Internal Audit And Control As A Tool For Efficient Management Of Organizational Resources
(A Case Study Of Ikot Ekpene Local Government)
Chapter One
1 Background of The Study
Every organization’s resources comprises of material and personnel constitute manpower, material on the other hand constitutes assets, finance and valuable. Therefore, for an organization to accomplish its objectives, stringent measures on efficient management of its resources must be set rolling. Although there are many factors which can assists an organization in achieving its dreams as one may think of but here the researcher is bent toward the consideration of instituting internal audit and interval control as a tool for efficient management of resources.
But one may quickly ask, what is internal audit and control? It is a business oriented organization that requires probity and accountability to have merit by authenticating management intentions and actions. Where there is no consistent application of internal audit system to point out deviation and warm management of impending anger and administrative mechanism.
Nevertheless, although interval audit is considered to be an integral part of internal control, the later is generally considered to mean the whole system of control, financial and otherwise established by the management in order to carry on the business of an organization in an orderly and efficient manner. To safeguard its assets and ensure adherence to management policies and secure as far as possible the accuracy and reliability of its records.
To this end, it interests the researcher to conduct a study with an aim to find out the degree of effectiveness of both internal audit control as a tool for efficient management of organization’s resources.
Statement of the Problem
The statement of the research problem is; can management of organization’s resources encounter inefficiency despite the institution and application of internal audit and control system?
Objectives of the Study
The objective of this study includes the following:-
To find out the role of internal audit and control in an organization.
To identify the problems associated with the institution and establishment of internal audit and control.
To proffer possible solutions to identified problems
To make recommendations to various business organizations and readers of this study bases on the research findings.
Significance of the Study
This study is expected to be of significance in a number of ways to include:-
1. The importance of internal audit control has not been fully appreciated in most firms. Therefore it is hoped that the result of this study will serve as a practical tools to guide managers in their assessment of the usefulness of internal audit and control.
2. This study will broaden the researcher’s horizon in the theories of internal audit and internal control.
3. It will be a source of research material/references to other researchers in the same field in the near future.
4. Business organizations and other bodies wishing to understand internal audit and control as a tool for efficient management of its resources will find this work very useful.
Research Hypothesis
In order to guide the conduct of this study, the following intelligent guesses are made.
Ho: Internal audit and control does not have any significant effect on the efficient management of an organizations resource.
Hi: Internal audit and control has significant effect on the efficient management of an organizations resource.
Delimitation of the Study
This research study shall be limited to internal audit and internal control as they work towards efficient management of organization’s resources. It shall not delve into its establishment and institution procedure.
The research is not ignorant of the fact that certain other factors like good welfare scheme, condition of service and payment packages as well as security devices can work as a tool for efficient management of organization’s resource; yet, this study shall not cover such facts and others but shall restrict its scope to the topical subject under review.
Assumption of the Study
The researcher assumed that the staff of the guest houses and recreational Ikot Ekpene Local Government Area would give attention and complete the questionnaire submitted to them and give positive response.
It further assumed that about 80 percent questionnaire distributed would be completed and returned same to the researcher.
The researcher also assumed that God in his infinite love and mercies would strengthen the researcher to start and complete the research work successfully.
Scope and Limitation of the Study
This research study has not been so smooth from the beginning to the end. The researcher encountered some obstacles in the course of conducting this research work such limitation confronted includes:-
TIME: The limited allocated for this research work to be completed in accordance with academic calendar was rather short for a topic of this nature. For this reason, the researcher cannot claim to have given this study all the needed time.
FINANCE: The cash squeeze in the system as a student has made it very difficult to meet the financial requirement needed to conduct a thorough research for economic and business development.
AVAILABILITY OF INFORMATION: Due to the scarcity of published text in the area, the researcher was forced to rely heavily on the few available materials.
SECRECY AND IGNORANCE: Another limitation borders on secrecy and ignorance, some of the respondent and business executives never consider the researcher worthwhile as they expected witch craft. Effort made to explain to them did not do much to assuage them. Some were afraid that the researcher was embarking on a mission of espionage and therefore tried to prevent the study by canceling information.
Despite these hindrances at the early stage, the researcher was able to win over and collected enough data to adequately address the researcher hypothesis and objectives as well as the research problems.
Definition of Terms
INTERNAL CONTROL STRUCTURE: The organizational policies and procedures that have been established to provide reasonable assurance that it related objectives will be achieved. An internal structure is composed of the overall control environment, the accounting system and control procedure, Meig (1989).
ORGANIZATIONAL PLAN: The division of authority, responsibility and duties among members of an organization Meig (1989).
MANAGEMENT CONTROL: This is the process by which company personnel consisting of the managers and their supervisors ensure that the organization carries out its activities effectively and efficiently Holmes (1997).
SYSTEM FLOWCHART: A symbolic representation of a system or series of procedures with each procedures showing sequence. System flowcharts are widely used method for describing a system of internal control in audit working papers, Holmes (1979).
Internal Audit:
An independent appraisal activity within an organization for the review of operations as a service to management it is a manager control that function at measuring and evaluating the effectiveness of other control, Millchamp (1987).
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