This study investigates auditing efficiency for improving companies’ performance. In carrying out this research work, textbooks were consulted for related literature as well as questionnaires and oral interview with staffs of Champion Breweries, Uyo LGA. All essential departments relevant to the study were properly enlightened and the examinations of an auditor in areas of ramification were thoroughly dealt with. The study revealed that in improving a firm’s performance, the employment of an auditor whether internal or external will contribute immensely towards the effective management of such firm. It also revealed that auditing the financial statements of companies’ increases investment and it helped in knowing the importance and role of an auditor in the detection and prevention of fraud in a business firm to enable the organization make efforts in maintaining a positive and at the same time pursue its growth and objectives. Finally, there must be adequate provisions for the reliance of auditor on the control of an organization and any advice given by the auditor must be seen as a professional opinion and it should be taken seriously.
Company performance is very important if such a company want to achieve its purpose of starting its business without positive impact of any organization, it means that the way of achieving the objectives when the business has commenced will be a difficult situation for that organization. It is obvious that the performances of companies sis not unto expectation. That is why the researcher wants to know the impact auditing create in improving companies’ performances.
Since companies have been encountering some problems like fraud, misappropriation of funds and properties, lack of effective management and others that made people to be asking whether auditing plays any significant role towards ensuring efficiency and judicious use of funds set aside for various purposes.
Some activities and programmes organized by people as re- assumed to be done on behalf of the people. They are deserved to be assured that eh resources which they put at the disposal of these programmes are effectively, efficiently and economically managed since it is known that not all are judicious in public affairs entrusted to them.
Therefore, for proper and efficient accountability, it is obvious that auditors will manifest their principles to be able to arrive at what is expected of them in order to be convinced that the financial position of the organization as presented show a clear and fair view of the organization.
Consequently, because of biased nature of the organization as a result of poor investigation of the organization position, past rulers have pledged to introduce a more responsible system of government with accountability but their subsequent conduct has shown that they have little or no understanding definition and application of efficiency in the improvement of companies’ performances.
During the middle Ages, however, the interest to control financial documents and accounts and to verify the use or misuse of funds increased in Western Europe. The main objective was to discover those who eluded payment, appropriated funds, or misused money and property, and to defer them to justice. The three institutions that introduced as early as the 13th-14th centuries the idea of verifying accounts and hold the wrongdoers accountable were the state (represented by the reigning monarch), the Catholic Church, and the universities (especially those from Northern Italy), and employed functionaries or monks to keep the accounting of their respective structure (LeGoff, 1990).
From the mid-19th century, the professional category of accountants and auditors emerged as a specialized group of people involved in preventing and detecting real or possible frauds and errors in the financial situations within the state or an economic entity. Their role was not only to investigate, but also to assess possible risks and to guarantee the responsibility of internal control mechanisms. At the end of the 20th century and the beginning of the 21st century, auditors have become a necessity for the good-functioning and efficiency of an economic entity’s management that can prevent and deter possible scenarios of trickery, funds embezzlement, or theft.
Auditing which is regarded as one of the recently established professions turn out of the complexity of modern business world. It becomes relevant so as to discourage people from erring and to expose those that gave wrong account of how they managed the funds and properties under their custody. The account or report is usually done by means of financial statement. In order to verify the true and fair view of this report an independent person is needed to audit the account.
1.2 STATEMENT OF THE PROBLEM
All organization can be a risk of fraud. As we know, large fraud will lead to the collapse of the entire organizations, causing major losses to investors, an important legal cost affecting directly to key individuals, and loss of confidence in capital markets. Publicized fraudulent behavior by key executives has negatively impacted the reputation, brands, and images of many organizations in the worldwide.
The definition of ‘fraud prevention and fraud detection’ are related to each other, however it is not the same concepts preventing fraud include policy, procedure, training and communication to prevent fraud happening. While the detection focusing on the activity and technique in order to quickly recognize fraudulent whether fraud has happened or is happening.
Specifically problem of this study are if the role of auditors is well understood in business. The rate of auditors in fraud detection, if there is a legislature to this effects. Who are the offenders of business fraud in an organization? Finally, the misinterpretation of the primary role of audit true and fairness to be the detection of fraud.
