INTERNAL AUDIT AS A CONTROL TOOL FOR EFFICIENT MANAGEMENT IN NIGERIAN PUBLIC ENTERPRISES
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The’ term management was coined from the Italian word “managgiare” which connotes ‘to train horses’. It was originally used to indicate the process of training or coordinating sporting activities. Later its application was extended to the operations of government and businesses. Akpala (2001) describes management as the process of combining and utilizing organization’s inputs (men, materials, money and’ machine) by the mix of planning, organizing, directing and controlling activities for the purpose of producing outputs (usually goods and services), desired by the customers, so that the organization’s objectives are accomplished. In the definition given above, it is worthy of inference that control is an essential tool of management. The term control was rightly described by Lucey (1990) as “a systematic effort by business management to compare performance with predetermined standards, plans or objectives to ensure that performance is in line with standard and also to take remedial action required so that human and other corporate resources are employed in the most efficient and profitable manner. Control system is very essential in any organization be it a private or a public establishment/sector in order to check how effective and efficient they are in maximizing the use of resources. One of the measures commonly used to minimize wastage and guide plans to their eventual accomplishment is Internal Auditing.
Embezzlement, misappropriations, fraud and wastage of resources have been the characteristics of government ministries and public enterprises. Based on the literatures and daily experiences, one could conclude that there is a fairly unanimous feeling of dissatisfaction with the performance of most Nigerian public enterprises to date. Internal auditing has been defined by Adelaja (2000) as “an independent appraisal of activity within an organization for the review of operations as a service to management. It is a form of a managerial control which functions by measuring and evaluating the effectiveness of other controls”. This project seeks to find out if the internal audit department exists in these enterprises and if it does, in what way has it contributed to the efficient management of such enterprise.
