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07030248044ABSTRACT
The purpose of this research work is to identify strategies for the minimization of financial audit problems in the public sector. The researcher addressed the under listed problems in the process of the research. The public sector is plagued with inefficiency which is needed to be improved. She wanted to find out; how often auditors give audit reports in public sector. If public sector auditor can be skilled to cope with the present computerization of government account, If the internal auditors in the public sector are very effective. The researcher embarks on this study for the purpose of expressing lapses present in the audit of government account in PHCN and also addresses such problems that may arise from the statement of problem. On the source data to be explored, the researcher will make use of both primary and secondary data. This means that questionnaires will be applied. The statistical tool use for data analysis will be the simple percentage and chi-square method. This method will be chosen because the researcher consider them to be simple to use and easy to understand and that the result from them are more reliable. The researcher made the following findings: The internal control auditors in the public sector are very effective, treasury department in the public sector co-operate with auditors and the Public sector auditors are not skilled enough to cope with the present computerization. The researcher recommends that qualified accountants by training and profession should be made to head the audit section as opposed to the present trend of deploying clerical officers to head the unit. At the end of the study, the researcher intends to have helped in identifying the problems associated with government audit, how to minimize them, how efficiency will be introduced into government accounting and auditing and how the users of government financial statement will benefit from the improved auditing standards and practice.
TABLE OF CONTENT
Content Page
Title Page ii
Approval Page iii
Dedication iv
Acknowledgement v
Abstract vi
Table of content vii
CHAPTER ONE
1.0 Introduction 1
1.1 Background of the study 2
1.2 Statement of the problem 4
1.3 Population of the Study 5
1.4 Research question 5
1.5 Research hypothesis 6
1.6 Limitation of the Study 6
1.7 Significance of the Study 8
1.8 Definition of terms 9
CHAPTER TWO
LITERATURE REVIEW
2.1 Concept of Auditing 11
2.2 Public Accounting 14
2.3 Legal considerations involving auditors in the public sector 16
2.4 Role of financial management in ensuring accountability
and fraud prevention 17
2.5 Inspectorate and investigation unit 19
2.6 The professional conduct of auditors and their approach
in the public sector 21
2.7 Accounting System 23
2.8 Internal Control 25
2.9 Fraud 27
2.10 Computer Auditing System 27
2.11 The problem facing auditors in computer based accounting systems 28
2.12 Internal audit in the public sector and obstacles to its efficiency 30
2.13 Public accounting and external auditing 30
2.14 Auditing failure 31
2.15 Technical issues 32
2.16 Summary of literature review 33
CHAPTER THREE
RESEARCH METHODOLOGY
3.0 Introduction 38
3.1 Research Design 38
3.2 Area of the Study 38
3.3 Population of the Study 39
3.4 Sample and Sampling Techniques 39
3.5 Instrument for Data Collection 40
3.6 Validity of Instrument 41
3.7 Reliability of Research Instrument 41
3.8 Method of Data Collection 42
3.9 method of data analysis 42
CHAPTER FOUR
4.0 Data Analysis and Interpretation 44
4.1 The analysis of questionnaire 44
4.2 Testing of Hypotheses 47
4.3 Discussion of Findings 57
4.4 Summary 57
CHAPTER FIVE
5.1 Summary of findings 58
5.2 Conclusion 60
5.3 Recommendation 61
Bibliography 63
Appendix 1 65
Questionnaire 66
CHAPTER ONE
1.0 INTRODUCTION
Auditors in the public sector have a lot of problems in Auditing Government Accounts. The researcher embarks on this study for the purpose of identifying these problems as well as the strategies for the minimization of those audit problems in the public sectors and government accounts, using Power Holding Company of Nigeria as a case study. He will also address such problems that may arise from the statement of the problems of this work. The researcher will make use of both primary and secondary data, which means, that research method will be chosen because the researcher consider them to e simple to use and easy to understand and that the results from them are more reliable.
At the end of the study, the researcher intends to have helped in identifying the problems associated with government audit; how to minimize them, how efficiency it will be introduced into government accounting and auditing and how the users of government financial statement will benefit from the improved auditing standards and practices.
The researcher will in this chapter give the Background of the study, Statement of Problem, Purpose of the Study, Research Question, Hypothesis, Limitations of the Study and Definition of Terms.
1.1 BACKGROUND OF THE STUDY
The account system (including the system of auditing) in Nigeria was patterned to the system of auditing obtainable from Britain. According to Atlan Burns (1980), Britain was Nigeria’s colonial master prior to her independence on 1st October, 1960. Hence there is no significant difference between the civil service operational from the British government.
In view of the historical background, various ministries and parastatals were established by the government at both federal and state levels. In each ministry, account units were created which handle all accounting problems and system of the ministries to ensure that the public funds committed to these parastatals are judiciously accounted for. The Federal/State Audit Department was established. This department is headed by the Auditor General of the Federation. The Audit Act of 1956 directs the Auditor General of the Federation to, “prepare and transmit a special report to the National Assembly where necessary as it concern other issues such as programme, project, activities, function or transaction concerning fraud or misappropriation of public funds and property in the office. Recently, there have been several changes in the civil service structure and operation in the country which have brought about a lot of problems in the Audit of Government Accounts. Though the changes were affect with reasonable objectives in view, but still have given rise to such problems as far as the Auditors handling the public sector and government accounts are concerned.
