Effectiveness and Efficiency of Internal Audit as a Tool for Management Control
CHAPTER ONE
Aim and Objectives of the Study
The aim of the study is to under-study the effectiveness and efficiency of internal audit as a tool for management control and is to ascertain whether there is significant relationship between effective and efficient monitoring and fraud detection in Skye Bank of Nigerian while, objective of the study are:
- To evaluate the determinant for effective tools in management control.
- To assess the effects of internal auditing on internal control system of an organization.
- To under-study, the effectiveness and efficiency of internal audit as a tool for management control.
- To investigate the type of responsibilities internal audit has with the Board of the organization under which he operates.
- To examine the effect management interference on the internal auditors functioning with the respect to errors and fraud in the organization.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
INTERNAL AUDIT
MILLICHAMP 1996, defined internal audit as “An independent appraisal of an organization for the view of the internal audit control system as a service to the organization. It objectively examines, evaluates and reports on the adequacy of internal audit control as a contribution to the proper economic efficient and effective use of the resources”. Internal audit reviews existing accounting system and related internal work. It assists in the implementation of new accounting systems. It identifies and draws attention to management weakness in control or measures which are unsaid to the organization. To investigate and eliminate pilferage and fraud, thereby ensuring the survival of the organization
OBJECTIVES OF INTERNAL AUDIT
According to Adeniyi (2004), it state objectives of internal audit as:
- Reviewing of existing accounting system and related internal work.
- Assisting in the implementation of new accounting system.
- Reviewing company polices in the light of changing business conditions and recommending appropriate improvement.
- The assessment of the adequacy, accuracy, timeliness and relevance of management information system.
- Lasing with external auditor for the purpose of complexes for effort and insuring that prompt and proper action is taken on engagement data. pg.
- Identify and draw attention of management weakness in control or measures which are unsound to the organization.
- To assure the management that their internal audit organization is adequately alright.
- To carry-out special assignment giving by the audit committee from time to time. ix) To carry-out special investigation on management request.
- To carry-out detail test of transactions and balances.
- To advice the management of various aspect of their operation such as matters involving financials.
- To make a professional opinion on the true and fair view of an organization 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 effectiveness and efficiency of internal audit as a tool for management control. Skye bank 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 effectiveness and efficiency of internal audit as a tool for management control. 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 effectiveness and efficiency of internal audit as a tool for management control
Summary
This study was on effectiveness and efficiency of internal audit as a tool for management control. Three objectives were raised which included; To evaluate the determinant for effective tools in management control, to assess the effects of internal auditing on internal control system of an organization, to under-study, the effectiveness and efficiency of internal audit as a tool for management control, to investigate the type of responsibilities internal audit has with the Board of the organization under which he operates and to examine the effect management interference on the internal auditors functioning with the respect to errors and fraud in the organization.. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from skye bank Enugu. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
Since effective management control can be achieve, and IA play key role in ensuring effective management in public sector, there is the need for today’s auditors to acquire the requisite technique and skills in computer operations and electronic data processing in order to carry out their work effectively to continually support IA effectiveness. And management should put in place a conducive environment for internal auditor to perform their duty because of the impact, which it has on AI effectiveness. Therefore training personnel as well as other training infrastructure becomes an important ingredient in the successful operation of internal audit effectiveness in public sector organizations. Heads of internal audit unit should be in attendance at top management meetings to be aware of policies affecting organizational objectives
Recommendation
- The internal audit unit of the organization should keep ethical standard by keeping up to date internal audit manual and train its internal auditors in forensic accounting.
- Internal audit units should always draw annual audit plan which is the focus of the company as it will help them to have efficient operation.
- The internal audit unit of the organization should always submit their audit plan to the management who will have to be pro-active and take action according to findings of the plan.
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