Internal Audit Practice And Corporate Goal Attainment In The Manufacturing Industry

Internal Audit Practice And Corporate Goal Attainment In The Manufacturing Industry

Chapter 1

Preface

Background of the Study

An essential condition for the survival of a manufacturing assiduity or further generally of an association lies on the capability of its members to act reliably and efficiently to achieve the objects of the assiduity. The substantial collaboration of geste can be achieved in multitudinous ways. Supervision of directors and staffs of manufacturing assiduity is getting ineffective. still it may be wished to maintain these ways of controlling but it would only be applied to the part of the assiduity( Brown, 1999). thus it’s necessary that operation put in place mechanisms to fill the gap in supervision.

The fiscal and commercial thing attainment of a manufacturing assiduity is sustained by effective internal systems in which the practices of the internal inspection has an important part, raising the trustability of the internal control system which is always aimed at perfecting the process of threat operation, and, over all, satisfying the requirements of internal druggies( Fama, 2008). The effective practice of internal inspection also supports and enhances the system of responsibility that the administrative directors and workers of manufacturing assiduity have towards the possessors and other stakeholders. The Internal Audit Department provides a dependable, objective, and unprejudiced service to the operation, board of directors, and inspection commission, while stakeholders are interested in return on investments, sustainable growth, strong leadership, and dependable reporting on the fiscal performance and business practices of a manufacturing assiduity.

Proper understanding of the part and significance of the internal inspection is one of the preconditions for successful strategy perpetration and attainment of commercial pretensions of a manufacturing assiduity. still, this exploration aims to examine the effect of internal inspection practice on commercial thing attainment of some named manufacturing enterprises in Port Harcourt, Rivers State.

Commercial thing attainment by manufacturing diligence is a major concern these days due to significance of the global competition. One factor of this commercial thing attainment lies on the ethical and responsible geste of its directors and workers. But at the end of the 20th century, the Enron and WorldCom dishonors show that there was a lack of control in companies( Bertin, 2007). Following these fiscal dishonors, conduct were taken. It has come essential to give an ethical control in the interest of leading to better take into account the content of internal control practice, in order to overcome the sins of profitable and legal support. In a common interest, ways to measure the impact of moral opinions have been set up and the manufacturing assiduity must be suitable to justify its conditioning( Ethical morals and values), and this control may be performed by the internal inspection( Mercier 2000).

Commercial thing attainment of manufacturing assiduity can also be” the capability of an association to identify and apply applicable strategies within the frame of the points it pursues in other maintains good character”( Bouquin, 1997). The commercial thing are vary from one manufacturing assiduity to another for illustration a manufacturing company may want to come the largest assiduity in the world or to remain a successful technical establishment, or indeed be stylish suitable to achieve the pretensions it has set. Once the purposes have been defined, success in the attainment of these commercial pretensions depends on the capability to define applicable strategies and to apply them. establishment arrangements must insure the position of translucency and responsibility in both profitable and strategic reaches and we call internal control the combination of similar bias. It’s necessary to periodically test the effectiveness and felicity of a particular aspect of internal control substantially importantly the mode of practice. Auditing is the process of studying and assessing internal control and certain of its aspects, as well as its anticipated outgrowth. The preceding result may help to determine the effectiveness of the assiduity. It’s commodity important because the challenges of every work day are for the manufacturing diligence to be competitive so as not to be forced out of the request.

Statement of the Problem

Internal inspection practice involves the evaluation function available to a establishment to examine and appreciate the proper functioning, thickness and effectiveness of its internal control. To this end, internal adjudicators should review the colorful conditioning of the assiduity, measure the pitfalls and the arrangements put in place to control them, insure performance in carrying out assigned liabilities and make recommendations to ameliorate its security and increase effectiveness( IFACI, 1998).

