Internal control system: - could be define as the whole system of control financial and otherwise established by the management of an organization in order to carry out the business of the enterprises in an orderly and efficient manner, the main objective is to ensure adherence to management police, safeguard it asset and to sure that record of the organization is complete and secured.
An auditor is define as a competent and impartial critic appointed to verify the financial and other accounting statement of organization he must certify the verily of the organization concerned.
However, he is not concerned with the financial strength of the organization but his task to see that financial strength, as show in the balance sheet, is in fact the actual and the true value of the organization.
Moreover auditing form a most important branch of the accountancy profession once have been prepared, then may be checked in other to ensure that then don’t print a destructed picture such process of checking is called auditing. It is compulsory for all limited liability company to have their account audited. Therefore auditing can be define as a independent examination of the expression of opinion financial statement of an enterprises by appointed auditor in purchase of that appointed and in compliance with any relevant stationary obligation.
LESHER HERWARD in his book auditing is state that an audit may be described as examination by an auditor and balance sheet of an organization have a true and fair vie of the summarized transaction for the period under review and of financial state of the organization at the end of date, this enabling the auditor to report there. However, auditing is significant tools needed in internal control system.
The internal control system is a very important part of any organization. It helps to prevent fraud and any other irregularity within the manufacturing company. The major problem in question therefore,
i. Is to evaluate the effectiveness of internal control system in a manufacturing company and the efficiency of such to make sure that internal checks are conducted properly and adhered to by internal audit staff and management.
ii. The internal control system in an organization stress as it strength and weakness.
iii. Testing the efficiency of the internal control system gingered the researcher to make a study and establish. If any, the fact that the existence of an efficient internal audit department (IAD) and system can alert inefficiency in a manufacturing company.
1.2 OBJECTIVES AND PURPOSE OF THE STUDY
The several objectives of this project are to show the efficiency of internal control system to a business organization with a special focus on NBC Ilorin plant.
i. To determine the completeness, accuracy and validity of the records.
ii. To see how the company safeguards it’ assets by enforcing strict adherence to the management policies.
iii. To know the levels of the company operating efficiency
iv. To determine the effectiveness of the information passed from the strategic management to the level of management
1.3 SIGNIFICANCE OF THE STUDY
This research work is important because it examines the internal control system of the organization and evaluates it with the overall performance of the company. Bu the end of this, one should be able to identify its areas of strength and weakness as the regards the management of the company and hence it’s internal control system with a view of enhancing the recommends performance of the company.
1.4 SCOPE AND LIMITATION OF THE STUDY
This research work covers some strategic areas, such as effectiveness of internal control system of the manufacturing company with particular attention on staffing, knowledge skill, discipline and supervision. It also covers the roles of an auditor with respect to effectiveness of internal control system. Data collection is however limited to the accounting and internal audit department of Nigerians Bottling company Ilorin alone, this is due to financial material and time constraints.
1.5 ORGANIZATION PLAN OF THE STUDY
The research report is divided into five chapters. Chapter one contains introduction parts of the study, briefly history of the case study, given significance scope and limitation, organization plan of the study as well as the definition of terms and concepts.
Chapter two also contains the literature review on the research topic where as chapter three centre on research design as well as sources of information and internal audit department. Chapter four contains the management of business organization, data generated and discussion of the result. Finally, summary, conclusion, and recommendation made at the end of the project work could be read in chapter five.
1.6 DEFINITION OF TERMS AND CONCEPTS.
The definition of term and concepts of the study include the auditor, accounting, account system and the internal auditor
(A). AUDITOR: - an auditor is a competent and impartial critic appointed to verify a financial statement and to certify that the statement exhibit a true and fair view of the statement of affairs of the organization concerned. An auditor is usually an accountant under another title, if they are appointed outside the organization they are regarded as external auditor. In the case of a limited liability company, they are appointed by shareholder for the interest protection. However, they contrast the internal auditor which is appointed by the management of the company to ensure an effective and efficient maintenance of the company. Internal control system in term of production and administration of this company.
(b). ACCOUNTING: - is the act of recording classifying, summarizing and communicating the result there off.
Accounting to American accounting association (AAA) 1966, accounting is the process of identifying, measuring and communicating the economic information to permit the financial judgment and decision by the user of the information (the company internal control system information).
(c). ACCOUNTING SYSTEM :- this is a set of element goals, policies, accounting principles equipment, personnel, input and output and control that can jointly perform accounting function. Accounting system deliver precise information prepared in a know way about revenues expenses, asset, liabilities and profits
(d). the accounting system include manual mechanize and computerized system of installation and an accountant will choose the method which will suite the organization by considering the nature the types and the environment which it belongs.
(e). INTERNAL AUDITOR:- these are independent appraisal of activities within the organization for the review of operation as a service to management is an element of the management of an enterprises to examine, evaluate and report on accounting and other voluntary or in certain operation. Its existence could be due to statutory requirements.