The Significance and Objective of Source Document in Auditing and Investigation (A Case Study of P. Z. Cusson Plc, Aba)
Chapter One
OBJECTIVES OF THE STUDY
- To find out what source document are
- To find out what auditing and investigation mean
- To find out the significance and objective of source document in auditing and investigation.
CHAPTER TWO
REVIEWED OF RELATED LITERATURE
SIGNIFICANCE OF SOURCE DOCUMENT
In accounting, a source document is a piece of paper or an electronic record that serves as evidence of a financial transaction. Source documents are critical in accounting because they provide the foundation for recording and tracking financial transactions, which is essential for accurate financial reporting.
There are various types of source documents in accounting, including invoices, receipts, checks, purchase orders, and bank statements. Each of these documents provides specific information about a financial transaction, such as the date of the transaction, the amount of money involved, and the parties involved.
The significance of source documents in accounting can be summarized as follows:
Evidence of Transactions: Source documents provide evidence of financial transactions that have occurred. This evidence is crucial for verifying the accuracy and completeness of financial records.
Basis for Recording: Source documents serve as the basis for recording financial transactions in the accounting system. Without source documents, it would be difficult to know how much money was spent or received, when it happened, and who was involved.
Audit Trail: Source documents provide a clear audit trail, which is essential for tracking financial transactions from start to finish. This trail helps auditors and accountants to identify errors and discrepancies in financial records.
Legal and Tax Purposes: Source documents are also important for legal and tax purposes. They provide evidence of financial transactions that can be used in legal proceedings or for tax purposes, such as filing tax returns or claiming deductions.
Control over Transactions: Source documents enable organizations to have better control over financial transactions. By requiring source documents for all financial transactions, organizations can ensure that all transactions are authorized, recorded accurately, and properly approved.
source documents are critical in accounting because they provide evidence of financial transactions, serve as the basis for recording transactions, provide an audit trail, are important for legal and tax purposes, and help organizations to have better control over financial transactions. Without source documents, it would be challenging to maintain accurate financial records and ensure compliance with legal and regulatory requirements.
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 a the significance and objective of source document in auditing and investigation. P. Z. CUSSON PLC ABA form 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 he significance and objective of source document in auditing and investigation. P. Z. CUSSON PLC ABA. 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 significance and objective of source document in auditing and investigation. P. Z. CUSSON PLC ABA
Summary
This study was on the significance and objective of source document in auditing and investigation. P. Z. CUSSON PLC ABA. Three objectives were raised which included: To find out what source document are, to find out what auditing and investigation mean and to find out the significance and objective of source document in auditing and investigation.. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from P. Z. CUSSON PLC ABA. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
In conclusion, this study has highlighted the importance and objectives of source documents in auditing and investigation, with a case study of P.Z. Cussons Plc in ABA. Source documents are crucial in the auditing and investigation process as they provide evidence and information that can be relied upon to support audit findings and investigation conclusions.
Through a detailed examination of the source documents of P.Z. Cussons Plc, this study has demonstrated that source documents play a critical role in the assessment of the company’s financial and operational activities. The study has shown that source documents, such as invoices, receipts, bank statements, and contracts, can be used to verify the accuracy and completeness of financial statements, detect fraud, and evaluate the effectiveness of internal control systems.
Therefore, it is imperative for auditors and investigators to give adequate attention to source documents during their work. This study recommends that auditors and investigators should always obtain and verify the authenticity of source documents to support their audit findings and investigation conclusions. Additionally, it is essential for companies to maintain proper records of their source documents to ensure transparency, accountability, and compliance with regulatory requirements.
Overall, this study has provided insights into the importance of source documents in auditing and investigation, and it is hoped that this will contribute to the improvement of auditing and investigative practices in Nigeria and beyond.
Recommendation
The significance and objective of source documents in auditing and investigation are crucial to ensuring the accuracy and reliability of financial statements. As a case study, let’s consider P. Z. Cussons PLC ABA, a company that produces personal care products. Here are some recommendations on the significance and objective of source documents in auditing and investigation for this company:
Significance of source documents: Source documents are the original records of transactions, and they provide evidence that supports the financial statements. In the case of P. Z. Cussons PLC ABA, source documents such as sales invoices, purchase orders, and bank statements are critical in ensuring that the company’s financial statements are accurate and complete.
Objectives of source document examination: The objectives of source document examination include verifying the accuracy and completeness of transactions, detecting errors and fraud, and ensuring compliance with laws and regulations. In the case of P. Z. Cussons PLC ABA, the objectives of source document examination would include verifying that all sales and purchases are accurately recorded, detecting any instances of fraudulent transactions, and ensuring compliance with tax laws and regulations.
Use of sampling techniques: In auditing and investigation, it may not be possible or practical to examine every single source document. Therefore, sampling techniques can be used to select a representative sample of documents for examination. In the case of P. Z. Cussons PLC ABA, auditors could use statistical sampling to select a representative sample of sales invoices and purchase orders for examination.
Documentation of findings: Auditors and investigators must document their findings and conclusions from examining source documents. This documentation serves as evidence of the audit or investigation process and provides support for any opinions or conclusions reached. In the case of P. Z. Cussons PLC ABA, auditors should document any errors or discrepancies found during the examination of source documents and any recommendations for improving internal controls or processes.
References
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