The function and the Existence of Internal audit department in an organization cannot be over emphasized considering the enormity of trust and responsibility attached to this department of an organization. This brings to mind why the researcher chose to research on the subject, Internal auditing as an Instrument for Effective management. This research work examined the Extent to which the inability to identify the function of the internal audit department affects the institute of management and technology (IMT) Enugu. Find out how lack of information in this institute affects the internal audit work. Determine the Extent to which the independent of the internal audit work is being hampered and also determined whether internal audit is an instrument for effective management. These are the areas that the researcher concentrated while carrying out this research work. The first Chapter is the introductory part of the research work. This chapter also contains the background of the study, statement of the problems, research question e.t.c. Data for the study was sourced from two main sources which include Primary and Secondary sources of data Collection. Primary data: questionnaires and oral interviews were used to collect information from the respondents. Secondary data: journals, and other relevant materials relating to the area of my investigation will be review. Extensive literature review was carried out on the direct literature and indirect literature on books, journals and past works. The research instrument used in this study includes oral interview and questionnaire. The questionnaire is structural as to contain both close and open ended question. Simple tables and percentages was used in treatment of data. Based on the findings, conclusions were drawn and recommendations were also made in the last chapter of this work which is the fifth chapter.
TABLE OF CONTENT
Table of contents
CHAPTER ONE: INTRODUCTION
1.1 Background of the study
1.2 Statement of problem
1.3 Objectives of the study
1.4 Research questions
1.5 Significance of the study
1.6 Scope of the study
1.7 Limitation of the study
1.8 Definition of terms
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Definition of Auditing
2.2 Definition of internal auditing
2.3 Generally accepted auditing standards
2.4 Development of internal auditing
2.5 The purpose of internal auditing
2.6 The role of internal auditors
2.7 Stages in internal audit planning
2.8 Factors that may impair internal auditor’s independence
2.9 Problems of internal auditing
2.10 Internal auditing in government 2.11 Differences and similarities between internal auditors
2.12 Determination of the Extent of reliance to be placed on internal auditor’s work by the External Auditors
2.13 Areas of work overlap between internal Auditing and External Auditing
CHAPT THREEE: RESEARCH DESIGN AND METHOD
3.1 Research design
3.2 Population of study and sample size Determination
3.3 Sources of data collection
3.4 Research Instrument
3.5 Data Treatment techniques
3.6 Validity and Reliability of Research Instrument used
CHAPTER FOUR: PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
4.1 Presentation and Analysis of Data
4.2 Interpretation of Results
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
1.1 BACKGROUND OF THE STUDY
The function and the Existence of Internal audit department in an organization cannot be over emphasized considering the enormity of trust and responsibility attached to this department of an organization. This brings to mind why the writer chose to research on the subject, Internal auditing as an Instrument for Effective management.
Internal auditing (IA) serves as an Important link in the business and financial reporting processes of corporations and not for profit provides (Reynolds 2000). Internal auditors play a key role in monitoring a company’s risk profile and identifying areas to improve risk management (Goodwin-steward and kent 2006). The aim of internal auditing is to improve organizational Efficiency and Effectiveness through constructive criticism. IA has four main components: (1) verification of written records (2) analysis of policy (3) Evaluation of logic and completeness of procedures, internal services and staffing to assure they are efficient and appropriate for the organization’s policies; and (4) reporting recommendations for Improvements to management (Eden and Moriah 1996).
Internal auditing becomes necessary as a result of the Extended span of control faced by the management concerning the employment of men and material in the conduct of organizational affairs. The work of the internal audit are very important In the most modern organization and have trust of responsibility to advice the management and enforce the operations of internal control, and the internal checks in the organization. the inefficiency in the organization during day to day activities are controlled.
Internal audit is an independent appraisal activity in the organization as a service to the management.
The duties are usually define by management and these includes:
Measurement of the adequacy and effectiveness of the internal control system on a continuous basis;
Routine checks to prevent and detect errors and frauds;
Provision of hireling advice to management on internal control matters;
Investigation of reported cases of all practices;
Provision of statistical data for management information and decision making;
Other special assignment such as disposal of asset, staff audits.
Inspite of this being a seemingly exacting and challenging function of the internal audit department. In some organization, the management starve the internal auditors of funds, staffing and training. It is necessary for internal audit to have credibility by having an internal auditors persons of integrity.
The above qualities of internal auditors contributed to the inefficient of the internal audits of the organization world-wide.
As regards, the problems which usually affects the internal audit departments, the staff of some organization treats the internal audit as “blood hound” and not “watch dogs”. The fraudulent staff would will not normally corporate with the internal auditors as regard to the supply of information which should be used for the effective checks of the works in the organizational activities.
This project directs its attention on the institute of management and technology (IMT) Enugu. This school was established as a result of the combination of the former college of technology and institute of administration of east central state in 1972.
The institute of management and technology (IMT) Enugu came into being on the 1st July, 1973 as a result of Edict No .10 of the then East central state Government.