Multiplicity of fund is an element on government financial report which have powerful influence on audit procedures. These are the problems which have made the researcher to look into the study of the strategies for the minimization of Audit problems in the public sector of the Federation using Power Holding Company of Nigeria as a case study.
1.2 STATEMENT OF PROBLEM
The researcher addressed the following problems in the process of the research work.
(1) The public sector is plagued with inefficiency which needed to be improved. This inefficiency is one of Audit problems in the public sector of the economy.
(2) A review of the system of Internal Control generally referred to as the Interim Audit. For Auditors to be able to perform on effective Audit of public sector, the auditor has to carryout the necessary control in the organization he wants to perform audit work. The researcher therefore dived into finding the following;
(i) If the Auditors in the public sectors often give audit report?
(ii) If there is a necessary co-operation required between the audit department and treasury department in the area of investigations and monitoring of the required accounts.
If the public sector auditors are skillful enough to cope with the present computerization of government accounts.
1.3 PURPOSE OF THE STUDY
This work sought to determine the purpose of expressing lapses associated in auditing of Government Accounts vis-à-vis that of Power Holding Company of Nigeria. Other objectives of the study which the researcher intends to achieve are listed as follows:
(1) To ascertain how often public sector auditors give audit report
(2) To assess and test if the internal auditors in Power Holding Company of Nigeria are effective.
(3) To ascertain and explain the need for co-operation between the Audit department and the financial department in the area of fraud prevention.
(4) To ascertain the skill of public auditors in coping with the ongoing computerization.
1.4 RESEARCH QUESTIONS
1. Are the internal control auditors in the public sector very effective?
2. does the treasury department in the public sector co-operate with auditor?
3. Are the public sectors auditors skilled enough to cope with the present computerization?
4. Do auditors often give audit reports in public sector?
1.5 RESEARCH HYPOTHESIS
Ho: There are no effective internal auditors in the public sector
Hi: There are effective internal auditors in the public sector.
Ho: Treasury department in public sectors do not co-operate with auditors.
Hi: Treasury department in public sectors co-operate with auditors.
Ho: Auditors in the public sector are not skilled enough to cope with the present computerization of public sector.
Ho: Auditors is public sector does not give audit reports often
Hi: Auditors is public sector give audit reports often.
1.6 LIMITATION TO THE STUDY
This study is designed to deal thoroughly with the public sector accounting and auditing in all areas of the government parastatals. However, the researcher during the cause of carrying out this assignment stumbled into services of constraints such as pressure of work.
In the case of the financial constraint; the researcher on her status as a student had not enough money at her disposal and this coupled with the hard times provoked by this period of galloping inflation and austerity posed too great a problem.
The researcher also had in her schedule to attend to other equally pressing obligation, which she cannot inevitably evade. She therefore had no option than to make do with the smallest possible time in bringing out this work. Most of the respondents chosen by the researcher developed lukewarm and non-challant attitude towards answering the questionnaires, culminating in returning them late for the researcher’s use. However, the researcher got all the questionnaires from all the respondents from which she made conclusions.
The collection of material for this project topic was by no means an easy task. This was more so because of the singular fact that these materials are not found on the same place. To get at these materials, the researcher had to run from one place to the other which often times because futile and the cost of transportation is high.
The researcher as at the time of this project work had to grapple with some other academic oriented problems. Since these other works must have to be attended to, common sense would demand that the time appointed to these problem is definitely not adequate. The splitting of this small time and resource among these, reduces the extent of perfection of this research work to the barest minimum.
1.7 SIGNIFICANCE OF THE STUDY
The researcher became inspired to delve into this topic based on her belief that the workers will be of immense benefit to the following category of the people in Nigerian society.
(i) Government: The government will benefit from the place by enjoying the improved auditing standard that will arise from the identification and solution of the audit problems which will result to audit efficiency.
(ii) Private Auditing Firms (external audit): The research will be significant to the external auditors in that they will now learn how to audit government account in accordance with the relevant auditing standards.
(iii) Student: This study will be significant to student in higher institutions of learning for reference and academic purposes.
(iv) Subsequent Researcher: The subsequent researchers will value this piece of work since they can easily pick more research topics from the research questions and research further on them.
1.8 DEFINITION OF TERMS
(i) AUDITING: Auditing is the independent examination in order to ensure that they have been properly kept, reflect the transactions of the organization and that these transactions are in accordance with the laid down rules and regulations.
(ii) CAAT: Is an auditing term which simply means “Computer Assisted Auditing Techniques” quantity and quality are acquired at the lost cost.
(iii) EFFICIENCY: Efficiency is the production of as higher output using the same resources or in the production of the same level of output using a lower input.
(iv) EFFECTIVENESS: Means the extent to which objective or goals are achieved.
(v) CO-OPERATION: The act of doing something together or working together towards a share aim.
(vi) COMPUTERIZE: To provide a computer or computer to do the work of something.
(vii) CONSTRAINT: A thing that limits or restricts something or your freedom to do something.
(viii) CULMINATE: To end with a particular result or at a particular point.
(ix) INVESTIGATE: An official group of inspectors who work together on the same objects.
(x) INTERNAL CONTROL: Is a measure used by management to regulate and control the affairs of business.
(xi) NON-CHALLANT: Behaving in a calm and relaxed ways that gives the impression that you are not feeling any anxiety.
(xii) MULTIPLICITY: Means a great number and variety of something.
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