CHAPTER ONE
INTRODUCTION
1.1 BACK GROUND OF THE STUDY
For any business organization to continue Perfectually in business, there is the need for that business to be internally efficient. The business should have a watertight internal control structure in relation to a financial accounting system that will facilitate the day- to-day transaction recording in the organization recording in the organization without difficulty. Fundamentally and stipulated in section 59 of companies and allied matter Decree (CAMD) of 1990 (1) is also the vital need for an independent body which has to monitor and check the organizations’ financial statement. This study focuses on the role of this independent body, who is the auditor in combating fraud in a business organization.
An auditor his one who has acquired a professional certificate – passed is ICAN examination (Nigeria) and has demonstrated sufficient acceptable knowledge of accounting and auditing to carry out his responsibility of combating fraud, section 362 CAMA 1990 has to confirm certain power and duties on the auditors. i. That every auditor of a company shall have a right of assess at all time to the company’s books, account and vouchers. ii. He is entitled to require form government such as information and explanation as he thinks necessary for the performance of his duties. iii. The stages in audit processes are designed to ensure that the auditor fully discharge his legal and professional obligation.
1.2 STATEMENT OF PROBLEM
So many managers have failed to recognize the effort of auditor in auditing financial performance. And as a result, it has led them to poor planning, control and decision making. IMPLICATION It retards the growth of the parastatals § It leads to loss in shareholders fund § The reputation of the company will be at stake The loss of public confidence in the company and shiing of interest to other company. It is a well known fact that officers of the parastatals are entrusted with the management of both material and human resources of their establishment and in most cases, these officers are not brought under thorough control or question, the ultimate consequence of this is that much of the resources are indiscriminately mismanaged. Equally, some accountant and key personnel in most parastatals and companies do not resist the temptation of colliding with other workers to embezzle their organizations funds to the determent of the masses and owners of the business or even the shareholders. Also some parastatals do not seam to have an audit department or engage the service of the external auditor or where such a unit exist, they allow it to exist only in name as a mere compliance to the statutory requirement. An audit department of such standard will not make or have any impact as regards to internal control. This state of affairs from investigation is usually deliberate attempt by management to execute its exploitation, plans within any hindrances. Another aspect of this, is lack of adequate regulatory standards in Nigeria regarding the duties, rights, responsibility and qualification of auditors.