Internal inspection practice is one of the essential mechanisms of the internal control system. No manufacturing assiduity can disregard it, indeed incompletely, without losing at the same time control of a key to its survival. A vital member of firm operation, the internal adjudicator is a party to an inspection duty defining his independence. When the internal inspection department doesn’t meet the prospects of elderly operation, it should take acceptable way to upgrade it( IFACI, 1998).

In any event, the establishment must maintain control of the perpetration process of internal checkups. As manufacturing assiduity is pursuing objects in an profitable terrain, the establishment is the meeting place of a wide range of stakeholders interested in its success. This complex situation has urged the experimenter to seek to understand more precisely the donation of internal inspection practice in attainment of commercial pretensions.

Purpose/ Objects of the Study

The following are the objects of this study

1. To examine the effectiveness of the internal inspection in named manufacturing enterprises in Rivers state.

2. To ascertain the relationship between internal inspection practice and commercial thing attainment in the manufacturing assiduity.

3. To determine the factors militating against commercial thing attainment in manufacturing companies.

Exploration Questions

1. What’s the effectiveness of the internal inspection in named manufacturing enterprises in Rivers state?

2. What’s the relationship between internal inspection practice and commercial thing attainment in the manufacturing assiduity?

3. What are the factors militating against commercial thing attainment in manufacturing companies?

Exploration Thesis

HO There’s no significant relationship between internal inspection practice and commercial thing attainment in the named manufacturing assiduity in River State

HA There’s significant relationship between internal inspection practice and commercial thing attainment in the named manufacturing assiduity in River State

Significance of the Study

Considering the significance of the internal inspection practice towards the attainment of the commercial thing of the manufacturing assiduity, this study is coming at the right time as the outgrowth will educate the operation and decision makers of manufacturing assiduity on how proper practice of internal inspection can be used as a tool for the commercial thing attainment. This will also help in the consummation of the assiduity’s long term objects.

This exploration will also serve as a resource base to other scholars and experimenters interested in carrying out further exploration in this field latterly, if applied will go to an extent to give new explanation to the content.

Compass of the Study

This study will cover the conditioning of the internal inspection department in the named manufacturing diligence in Port Harcourt, River State with a view of catching on the effectiveness of the internal control medium

Limitation of the study

1. Financial constraint-inadequate fund tends to stymie the effectiveness of the experimenter in sourcing for the applicable accoutrements , literature or information and in the process of data collection( internet, questionnaire and interview).

2. Time constraint- The experimenter will contemporaneously engage in this study with other academic work. This accordingly will cut down on the time devoted for the exploration work.

3. Due to nonpublic reasons we didn’t entered the manufacturing diligence internal inspection reports on time.

4. The internal inspection departments of the named manufacturing diligence were small in size and thus colorful types of interviews weren’t collected.

Description Of Terms

Commercial thing are statements that outline an overall company vision that includes an operating gospel and specific objects

inspection an sanctioned examination of an existent’s or association’s accounts, generally by an independent body

Ethics moral principles that govern a person’s or group’s or assiduity’s geste .

Responsibility The obligation of an individual or association to regard for its conditioning, accept responsibility for them, and to expose the results in a transparent manner.

References

Bertin.( 2007), ” “ Managing change and size pitfalls ”, Internal Auditor,Vol. 56No. 6,pp. 68- 9.

BouquinH.( 1997). – The European literature review on internal auditing ” directorial Auditing Journal,Vol. 21pp. 845 – 853

Brown,R.G.( 1999). Changing inspection objects and ways. The elaboration of inspection study and Practice.T.A. Lee. New York, Garland Publishing,Inc. 1999.

Fama,E.F.( 2008), “ Agency problems and the proposition of the establishment ”, Journal of Political Economy, April,pp. 288- 307.

IFACI( institut français de l’audit et du contrôle interne),( 1998).« L’audit interne vers une collaboration renforcée avec ses collaborateurs externes».

Mercier S( 2000).” Capital A Critique of Political Economy, Volume 2,D. Fernbach( trans.), Penguin Classics, London,( firstly published in 1999