Internal Audit As A Management Tool

Internal Audit As A Management Tool

Chapter One

Preface

Background Of The Study

This is a exploration design. The subject of study is “ Internal inspection as a Management Tool ”. The choice of the subject matter reflects the experimenter desire to exfoliate light on the effectiveness and effectiveness of internal inspection of commercial association similar as Banks, Manufacturing Company, Government parastatals, etc, through findings, contribute towards evolving an established programs and procedures, thereby icing a sound and dependable internal control system.

Oladipupo( 2005 96), refocused out that internal inspection is a directorial tool which functions by examining, assessing and reporting on the acceptability of internal control as a donation to the proper profitable, effective and effective use of coffers within an association.

Internal inspection is a control which measure evaluates and reports upon the effectiveness of internal control, fiscal and else, as a donation to the effective use of coffers within an association, which was stated by Nwabueze,( 2000 278).

It’s the demand of the Companies and All Matter Act( CAMA) 1990, that operation should keep and maintain accounts, which presents a true and fair view of the association fiscal position which must be attested to by an external adjudicators report. To achieve this operation do establish its own programs which all the functional and service units of the association must misbehave with to assure itself that its programs and programme are duly enforced, operation does establish colorful internal control system among which the internal inspection.

Internal inspection is an independent arm of the association which help in setting both fiscal and other operations with the specific purpose of rendering defensive and formative services to operation.

The proper administration of any association is solely dependent on the operation which sees to the effective and effective application of the limited coffers available to it through proper planning controls to insure the consummation of commercial objects.

With the growth in size and complexity of numerous associations, the need for internal inspection has similarly increased, so that it’s moment a major factor in establishing the quality of an associations internal control system and its development.

The establishment of the internal inspection isn’t needed by law but is the brain- child of operation with the specific ideal of fulfilling its stewardship function. This is why the internal inspection unit has been linked not only as an arm of operation but also as an important tool the operation uses in the discharge of its duties.

This study will thus go a long way to icing the effectiveness and effectiveness of the internal inspection. Thereby icing a sound and dependable control system.

Statement Of The Problem

The explanation for choice of the subject matter is the incapability of operation in icing a proper internal inspection system coupled with the absence of a sound and dependable internal control system.

Ojaide( 200 6) refocused out that the part of an internal inspection department is to help operation in icing that the system of account, internal control and internal check are operating effectively and effectiveness.

Objects Of The Study

The objects of the study are

1. To ascertain if account records are accurate and dependable.

2. Serving as a training unit on internal control matter.

3. Review of functional performance and reporting on friction.

4. To ascertain whether the internal check and the account system.

5. To ascertain the independence of the internal inspection department.

6. To find out whether periodic report on operation of the association are made to operation.

7. To look at the performance of the different departments, branches and assess the impact on the over each performance of the academic institution or association.

8. To find out whether the internal control system is sound in principle and effective in operation.

9. To find out whether periodic reports on operation of the association are made to operation.

Exploration Questions

1. Are all established programs and plans followed by the different department?

2. Are periodic reports carried out?

3. Is the account records accurate and dependable?

4. Is the internal inspection department independence?

5. Do periodic report on operation of the association made to operation?

6. Is the internal check and account system effective?

7. Do performance of the different departments make any impact on the overall performance of the association?

Compass Of The Study

The nature, compass and responsibility of the internal inspection may vary from parastatal to parastatal this study will hence, cover the internal inspection department or unit of commercial association similar as Banks, oil painting & gas companies, manufacturing company, government parastatals,etc. in Nigeria.

Exploration Thesis

1. There are significant differences in the system of establishing programs and plans.

2. The performance of the different departments differs.

3. The periodic report made every time aren’t the same.

4. The account records of the association made every time differ.

Significance Of The Study

This study will be of immense benefit to the operation, as good quality of work rendered by the internal adjudicator to operation will ameliorate the quality of services rendered by the units, therefore icing the consummation of commercial objects.

