TABLE OF CONTENT
Title page
Certification
Dedication
Acknowledgement
Table of content
CHAPTER ONE
- Introduction
- General
background of the study
- Statement
of the problem
- Important
of the study
- Statement
of hypothesis
- Scope of
the study
- Significant
of the study
- Organization
and plan of the study
- Definition
of terms
CHAPTER
TWO
- Literature
review
- Meaning
and classification of fraud
- Nature and
classification of auditing
- Auditing
in an organization
2.5 Qualification and Qualities of an auditor
2.6 Auditor independence and certain degree of credibility
2.7 Efficiency
of the auditor
CHAPTER
THREE
- Research methodology
- Historical
background of Nigeria Bottling company
(NBC) Ilorin.
- Population
and sampling size
3.5 Method of data collection
3.6 Nature and
administration of the Questionnaire 42-43
3.7 Method of data
analysis
3.8 Profile of the
case study
CHAPTER FOUR
- Data
presentation and analysis
- Relationship
between internal auditor and external auditor
CHAPTER
FIVE
- Summary conclusion and recommendations
Bibliography
CHAPTER
ONE
- INTRODUCTION
Background of the study the word auditing comes from a Latin Word ‘’AUDIRE’’ ‘’TO HEAR’’, This is so because in those days the account of nobleman was checked by being read out to him by his steward. The steward has the responsibility of looking after the affairs at the estate during the absence of the noblemen.
However,
today auditing involves the checking at the account of an enterprise by a
suitably qualified auditor in order to enables the auditor to form an opinion
in the truth and fairness.
Fraud it is an act of criminal deception formed by many people in an establishment or within two people. These examples range from the public office holders who wish to embezzle public fund, a passenger who board a bus and refuses to pay and a contractor who criminally inflate the cost of executing the contract work.
It is also the international misrepresentations of
financial information by one or more individuals among management, employees,
or third parties. It involved the use of criminal deception to obtain an unjust
or illegal financial advantage. The impact of fraud can be quote subsentire on
a company’s operation. Therefore internal controls must be excellent.
The origin of an audit dates from ancient times when the land owners allowed tenant farmers to work on their land while the landowners themselves did not become involved in the business of farming. The land owners relied upon on overseer who listened to the account of the stewardship given by the tenants.
In
those days, the receipt and payment of an establishment were read to the
hearing of an individual termed as the AUDITOR. The word ‘’Auditor’’ was
derived from the Latin verb ‘’AUDIRE’’ which means ‘’to hear’’ therefore, the
individual to whom the receipts and payment of an organization were read to was
called the auditor. In the early days of auditing, the prime qualification for
the position of auditor was reputation.
A man known for his integrity and independence of mind would be sought
for his honored position, the matter of technical ability being entirely
secondary, and consequently, his function, in those days, was never confused
with that of accountant.
However, as accounting gradually becomes more complex and concerned with technicalities, auditors found themselves out of their depth and in turn, become increasingly dependent upon the expertise prouded by the accountant until eventually , the Audit function itself become totally dominated by the accountancy professional. It is for this reason that the description auditing profession and accountancy profession are today used synonymously until the advent of limited liabilities companies where ownership is deferent from the management.
Kola
Olowookere ‘’fundamentals of auditing “recent edition’’ (2007).
1.2 STATEMENT
OF THE PROBLEM
Auditing which are the independent critical examination of and the expression of opinion on, the financial statement and underlying records of an enterprise by an appointed auditor in pursuance of the audit objectives and in compliance with his appointment.
A good internal audit function in
an organization is a sign of existence of good internal control system. And
auditing has to be carried out in away to avoid both management and
shareholders conflict. Through the secondary objectives of auditing are to
prevent errors and fraud, it is the responsibilities of the management to
safeguard the company’s asset.
However,
attempts have been made in this project to examine critically the followings:
- How the goal of asset safeguarding
will be achieved.
- Means
of achieving adequate internal control.
- To know
what the impact of the internal audit function will be to the success of the
organization.
- How the
audit strategy will be determined.
- How the
records of accounts, and internal control system are documented.
- How the
control will be evaluated to know if it can be relied upon to prevent or detect
irregularities that may arise.
- The
relevance of audit committee in achieving effectiveness.
1.3 OBJECTIVES
OF THE STUDY
The objectives of this work are as follows:-
- To know the procedure to be followed by the system of internal control in discharging its responsibilities in relation to fraud and errors.
- To know the conditions that increases the possibility of the existence of irregularities within the enterprises.
- To determined the conditions of arrangement in operation and defection fraud.
- To ensure the importation of quality control policies and procedure design to ensure that all audits are conducted in accordance with relevant national standard.
