Auditing Efficiency for Improving Company’s Performance
Chapter One
OBJECTIVES OF THE STUDY
The objectives of the study are;
- To find out whether the company’s auditing process is efficient.
- To find out whether auditing efficiency is a tool for improving a company’s performance
- To find out whether auditing efficiency diagnose company ills and weakness.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Internal Audit
Internal Audit is part of the internal control system put in place by management to measure, analyzed and evaluates the efficiency and effectiveness of other controls established by management in order to ensure smooth administration, cost minimization, ensure capacity utilization and maximum benefit derivation (Unegbu and Obi, 2012). Adeniyi (2011), conceptualized internal audit as part of the internal control system put in place by the management of an organization to ensure that the financial operations are correctly carried out according to the law and also in accordance with the wishes of the management. Ljubisavljevic and Jovanoyi (2011), stated that internal audit determines the reliability, reality, and integrity of financial and operational information that comes from different organizational units, on which appropriate business decisions at all levels of management are based. Momoh (2005), conceptualized that internal auditing is used to provide assurance to the management and that the internal control system in the organization is sound in design and effective in operation and also helps to achieve value for money. Similarly, Okwoli (2004), stated that the present requirement of internal audit is not the detection and prevention of fraud and errors, but reviewing the system of internal control. This is because, in public organizations, internal audit is meant to carry out an independent appraisal of the effectiveness of internal controls and other financial controls operating in such ministry. Internal audit is an additional safeguard for proper financial control in the public sector. Each ministry, parastatal and government agency is expected to establish an internal audit division. The internal audit is responsible for the audit of all financial transactions by carrying out a continuous examination of all accounting books and records maintained in the organization with a view to checking or detecting fraud and correcting errors. It is concerned with the examination of the system and procedure in place so as to ensure conformity with the regulations, and that the system of internal control is adequate on continuously operating in accordance with government regulations (Badara, 2013)
Meaning of Audit
According to Eze (2005) one of the simplest ways of economizing efforts in an inquiring is to review one build upon the work already done by other. Santoki (1974) stated that an audit may be define or describe as an examination and evaluation of the authenticity, and therefore the reliability of the firm‟s business documents and records, and it also involves in making inquires to ascertain that the financial statements on which the auditor is reporting and which have been prepared from their records display a true and fair view of the financial results for the year under review and true and fair view of the affairs at the end. Taylor (1982) stated that an audit is an investigation by an auditor into the evidence from which the final revenue accounts and balance sheet, or other statements of an organizations have been prepared, in order to ascertain that they present a little and fair view of the summarized transactions for the period under review and of the financial statement of the organizations at the end date so to enable the auditor to report thereon. Okolo (1987), expressed that an auditor could be a conscientious and objective examination of an inquiry into, any statement of account relatively to money or money worth, the underlying documents and the physical assets where possible, as will enable the auditor to form an opinion as to know whether or not the statement of account present shows a true and fair view of whatever it purport to presents, and to report accordingly. Nwabueze (1997) stated that audit is an exercise which is carried out in order to lend credence to statements prepared by directors of the company (who are not the owners) for the use by the owners of business shareholders, creditors, the employees, the government etc) whereby the auditors express his opinion as to the true and fair nature of the transactions he examined while carrying out the audit. The institution of internal Auditors (IIA) defines an audit as an independent of examination by a statutory appointed person called the auditor to investigate an organization, its records and the financial statements prepared for them and thereby form an opinion on the accuracy and correctness of the financial statement.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine auditing efficiency for improving company’s performance. Nigerian breweries plc Enugu forms the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain auditing efficiency for improving company’s performance. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of Institutional development as a challenge to the auditing efficiency for improving company’s performance
Summary
This study was on auditing efficiency for improving company’s performance. Three objectives were raised which included; To find out whether company’s auditing process is efficient, to find out whether auditing efficiency is a tool for improving company’s performance and to find out whether auditing efficiency diagnose company ills and weakness. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from Nigerian breweries plc Enugu. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
This study which evaluated impact of auditing and internal control on the efficient performance of public enterprises observed the implicit existence of effective internal audit procedures to safeguard assets of organizations. It noted that adequate punishments existed for violations of internal audit procedure. However, the application of the available punishments for violations of internal audit procedures left much to be desired. The study believes that more effort should be directed at recruiting quality internal audit staff and updating their knowledge than engaging in interminable search for error – proof internal audit procedures.
Recommendation
- a) The recruitment process for internal audit staff should be thorough and transparent to ensure the enlistment of only qualified personnel.
- b) Management of Organizations should motivate staff of internal audit departments to painstakingly implement internal audit procedures.
- c) Management of Organization should co-operate with internal audit staff to promote effectiveness of the various control measures put in place.
- d) Regular training of the staff of internal audit departments is necessary to sharpen their skills of implementation of necessary procedures.
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