The institute of management and technology has three campuses which is campus 1, 2, & campus 3.
IMT Enugu runs preliminary studies, such as full-time, part-time, and poly-air programmes. The institute has its head of Establishment, the rector of the institute, the registrar the accountants and the student’s affairs e.t.c.
The institute of management and technology (IMT) Enugu has under its various programmes:
School of business and administration;
School of Engineering;
School of technical Teachers Education;
School of continuing Education;
School of Financial Studies and
School of General studies.
1.2 STATEMENT OF PROBLMS
This research titled Internal auditing as an instrument for effective management attempts to determine the methods by which some institutions like the institute of management and technology (IMT) Enugu has utilized internal audit as an instrument for effective management some of this problems are:
1. Inability to identify the functions of the internal audit department;
2. Lack of information for internal audit work;
3. Non-independent of internal work in the institute,
4. And inability to recognize the internal audit as an effective and reliable tools to management in the performance of its functions.
1.3 OBJECTIVES OF THE STUDY
The objective of this work is as follows:
1. To discover the Extent to which the inability to identify the function of the internal audit department affects the institute of management and technology (IMT) Enugu.
2. To find out how lack of information in this institute affects the internal audit work.
3. To determine the extent to which the independent of the internal audit work is being hampered;
4. And to determine whether internal audit is an instrument for effective management
1.4 RESEARCH QUESTIONS
To guide this project, (4) four research question were formulated as follows:
1. To what Extent does the inability to identify the function of internal audit department affects the activities of the institute of management and technology (IMT), Enugu.
2. To what Extent does lack of information in the institute of management and technology (IMT), Enugu affects the internal audit works;
3. To what Extent does independence of internal audit work is being hampered ,
4. And to what extent does internal auditing serves as an instrument for effective management in the institute of management and technology IMT, Enugu
1.5 SIGNIFICANCE OF THE STUDY
It is hope that this study will enable the management of the institute of management and technology (IMT),Enugu and other similar institutions that requires an effective internal control such as Research institute, business organizations and the General Investigating public be guided adequately in the pursuit of the realization of their own objectives. It will enable them manage the increasing fraud cases and sophistication of crimes, Irregularities and their implications
Finally, it will be of immense benefit to the practicing accountants in their audit works, the would -- be – accountants, legal practitioners who need them as a Good reference guide for their legal duties.
1.6 SCOPE OF THE STUDY
The scope of this study focuses on the internal auditing as an instrument for effective management using the institute of management and technology (IMT),Enugu as a case study. The reason is to enable the Researcher have a enough time o carry out an Indept study of the subject matter with regards to its operations in the institution. It is important to state that in spite of the sensitive Nature of the issue, the quality of work was neither delineated nor lacked substance and as such should be reliable in Establishing comparative standards of performance.
1.7 LIMITATION TO THE STUDY
The major limitation to this study is Essentially Time. The fact that one does his job or she is Expected to perform her full-time official duty as a worker from Monday through Friday’s and still carries on with this project work is energy –whelming.
In addition, the time presently allotted to the study of research documentation/project writing is quite insufficient. On a suggestion that student should be groomed and grounded in the areas of research of work right from their 2nd year of the three years programmes. this will enable them to operate matters rather than the new famous crash.
1.8 DEFINITION OF TERMS
AN AUDIT: Nwabueze C.C (1997) Defined an audit as an independent Examination by a statutory appointed person called the auditor to investigate, an organization, it’s records and the financial statements prepared from them, and thus. Form an opinion on the accuracy and correctness of the financial statement.
AUDITING: J.C Eze Defines auditing as an activity carried on by the auditor when he verifies or Examines accounting information, Determine the accuracy and reliability of accounting statement and reports, and then Express his opinion.
INTERNAL AUDIT: An independent appraisal function Established by the management for the review of the internal control system as a service to the organization. (J.C EZE)
The institute of chartered accountants of England and Wales (ICAE&W) also defines internal auditing as:- “ A Review of operation and records, sometimes continuous undertaking within a business by specially assigned staff ”
INTERNAL CONTROL SYSTEM: Auditing standard and guide line (ASG) define the system as ’’ the whole system of controls, financial & otherwise established by the management in order to:
1. Carry on the business of the enterprise in an orderly and efficient manner ;
2. Ensure adherence to management polices ;
3. Secure as far as possible the completeness and accuracy of the records.
MANAGEMENT AUDIT: According to mayo associates limited (1988) management audit is an independent Examination of the quality and polices of the management of an organization as well as the level of their execution against the background of relevant environmental factors and condition. It could cover any aspect of an organization activities such as : corporate planning, marketing, finance and accounting, production research and development, or other aspect of its corporate affairs . the objective is to produce a report which will form a basis for the review and amendment of the organization policies and procedures.
AUDITING STANDARD: Auditing practice committee (APC) defined Auditing standard as those principles which the members of the profession should use as guide line whenever they are discharging an auditing responsibility.