CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
As government has grown in scope size and complexity so too the need for internal auditing accounting for and controlling government receipts and expenditure has resulted in the need for a staggering number of government clerks, accountants and auditors. The need for control over government revenue appropriation and expenditure should not be surprising federal, state and local government is actually the largest industry in the country. However the need for efficient and effective internal auditing system in government ministries and extra- ministerial department can not be over emphasized as the complexity of government activities is obvious . the annual budgets by federal state and local government are generally incorporated into governmental accounting system and financial reports, this is not the case in private sector business organization. Thus the annual budgets in conjunction with government financial reports are the primary focus of public sector audits. Internal auditing is an independent appraisal function established within an organization to examine and organization Taylor and Glezen (1979) it is mainly concerned with appraised of government activities for the review of accounting financial and operations as a service to the management.
INTERNAL EXTERNAL AUDITOR
A person who undertakes audit function is called an auditor. Internal audit has been described as an independent review of operation and records. Sometime continuous undertake within an organization by especially assigned staff of the organization as basis for long protection and constructive services to management Ubesis (1997). External auditor is an independent examination of financial statement of an organization an auditor. Other than an employee of an organization but by appointment by the share holders, like external audit, internal auditing had its role in accent time infect internal and external audit had essentially the same beginning there was no distinction between them prior to the nineteenth century “Ricchute (1975). Both group of auditor rely on the same data base. Also the internal user rely on both internal and external auditors and external user rely on external auditors. Importantly, external auditors can sometime rely upon an internal auditors work when the internal audit function is strong.
As a result an organization internal audit function can have some effect on the scope of independence external auditors extermination. As an independent contractor, the external auditing firm reserves the right to direct and control its own employees, the external auditor is free to use some methods and to expand or duce the kind of works they do. An internal auditor must be independence of both personnel and operational activities of the organization. Independence is essential to the effectiveness of internal auditing. The independence is obtained primarily through the organization independence is essential to the effectiveness of internal auditing.
The organizational status and objectively. Inadequate independence makes internal auditors conclusion and recommendation to be biased. Although internal and external auditing use the same audit methodology they have different objective when conducting and it activities. The objective of internal auditor is to assist management concerning activities reviewed in the organization while the external auditors objective is the to express an opinion in the finical statement. Also external auditing is a societal control which gives external financial information it user internal control serves the organization i.e an organization control which measure and evacuate the effectiveness of the other organization control however, this project in very much interest in the internal audit function the government miniseries. It is mainly con cerned with the appraisal of government activities for the review of accounting financial and operations as a service to the management internal auditing is more or less a management internal auditing is more or less a managerial control which function by measuring and evaluating the effectiveness of other activities that is normally done by an employee. The internal audit assures existence of effective internal control in the policies established by the government
FUNCTIONS OF INTERNAL AUDITOR
1. Internal auditor monitors the economical and efficiency in the use of resource. It appraises the economy.
2. Safeguarding of assets; it should review the means of safeguarding assets also very the existence of such assets.
3. Internal auditor ensures reliability and integrity of information. They review the reliability and integrity of financial information and the means used to identify measure, classify and report such information.
4. Compliance with policies plans procedures laws and regulation the internal audit review the system to ensure compliance with the policies plan, procedures, laws and regulation which could have a significant impact on operation and reports. They determine whether the organization is in compliance
5. It review where necessary make recommendation for the improvement of system control and producers to ensure that they are both efficient and effective in the light of changing circumstances and practices.
REPORTING SYSTEM
Internal audit terminates when a result is submitted to the chief executives in the government ministries. Reporting is a fundamental element of auditing. There is a basic requirement to report the result of every internal audit assigned to auditor general and accountant general to certify to what degree he is satisfied with the safeguard of government resource against fraud control of receipt and payment and accuracy of accounting records. The audit report objective clear, concise constructive and timely. It is the responsibility of the internal auditor to report his findings exactly as observed. He should be careful in giving department credit for excellence lastly the report should be submitted to the management chief executive in time. (Amunu partners 1989) under the civil service reform of 1988, the internal auditor of each ministry is directly responsible to the chief executive. He is expected to ensure continuous audit of the accounts and record of revenue expenditure, plans, allocated and unallocated store. He is expected to submit to his chief accounting office and the auditor general a defiled audit programm and there after report periodically on the true progress of the audit, issue special report when essay in his opinion for attention on any irregularities department from earlier internal audit report or recommendation.
