THE ROLE OF INTERNAL AUDIT IN AN ORGANIZATION

THE ROLE OF INTERNAL AUDIT IN AN ORGANIZATION

CHAPTER ONE

INTRODUCTION

1.1        Background of the study

The method of examining the evidence of financial transactions could be traced back to the time when there was need to transact business beyond one’s immediate needs. But successful Management as the central directing and controlling elements in a business organization came as a result of individuals pooling their resources together to strengthen their co-ordinate and integration of specific activities in the organization to ensure effectiveness and efficiency of human cooperation in recent times, business organization are increasing due to scientific breakthrough and economic development. As a result, the need for decentralization, which means authority is systematically delegated or pushed down the line in an organization arises. This makes corporate management becomes so complex and the increasing volume of trade among business organization has made the art of management so complex and challenging. The only managers with mastered skills in modern scientific method of management can cope with the increasing demand required by their position. In addition to this complexity of corporate management, is the increasing wave to fraud and misappropriation of funds in the private and public sectors of the economy at large. In an attempt to cope with this situation and keep their business profitable, management have to look inwardly to increase control system, by which all the policies and activities are put to check to conform to the set objectives. This involves the subdivision of duties by means of which no one person is entirely responsible for one transaction but at some stage of its performance, each person work come to the notice of at least one other person. Internal audit also forms a integral part of this internal control system, which is a