, internal auditing has become increasingly oriented toward operational control, oversight, and protection all of which are major, rather than management. Internal, auditing is moving further away from financial auditing, its traditional role, and closer toward operational auditing, its emerging role. The institute of internal auditors statement of responsibilities under scores the significance of independence.
“Independence is essential to the effectiveness of internal auditing. This independence is obtained primarily through organisation status and objectivity.
“Thus the institute identifies organizational status and objectivity as the primary means for achieving independence from personnel and activities, respectively. The organizational status of the auditing functions and the support accorded to it by management are major determinants of its range and value.
1.6 SIGNIFICANCE OF RESEARCH
The role of internal auditor in all organisation helps the standards of professional conduct and for greater protection against inefficiency, misconduct, illegibility, and fraud. There is more realistic recognition of the fact that internal auditor can contribute importantly to satisfying the expanded protective needs of an organisation. At the same time there is the continuing truth that organization must be protective and achieve the best possible utilization of their resources. The warfare society is directly dependent on that productivity. Moreover, unless organisation are productive they cannot survive and be the focus for protective concerns. There is also greater recognition that internal auditors can make major contributions in helping organizations achieve the needed productivity. Together, therefore, these basic needs for production and productivity requires the need of internal auditors.
1.7 SCOPE OF THE RESEARCH STATEMENT
Throughout the 1940s and 50s internal audit activities in many organisation focus upon financial auditing, and internal audit departments were heavily in the review of financial statements.
Today, however, internal auditing takes on a much broader perspective, as suggested in the institute internal, auditors. Every organisation can exist for a variety of purpose. It is then most productivity made possible to achieve the organizational objectives. In that endeavour responsible managers requires the assistance of the internal auditing group.
Thus there is need for internal auditing in all types of organisation and there is a common body of personal knowledge that applies to all of the varied internal auditing activities.
There is potentially a need for the services of the internal auditors at any organizational level in any particular company or organisation. This means that there can be legitimate needs for internal auditing services by the stock holders, the board of directors and by the responsible management at the subsidiary or divisional level and other lower levels of an organisation.
In conclusion, it is the hope of the researcher that at the end of the project study, the concept, problems will truly represent the concept problems prospects and impact of internal audit on the manufacturing sector of the Nigeria Economy and also suggestion are expected to be appropriate and applicable.
1.8 LIMITATION OF THE RESEARCH STATEMENT
The decision that an internal audit of some type is to be made can come about in a variety of ways. It can be requested by the person who has the responsibility for the operational area to be reviewed, it can be requested by a still higher level officer, or it may be initiated by the director of internal auditing himself as a part of his own broader program of needed audit coverage. The significance here is that in the first instance the receptivity for the audit has been at least partially established.
However, there is still the further necessity of trying to provide the responsible offer with the proper professional intention of first importance is the need for a face-to-face discussion, it at all practicable, although frequently this must be by telephone. In any event there is the need to demonstrate to the extent needed that:
The internal audit is part of an overall program mandated by high-level authority to meet higher level organisation needs for both protection and maximum constructive benefit. The objectives of the review is to provide maximum service in all feasible managerial dimension.
1.9 DEFINITION OF TERMS
Auditing has been regarded, as the activity carried on the auditor when he verifies accounting data, determine the accuracy and reliability of accounting statements and reports and then reports upon his effects. It is an activity carried on by independent person with the aim of reporting on the truth and fairness of a financial statements.
Another type of auditing internal auditing exist in business and this research deals with it.
Very large organisation (and some small ones) ahs found a need for an internal audit in addition to an external audit. Internal auditors are employees of the organisation and work exclusively for the organisation. Their functions partly overlap those of the external auditors and in part are quite different.
The precise function of external auditors are either laid down by status or embodies in a letter of engagement. The functions (which are rarely precisely laid down) of internal auditor are determined by management and very greatly from organization to organisation.
Internal audit can be defined as “An independence appraisal function established by the management of an organisation for the review of the internal control system as a service to the organization. It objectively examines, evaluates and reports on the adequacy of internal control as a contribution to the proper, economic, efficient and effective use of resources’ internal auditing is thus, carried on by independent personnel.
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