1.3 OBJECTIVES OF THE STUDY
From the above, the research work has undertaken to study the auditing efficiency as a tool for improving company performance using Champions Breweries, Uyo LGA as the case study. It is intend to find out some of the reasons for deficiencies and inefficiency in the company which is usually believed as not existing. It is also intended to find out the extent to which management has appraised their own operations and how competent they have been in determining operational weakness and ills.
1.4 STATEMENT OF HYPOTHESES
H0: There is no significant relationship between the role of the auditor and fraud detection in selected firms in Champions Breweries Uyo LGA.H1: There is significant relationship between the role of the auditor and fraud detection in selected firms in Champions Breweries Uyo LGA.
H0: There is no significant relationship between fraud detection and audit of the financial statement in Champions Breweries Uyo LGA.
H2: There is significant relationship between fraud detection and audit of the financial statement in Champions Breweries Uyo LGA.
1.5 SIGNIFICANCE OF THE STUDY
It is believed that at the completion of the study, the findings will be useful to the management of Champions Breweries Uyo LGA as the study seek to emphasis on auditing efficiency for improving companies’ performance. The study will also be of great importance to the audit profession as the study seek to elaborate on the importance and role of forensic audit in crime prevention and detection. The study will also be of great importance to student who intend to embark on a study in similar topic as the findings of the study will serve as a pathfinder to them. Finally the study will be of great importance to students, teachers and the general public as the finding will add to the pool of existing literature. Generally, the result of this research would help prospective investors, students, researchers, bankers, managers, governments, directors, employees and other financial institutions.
1.7 SCOPE AND LIMITATION OF THE STUDY
This study is on the role of auditors in the detection and prevention of fraud in Champions Breweries Uyo LGA, Akwa Ibom State. The researcher delineated the scope of the study to Champions Breweries Uyo LGA, Akwa Ibom State due to time and financial constraint. The researcher took a critical look and reveals the various activities of the auditors in order to ascertain the performance of the internal control of Champions Breweries Uyo LGA.
An insight as to the correctness and accuracy of the records kept by Champions Breweries Uyo LGA will be looked into and the auditor’s areas of concentration will be emphasized.
A lot of limitations was encountered in collecting information in carrying out this research study. The problems of the executive officers willing to give information or have a direct interview with the researcher. Financial constraint is inevitable considering the present economic situations. Due to lack of finance at the researcher’s disposal it was not possible to capture many small scale businesses. In developing countries like Nigeria, there is the problem of insufficient data. Furthermore, the organization secrecy as to relating their financial report to the researcher was also faced.
1.8 DEFINITION OF TERMS
Auditing: Auditing is seen as a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between these assertions and established criteria and communicating the results to interested users.
Efficiency: Efficiency is the (often measurable) ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result. In a more general sense, it is the ability to do things well, successfully, and without waste. In more mathematical or scientific terms, it is a measure of the extent to which input is well used for an intended task or function (output). It often specifically comprises the capability of a specific application of effort to produce a specific outcome with a minimum amount or quantity of waste, expense, or unnecessary effort.
Detection: This is the art of finding or discovering the existence or essence, nature or identification of something. Defalcation: This is simply misappropriation and embezzlement of money enrolled to one. Fraud: This is the act of dishonesty, deceit, falsification and manipulations perpetrated to gain undue monetary and non-monetary benefits. Investigation: This is an enquiring commission for come specific purposes stated in his letter of engagement to an investigator. Management: This constitutes serious members of an organisation who dictate and enforce policies and philosophies of the operations. Company: Any seven or more persons in the case of private company or any two or more persons associated for any lawful purpose or incorporation for a joint action especially for business. Efficiency: Ability to perform duties well and producing a desired result.
1.9 ORGANIZATION OF THE STUDY
This research work is organized in five chapters, for easy understanding, as follows. Chapter one is concern with the introduction, which consist of the (background of the study), statement of the problem, objectives of the study, research questions, research hypotheses, significance of the study, scope of the study etc. Chapter two being the review of the related literature presents the theoretical framework, conceptual framework and other areas concerning the subject matter. Chapter three is a research methodology covers deals on the research design and methods adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding. Chapter five gives summary, conclusion, and recommendations made of the study.