- To determine the means of achieving internal control
1.4 SIGNIFICANCE OF THE STUDY
The significance of this project
work amongst others hall be as follow:
- To know how the internal audit
committee of the organization beep the internal control system of the
organization to entrance efficiency and reliance on the audit work
- To help
the organization adapt ways of keeping asset physically secured, by the verification.
- To
ensure that the controls are designed to ensure that transactions are currently
calculated, recorded and proceed.
- To
ensure segregation of duties within the organization that is, no single
individual should be responsible for all aspect of the transaction from the
beginning to the end.
- To help
the organization ensure that documentation
takes the form of:
- Internal
control questionnaire.
- Written narratives.
- Flow
charts.
- To
ensure information are obtained about the internal control bys
- Inquiry
of appropriate client personnel.
- Inspecting the organizations documents and
records.
- Observing
and control activities and operations as they are performed.
Auditors and company owners also
failed to see auditing as a vital tool for ensuring efficiency and accountability
in an organization
It is commonly, and mistakenly through that the
purpose of an auditor is to detect errors and fraud.
This might be the case when
investigation of a set accounts and supporting documents are conducted, but
this is not the main purpose of an audit. The main purpose of an audit is to
give an opinion of the truthfulness and fairness of the financial statement.
The main of this study is to the
know the method of auditing and prevention of fraud in coca-cola bottling
company Plc in line with public accounting system procedure.
1.5 SCOPE
OF THE STUDY
This project work covers auditing
and prevention of fraud in the case of (the coca-cola bottling plc). The
researchers have tried as much as possible to clearly define and explain what
auditing and fraud means and their relevance in auditing and fraud control or
prevention in coca-cola bottling company plc.
Due
to the nature of the topic, the researcher has limited their finding and study
to the auditing department of the place chosen as a case study from the year
1995/1996.
1.6 LIMITATION
OF THE STUDY
The most obvious limitation to this study is the
size of sample.
More samples could be used to
yield more significant result but because of time and financial constrains,
this was impossible.
Similarly, reluctance in giving information is another limitation.
Despite the fact that the
researchers introduce themselves as students of kwara state polytechnic, most
of the respondents were still very skeptical about the motives behind the
study.
1.7 PLANS OF THE STUDY
The research work takes the following format.
Chapter one contains introduction to the
topic of the project work, which includes the problem of the study, objectives
of the study, significance of the study, limitation of the study, scope of the
study, definition of the terms, and research questionnaire.
Chapter two embodies literature
review, various scholars review on auditing and fraud, nature and
classification of fraud and auditing in an organization as a means of control,
qualification and qualities of an auditor and auditor independence.
Chapter three contains the historical background
of coca-cola bottling company plc research design, method of the data
collection, population and administration of the questionnaire, the sampling
techniques and method of data analysis.
Chapter four includes the data
analysis of the chosen case study it will examine critically the department of
auditing and fraud control in coca-cola bottling company plc, the internal and
external auditor.
Chapter five concludes the
project by devising possible solution to potential problems that is summary,
recommendations and conclusion which might help adequate auditing to be carried
out.
The external auditor and internal
auditor are considered as having common objectives such as:-
- Effective internal auditor control
system and accounting system.
- Continuous
effective operation of such system.
- Reliable
and adequate management information.
- Verify
asset liabilities and carry out observation.
However, the extent to which the
eternal auditors can rely on the internal auditor depends on the external
auditor’s general assessment of the effectiveness and relevance of the internal
audit function in term of:-
- Degree of independence of the internal
auditor in doing his work.
- The
number of qualified skilled and experience staff employed in the internal audit
units.
- The
evidence of internal auditors work and review of its quality by the external
auditor.
- The
scope, extent and timing of the tests made by the internal auditor.
- The
quality of internal audit reports and the extent to which management takes
action based upon the report.
Gene Brown, hard book for auditor
edit
1.8 DEFINITION
OF TERMS
The followings are terms that one
could come across during the reading of this project work.
AUDITING: It is the
independent examination of, and expression of an enterprise by an appointed
auditor in pursuance of that appointment and compliance with any relevant
statuary obligation.
FRAUD:
Deception either stating what is false or by suppressing what is true, in order
to induce a person to give up something of value.
INTERNAL AUDIT: The function
came within an organization in examining, evaluation and reporting on
accounting and other controls in the operation of the organization.
INTERNAL CONTROL SYSTEM:-
The whole system of controls, financial and otherwise, established by the
management in order to carry on the business of the company in an orderly and
efficient manner, ensure adherence to management policies, safeguard the asset
and secure as far as possible the completeness and accuracy of the records.
EXTERNAL AUDITING: This is an audit carried out by an auditor, who is not employed by that entity or by its manager and, as far as for possible, independent of the person who manage the entity.
EFFECT OF AUDITING AND PREVENTION OF FRAUD IN AN ORGANIZATION (A CASE STUDY OF COCA-COLA BOTTLING COMPANY, ILORIN.)
