The Role of Internal and External Auditors in Nigerian Public Organization
Chapter One
Objective of the study
The main objective of the study is to investigate the role of internal and external auditors in Nigerian public organization. The specific objectives are;
- To ascertain the relationship between internal and external auditors in public organization
- To ascertain the role of internal auditors in public organization
- To ascertain the role of external auditors in public organization
CHAPTER TWO
REVIEW OF RELATED LITERATURE
CONCEPTUAL FRAMEWORK
INTERNAL AUDIT
Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. Internal auditing might achieve this goal by providing insight and recommendations based on analyses and assessments of data and business processes. With commitment to integrity and accountability, internal auditing provides value to governing bodies and senior management as an objective source of independent advice. Professionals called internal auditors are employed by organizations to perform the internal auditing activity.
The scope of internal auditing within an organization may be broad and may involve topics such as an organization’s governance, risk management and management controls over: efficiency/effectiveness of operations (including safeguarding of assets), the reliability of financial and management reporting, and compliance with laws and regulations. Internal auditing may also involve conducting proactive fraud audits to identify potentially fraudulent acts; participating in fraud investigations under the direction of fraud investigation professionals, and conducting post investigation fraud audits to identify control breakdowns and establish financial loss.
Internal auditors are not responsible for the execution of company activities; they advise management and the board of directors (or similar oversight body) regarding how to better execute their responsibilities. As a result of their broad scope of involvement, internal auditors may have a variety of higher educational and professional backgrounds.
The Institute of Internal Auditors (IIA) is the recognized international standard setting body for the internal audit profession and awards the Certified Internal Auditor designation internationally through rigorous written examination. Other designations are available in certain countries. In the United States the professional standards of the Institute of Internal Auditors have been codified in several states’ statutes pertaining to the practice of internal auditing in government (New York State, Texas, and Florida being three examples). There are also a number of other international standard setting bodies.
Internal auditors work for government agencies (federal, state and local); for publicly traded companies; and for non-profit companies across all industries. Internal auditing departments are led by a chief audit executive (CAE) who generally reports to the audit committee of the board of directors, with administrative reporting to the chief executive officer (In the United States this reporting relationship is required by law for publicly traded companies).
CHAPTER THREE
RESEARCH METHODOLOGY
Research refers to a process of arriving at dependable solutions to problems through planned and systematic collections, analysis and interpretation of data. Research is an important mechanism for enhancing knowledge and also promoting of progress in order to enable man to relate to his environment for the purpose of achieving his objectives.
Methodology on the other hand refers to the way in which some things is being carried out. In other words, it is a set of method used in working at something. Therefore research methodology relates to the way in which problems are systematically solved through planned collection and analysis of data. Information and vital issues are always discovered through careful enquires and they are in verifying and broadening the existing knowledge.
RESEARCH DESIGN
This comprises of the techniques used in gathering the data for a proper project analysis. The data necessary to help solve the problem faced with internal and external audit role in the public sector, which is Oyo state, ministry of finance. The research decided to employ a type of method and procedure in getting the population size of the ministry and its complexity of which gave him the idea for the generation of the needed information for the study. In carrying out the study, the research made use of both primary and secondary source of data to gather the information needed for the study.
SOURCES OF DATA
PRIMARY DATA
This can be done through personal interview, administrating of questionnaire to the people on observation. The data collected by the researcher is the direct information decided by the researcher from employees of the Oyo state ministry of finance on the topic of study. For the purpose of this research work questionnaires were distributed to staff members of the ministry of finance to be filled for relevant information needed for the research work
SECONDARY DATA
The secondary source of data entails information gotten by the researcher from already existing materials that are related to this topic of study, hence the secondary data for this was obtained by the researcher from textbooks, published materials of bureaus, newspaper, magazines, journals and securitization of existing documents
AREA OF THE STUDY
The area of this research study is restricted to the ministry of finance, Oyo state
POPULATION OF THE STUDY
The population consist of all staff of audit department and other department of the Oyo State ministry of finance are considered as the population of the study. The ministry under study is having a total of one hundred and forty-five officers. The population is made up of:
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION.
DATA PRESENTATION.
The presentation of data collected means the way of presenting and arranging the different forms of data obtained through various data collecting techniques to enable the researcher perform analysis and extract conclusions from it.
The data collected will be presented in simple table. The data analysis was based on the answers to the questions received from the staff of the Oyo state ministry of finance. The key questions in the questionnaires will be analyzed by the use of simple percentage. The formulation hypothesis will also be tested with the aid of necessary tables and statistic figures.
A total of 106 questionnaires were distributed and a total number of 92 were returned. Efforts were made to recover the remaining 14 questionnaires, but due to high rate of transportation fare and time factor, they have not yet been recovered
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
SUMMARY
The study was undertaken to survey the role of internal and extern auditors in Nigerian public sector. The focus of this study was to evaluate the relationship between internal and external auditors in Nigerian public organizatipon to investigate the lack of proper implementation of audit and also the lack of proper segregation of duties in the internal audit.
In sourcing for information various relevant literature was reviewed on the duties, function, roles and challenges of the internal and external audit in the Nigerian public sector.
Chapter three highlighted the research method used for the study which consisted of the area of the area of study, population sample size, method of data collection and sampling techniques and analysis of questionnaires which were structured for data collection and were administered by the researcher to the staff of Oyo state ministry of finance.
At the end of the study discussion on findings were made based on the findings from the study
CONCLUSION.
At the beginning of the study, the researchers’ incentive is to survey into the role of internal and external auditors in Nigerian public organization. Thus, based on the analysis of data, it is concluded from this study that the internal and external auditor have a relationship that can help organization detect fraud among public officers and this has a negative effect on the efficiency of the audit department. The study also ascertain the role internal and external auditors played in Nigerians public organization
There is need to demonstrate accountability in the use of public money and efficiency in the delivery of service, for this to be achieved the government must look into the challenges hindering the efficiency of the audit and give proper attention to this unit.
RECOMMENDATIONS.
I recommend that Improvement should occur on two levels; management needs to know what internal auditing can firmly contribute and internal auditing needsto become more professionally competent and focused on the organization’s objective. A more professional internal and externa auditors will be able to assist management in decision making and thus will fill a more proactive and forward looking role in adding value to the organization’s objective.
Installation or operation of adequate accounting system, some of the audit evidence is available from accounting records that are reliable and this can only be made available if good accounting system is put in place.
Salaries and other fringe benefits of the staffs should be enhanced and paid as when due in order to reduce any fraudulent act and practices and employ more staff so as to produce more efficient and sophisticated work output.
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