CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND
OF THE STUDY
This
research is a study of the challenges facing the internal auditors in
Government parastatals. It attempts to highlight the role and functions of
internal Auditor are regarded as a watchdog to the management and this whole organization.
To what extent and performs the duty of a watchdog is the subject of this
study.
In
order to get a clear picture of the role of internal Auditor is an organization
Vis-a-vis the challenges facing his research effort is directed at drawing the
distinction between internal Auditor and external Auditor in terms of
responsibility. Scope of work and their approach to work, it is therefore, hope
that this study will give an insight into the role of internal Auditor in
Government parastatals in general and NPA in particular and also serve as
reference for those who intend to conduct research in similar fields in future.
The
history of the Nigerian port Authority dates back to time of slave trade or the
colonial masters when the port/territorial waters in 1862, a department known
as Marine department they had regional headquarters established and located at
the following places.
Lagos
colony marine -1862-Lagos southern Nigeria marine -1993 –calabar but later
transferred to Akasa in 1902 Northern Nigeria Marine -1900 – Lokoja I 1960 two of the regional headquarters i.e.
Lagos colony marine were merged to become southern Nigerian Marine.
In
1908, a separate Government department known as port Department was formed to
take charge of civil engineering works in Lagos and Port Harcourt ports. This
was followed with the creation of the Nigerian marine in 1914 with the two
regional Head Quarters as founding members.
1.2 STATEMENT OF THE PROBLEM
This
major concern of internal Audit is to identify the challenges faced by this
corporation, the internal Audit department is charged with the responsibility
of monitoring the operating efficiency and compliance with the authority
policies and also to enhance management confidence in the reporting performance
of the operating unit of the cooperation.
What
is needed of the internal Audit department is to safeguard and protect
cooperation’s asset, and to have an
independent mind free from the subjective opinion of managers concerning
the performance of individual operating department and to ensure the effective
and efficient discharge of duties of the operating unit.
Moreso,
another challenging area is how to secure the completeness and accuracy of
records of the operating unit in adhering to management policies.
1.3
OBJECTIVES
OF THE STUDY
The
objectives of internal audit very widely are dependent upon the
responsibilities assigned to it by management. The size and structure of
enterprise the internal staff and the skills and experience of the internal
auditors, normally however, internal auditor operates in one or more of the
following broad areas.
1. Review
of accounting system and related in internal controls.
2. Examination
of financial and operating information for management including detailed
testing of transaction and balances.
3. Review
of the economy, efficiency and effectiveness of operations and functioning of
non-financial controls.
4. Special
investigations.
1.4 SIGNIFICANCE OF THE STUDY
The
study is intended to:
1. Serve
as quite for any other researcher who want to carry a work on this topic
2. Benefits
the managements of the organizational seeking orderly manner of discharging
duties effectively.
3. Create
new audit work that is possible to provide more enlighten on the internal audit
work.
1.5 SCOPE AND LIMITATION OF THE STUDY
The
research is limited to the chapter and id affected by the financial and
academic constraints. The period for submission and the forth coming final examination
could not allow for more periods for research and moreover, the suggested title
of the internal audit department. Its covers a wide spectrum of the work done
by one State of the department in Lagos head office RORO port, tin can –island,
and Papa ports.
This
researcher has carefully excluded the activities that do not come strictly
within the range of internal audit function. The scope of this research also
includes major revenue sources and expenditure with emphasis on the control
built into the system with a view to ascertaining the effectiveness of such
controls.
1.6 RESEARCH QUESTION
The
following questions were sought to be answered in the course of the study.
1. The
sex Male/Female?
2. Do
you have internal audit department in your company?
3. How
in your opinion is the role of internal audit in the internal control system in
an organization?
4. Do
you accept that internal audit is a major factor for the management in checking
the company policies with the duty discharge?
1.7 RESEARCH HYPOTHESIS
The following hypothesis is formulated
using Nigeria part authority as a case study. Ho represented null hypothesis
and Hi represent alterative hypothesis as show below:
Ho:Internal
audit has no significant responsibility (problems in the detection and
prevention of financial misappropriation in the public sector.)
Hi:Internal
audit has significant responsibility (problems in the detection and prevention
of financial misappropriation in the public sector.)
1.8 OPERATIONAL DEFINITIONS OF TERMS
Internal Control: this is the whole
system or control financial or otherwise, established by the management in
order to carry on the business of a company safeguard the assets and secure as
far as possible the completeness accuracy and reliability of tis records.
AUDITOR
TRIAL: this is the means by which individual
transactions can be traced sequentially through the system from source to
completion.
ERROR:
this unintentional mistake it can be of any of a multitude of kinds,
mathematical or clerical or in application of accounting principles.
EVALUATION:
this means considering carefully how good the system in use are selected to the
need of the business and as such suggesting improvements.
VERIFICATION: this is the means of obtaining evidence of the
existence and ownership or assets and the confirmation of the liability of the
business.I.A.D: internal Audit (underline).
REFERENCE
Adams, R.A; (2005) public sector accounting
and made simple (4th edition) Lagos corporate publishers ventures.
Association
of certified fraud examiners (1979) “report on the nation occupational fraud
and Abuse” (online) www.com.cfnet.
Con/sum many.html
GET COMPLETE PROJECT HERE
