1.1 BACKGROUND OF THE STUDY
In the era of industrial revolution in Europe, businesses were carried out on sole proprietorship basis where the owners of such businesses were personally involved in the management of their business.
But due to this industrial revolution, it now brought about the creation in the separate body on which the responsibilities of the day to day activities were vested to manage these activities (those in charge of such activities are called managers). Also the public owned central government resources, as well as the nationalized industries are controlled and managed by the government itself.
All these gave birth to stewardship accounting. A process where the managers of business in the form of financial statement as such, a call is made for an independent examination and investigation of the evidence from which a financial statement has been prepared, whether they give a “true auditing can be defined, as the checking of someone else prepared account statement of account)”.
Alvin, A.A. and James K.L. (1976) defines auditing “as the process by which a competent, independent person accumulates and evaluate evidence about quantifiable information related to a specific economic entity for the purpose of determining and reporting on the degree of correspondence between the quantifiable information and established criteria”.
Also auditing has been professionally defined as “the independent examination of an expression of opinion on the financial statement of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevance law and regulations”.
The first act that legislated that accounts prepared must be audited by an independent third party with integrity was the 1888 act. At present times, the call for public accountability in the management of such resources in the face of divindling national economy has been actively advocated for and pursued as seen in increase of knowledge and public consciousness.
In line with the pursuit of public accountability in the management of funds, the civil service decree 1998 schedule iii (34), outlined that an auditor will report to his chief accounting office or auditor general progress of his audit.
- STATEMENT OF THE PROBLEM
The public service in general and Keffi Local Government area in particular is faced with many problems, which have rendered it ineffective. This problem borders mainly on the independence of auditor. Another issue is the qualification of audit in terms of operations custody of assets as well as a liability of records and precaution taken to safeguard the collection of money in the same view another issue is the adequacy of laws guiding the operation of the auditor whether it is being duly observed.
Finally, there is the issue of bad maintenance of system record an books of account for continuous review of accountability in the council.
1.3 OBJECTIVES OF THE STUDY
The following objectives are to be achieved:
- The review audit system as it affects development of every entity.
- To ascertain the role of played by the auditor in maintaining accounting records from which the governmental accounting is drawn.
- To ensure and uphold auditing standard in local council and ministries.
- To ascertain whether the system are in conformity with auditing guidelines and due implementation.
- To restore and sustain proper accounting system so that excessive loss could be minimized in management of fund.
- SCOPE OF THE STUDY
This means the range in which the research work is to be covered i.e. the area either long or wide. The project will study measurement of efficiency of auditing in the public service with Keffi Local Government Area Council as a case study.
The measurement of effectiveness in the management of funds involves; auditing as a control tool, the independence of the auditors his qualification, appointment and removal of auditor.
- SIGNIFICANCE OF THE STUDY
The importance of this study is to offer a “role model” of research work that will help in the development of auditing as a system and unit in an organization as well as an “engine room” for economy efficiency and effectiveness of resources management.
It will also be of great importance to account and supplies department in every entity of a business nature.
Lastly it also offers auditors, accounting student, stakeholders in any business and the general public a fountain of knowledge to tap from.
- RESEARCH QUESTION
- Does the auditing of the local government have adequate qualified personnel?
- Is audit function in the public service independent of the executive?
- How is it exercising its independence?
- Are there internal control systems in existence for effective operation?
- Has adequate and reasonable precaution been taken to safeguard the collection to public funds (money)?
- Are law relating to the two questions above (4 and 5) being duly observed?
- Are all system, records and book account being adequately maintained and controlled in order to provide a basis for review of accountability?
- STATEMENT OF HYPOTHESIS
Ho: An assessment of auditing and audit report has significant impact to the management of funds.
Hi: An assessment of auditing and audit report has no significant to the management of funds.
- DEFINITION OF TERMS
The application of skills or care in the manipulations, use, treatment of things no person or in the conduct of an enterprise operation etc.
These are files opened for staffs when they are employed. These files are opened up in duplicate i.e. one is being kept by the confidential registry in personnel department while the other one is retained with the staff.
VARIATION ADVICE FORM
This is issued by salary of finance department whenever salary is Amount to be prepared for new employees the form contains the grade level and the amount to be paid on that grade level.
LOCAL PURCHASE ORDER (L.P.O)
This is an order given to mostly contractors or suppliers to supply some relevant items to the stock of while are out stock.
CERTIFICATE OF PHYSICAL CLARIFICATION
This is certificate issued by internal audit department (unit) to the store unit after verifying cross checking that all the items supplied in the store conform with what was authorized to be purchased
This comprises the plan of an organization and all methods and procedures that are concerned with safe guarding of assets, such document and separation of duties.
Is a details listing and explanation of the specific audit procedures to be performed in the course of an audit engagement.
This is the principle of making public material information about the financial statements easily understandable.
This is the concept of using the same accounting principles or methods from year to year so that the successive financial statement issued by firm is comparable.
This is the violation of the legal duty or contractual obligation, which requires the exercise of conduct of exception good faith in the contract or assigned by one.
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