1.2 STATEMENT OF PROBLEM
In recent years there has been a general out cry by the public on the unmdsi-able state of internal audit service provided by the internal auditors service provided by the internal auditors. This result to fruitless impact of the internal functions. It could be seen that human element are some of the constraints hankering the provision of quality and efficient work by the auditors to management shortage of well qualified professional in audit units has been a problem in government ministries, and redeployment worsens the situation. Significant audit function are performed by non- accountant staff who do not appreciate its importance. It should be noted that there is a desperate need for skilled and experienced staff in all the ministries and parastatals because very few department are managed by professionally trained and experience personnel .
To improve the impact of internal audit in its expected role management should be provided with qualified staff to cope with the existing duties. Internal audit staff are not usually considered for training under the manpower development and training programme of the organization. Ac cording to hall the purpose of training is to supplement the trains academic education or to train him to undertake work in a higher grade. It is however almost impossible to decide where education ends and truing starts (19 75). This work will study and ascertain the degree of existence of the problem of qualify audit service rendered shortage of quilted professionals and checks with respect to established procedures and controls.
1.3 OBJECTIVE OF STUDY
The objective of internal auditing in ministries is to assist all members of government ministries and extra ministerial department in the effective discharge of their responsibilities by providing them with objective analysis appraisals recommendation and comment of the activities reviewed. The internal auditor is concerned with the phase of government activities, which he is engaged to serve. He is the “watch dog” of the department that is primary concerned with evaluation compliance and verification and should be seen working unbiased. The objectives of this study are:
a. Ascertainment of the extent to which government finance and property are accounted for and safeguarded from losses of all kind.
b. Assessment of the impact of internal audit in compliance with policies plans procedures, law and regulation established in the system.
c. Assessment of the effectiveness of the organizational operation in obtaining its objective and efficiency with which the organization management carried out its progrmme As a general guide every member of internal audit team must be conversant with the financial instruction or memoranda tenders board rule current budgets and other related document.
1.4 SCOPE AND LIMITATION OF STUDY
Scope: The spread and coverage of this study is mainly the audit unit of ministries of education and works and housing of Enugu. State these are the two department or ministries chosen to represent all the ministries in Enugu state since their operational modes are relatively the same. However, due to the nature of this study the work done is limited to functional department directly involved with audit department for financial and operational. Audits such as personnel department incharge of staff performance and welfare, finance and supplied department in charge of purchases custody of property and general stores account department in- change of all financial records and disbursement of cash and finally the administrative department that are in-charge of general information by the staff of the ministries.
1.5 RELEVANCE OF STUDY
This study will shown the practical situation and extent to which the internal audit unit of government ministries carrying out their expected roles and duties. The study will be relevant to internal audit organization both private and public sectors student and professional in understanding what happens in practice in government functional unity. This project will be helpful in solving practical problem associated with auditing especially to student and any other person with little or no practical auditing experience. It will further the treatment of what could be the possible causes of internal auditors incompetence and examine the possible constraints that may militate against their efficient performance. In addition the extent of the application resource in accomplishment of established objectives and goals for program or operation to the management and public in advancement of internal auditing in organization
REFERENCES
1. Amumu & Partner; management, finance and research conultants service on internal auditing in government july 4 to July 1,1989.
2. Hall L, Business Administration English Language Book society second edition (September 1974) P. 225
3. Howard L.R; Auditing the English language Book Society seveth edition Mac Donald and Evans Limited (1982) P.2
4. Rechute David. N Auditing concepts and standard Cincinnati Ohio: Southwest publishing (1982) P.7
5. Taylor Danald H. and Glezen G.w, Auditing integrated connected and procedures; York. John Wiley (1979) P.31 Ubesis M.C; Theory and Philosophy of Auditing Esut Enugu (1997) P.5 Handout.