It would punctuate blights and problems in the system and suggest ways of amending them, thereby icing enhancement in the quality of work of the internal inspection department and hence increase the confidence assessed on them by the operation.

likewise, the study will throw further light on the significance of effectiveness and effectiveness of internal inspection in the association.

An sapience into the extent of effectiveness and effectiveness of internal inspection of the association will help not only in sensitizing operation of the association on the requirements for an established programs and procedures but also contribute towards evolving a sound and dependable control system.

Limitation Of The Study

The experimenters were brazened by some certain constraints, which nearly undermined the objects and points of the exploration.

The experimenters were brazened by the incapability to share and observe some of the conditioning carried out by the staff of the internal inspection similar as stock taking and the internal adjudicator’s visit to other department and unit of the association. therefore, vital information that would have been gathered were denied the experimenters.

Also, as a result of the limited time available to the experimenters, it wasn’t possible to reach the association external adjudicators who would have given information on how dependable the report of the internal adjudicator is.

Functional Description Of Terms

1. Internal inspection This is an independent appraisal exertion within an association for the review of operation as a service to operation; it’s a operation control which functions by measuring and assessing the effectiveness of other controls.

2. operation These are the group of people who engage in performing routine and strategic duties so as to insure the consummation of commercial objects.

3. disquisition An disquisition is the examination of records and accounts of an association for a special purpose.

4. inspection Report It’s the statutory final product of inspection process.

5. Auditing This is an independent examination of, and expression of opinion on the fiscal statement of an enterprise, association by an appointed adjudicator in performance of that appointment and in compliance with any applicable law and regulation.

6. Internal Control This isn’t only about internal inspection or internal check but the whole system of control established by operation to insure that the association is run in an orderly and effective manner. This can be achieved by icing adherence to operation programs, safe guarding of asset and securing as far as possible the delicacy and absoluteness of records.

7. Internal Check This is the isolation of duty similar that no bone person is responsible for the processing and recording of a particular sale.

8. True and Fair This is a term common in auditing which can be likened to mean a fact which conform to standard that is, it’s free from bias and flesh druggies anticipation.

9. Appraisal This is assessing the value of quality of work done by operation.

10. Statutory This means having a legal backing. Auditing is under the demand of the companies and Allied Matter Act( CAMA) 1990.

11. Effectiveness The internal inspection is effective when its actuality which causes a striking print produce the intended result.

12. Insuring This has to do with examining books and records to catching on their verity and fairness as regards the fiscal statement.

13. Financial Statement It can be defined as a written account of data of an individual, institution or associations fiscal records.

14. Examination This is a popular term used in auditing which refers to verification and vouching.

15. Research This is a careful study or disquisition into discovering new data or information similar as the exploration carried out in the content “ Internal inspection as a operation tool ” helped to discover benefits, problems and corrective measures.

16. Limitation This is nothing but constraints faced by the experimenter while carrying out the exploration work which could affect from time factor, inadequacy of exploration accoutrements , lack of cooperation from repliers etc.

17. Repliers Repliers aid exploration work as they help to give answers to certain question/ questionnaires.

18. Questionnaires This is a list of questions covering all aspect of the exploration work; to be answered by repliers in order to discover data and information.

19. Staff Strength This is simply the number of staff employed in a particular department. It can either be a number just perfect, less or above the needed number demanded to attain the objects of the department.

20. inspection Programme Audit programme is a schedule of how the auditing work is carried out. It’s a companion to staffs of the inspection department so as to reach a asked thing.

21. Misappropriation This is an irregularity carried out by staffs or operation but being checked by an adjudicator through vouching and verification.

22. Independence Independence is the freedom from any influence which may militate against the discharge of a responsibility and can be seen in a prejudiced opinion the adjudicator is anticipated to be independent of other controls.

23. Management Tool Managerial tool refers to an instrument like internal inspection which operation uses to insure the abidances of its programs, safe guarding of means and securing as far as possible the delicacy and absoluteness of records.

24. Accounting System Is a staff appointed by operation to estimate the conditioning of operation by reviewing its operation as a service to them. It also functions by measuring and assessing the effectiveness of other controls.