ABSTRACT
The research work was conducted to assess the role of internal audit as a guard against theft and fraud in government establishment, using the Deputy Governor’s Office Uyo, Akwa Ibom State, as a case study. The approach adopted in carrying out the study was the descriptive research method. The questionnaire was used as a primary instrument for data collection. The chi-square statistical test was adopted in testing of the hypothesis the findings of the study revealed that internal audit pays a significant role in any establishment, whether public or private. An effective audit unit will not only, ensure a reliable intern a control system which checkmates the academic of fraud and theft, but also ensures the safe guards of assets and measures aimed at achieving the attainment of corporate goals and objectives. On the basis of these findings, it’s recommended that in view of the importance of internal audit in unit organizations, the staff of internal audit unit should be honest and respected within and outside the organization; and they should be highly competent as internal auditors with ability to carry out independent investigation, checks and verifications the report of internal auditors should be respected by management of the organization.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Management principles in any organization are derived from its ability to combine all factors of production for effective and efficient production and quality outputs. However, human resources management is a big task to management efforts and needs motivated strategy, control, adequate technical training and proficiency of duties to employees. Beside this, employee’s deviant character is an experience to management strategy. Fraud, theft and misappropriation of funds and assets of the organization is a stress to management efforts and principles. A step to prevent these behaviours and create sanity in an establishment has emerged the need for internal control unit. Several countries have embarked on this reform to safeguard private and public enterprises. Auditing has become the basic requirement for statutory declaration of companies worldwide. External auditor is an independent examination of the financial statements of an enterprise by an appointed auditor in compliance with any relevant law and regulation. Internal audit therefore is a part of external control in express terms. Consequently every establishment should institute internal audit unit as a part of its internal control organ. This unit is responsible for carrying out auditing of the establishment or organization. It is also ensure that all economic activities as affecting the organization are properly recorded, properly accounted for, properly authorized and all financial policies are carried out in order to protect the assets of the organization and ensure accountability. Adequate system of internal control promotes accuracy and reliability. In accounting data errors are quickly and automatically brought to light by build-in proofs and cross inherent in the system. According to statement of auditing standard (SAS 52) that the auditor should assess the risk, error and irregularities that may cause financial statement to certain material misstatement. Based on that assessment, the audit designs to provide reasonable assurance of detecting errors and irregularities that are material to financial statement. Yet, despite widespread auditing efforts empirical evidence indicates that itsanticipated benefits are yet to be felt in many African countries. Many studies have also documented the relatively poor performance, management of funds and fraud in Nigeria public enterprises compared with other countries of the world in both relative and absolute terms (World Bank, 1996). Kikeri et al, (1992) however, only limited efforts have been made to identify the causes, and determinants of the uniquely unsatisfactory performance of state owned enterprises, thus resulting to policy of privatization and commercialization. In addition, internal control is to safeguard the assets of an enterprise against fraud and inefficiency. Internal control auditing intends to make sure that there exist a division of labour and to make sure that the handling of transaction or economic activity is not made to one person from the beginning to the end. It intends to ensure that there is a complete separation of duties and responsibility to ensure that the transaction is properly recorded and should be recorded at the time transaction takes place at the right book by the right person and to make sure that the persons in-charge of the recording of the transaction in the source documents are different from those who record those data in the book of original entry.
1.2 Statement of the Problem
Every enterprise grows up within the framework of both human and material resources. These resources are the building block of every successful enterprise in any organization toward the achievement of goals. The principle and system of good and effective management lies on the ability of the management to combine the resources for effective performance, productivity, efficiency and business growth in line with the set goals and objective of the organization. However, several studies have been carried out by scholars who point out the fact that the: i. Problem or failure for the mismanagement and misappropriation of funds, theft and fraud in any establishment is affected by the roles played by the internal audit control unit. ii. Many scholars therefore seem to think that fraud and theft by workers in any establishment is due to internal audit control system.
1.3 Objectives of the Study
The general objective of this study is to determine the roles of internal audit as a guard against theft and fraud in public establishment. More specifically the study seeks: i. To examine the factors that necessitates poor and in effective internal auditing control unit and its effects on theft and fraud in government establishment.
ii. To make useful recommendations such that will bring increase and ideal audit framework and control in any government establishment in Akwa Ibom State.
iii. To encourage management to examine their internal audit unit with a view of making this control unit more effective and efficient.
iv. To identify basic bottlenecks militating against the free management to the auditors and vice versa.
v. To examine the modern auditing techniques that can help any public establishment and enterprise in the attainment of the set goals.
1.4 Research Questions
The study will seek answers to these questions: i. How does the management of Deputy Governor’s Office maintain are liable internal control system through a specialized internal audit unit? ii. Do internal auditors detect and prevent fraud, financial,misappropriation, losses and waste in public enterprise? iii. To what extent does internal audit help the management of the Deputy Governor’s Office to improve operational performance such as fund, management and asset monitoring? iv. Does internal audit unit contribute to the achievement of set goals of the organization? v. To what extent does an internal auditor help in the management and achievement of corporate objectives?
