The Influence Of Statutory Audit On Smes Growth And Survival In Nigeria

The Influence Of Statutory Audit On Smes Growth And Survival In Nigeria

Abstract

This exploration work examines the influence of statutory inspection on SMEs growth and survival in Nigeria. inspection plays a significant part in growth and survival of small scale business. The exploration deals with the problems adjudicators encountered during the inspection of small scale business to enable them ascertain that their statement of affairs shows a true and fair view. Questionnaires, particular and oral interview were used to collect data. The data collected through the exploration tools were anatomized using chance and ki- forecourt( X2) were used to test the suppositions. The result reveals that some small scale business don’t keep good account or records of sale. The study concludes that small scale business can do well if their account system is streamlined to meet the standard account system procedures and practice. Grounded on the findings, the study recommends amongst others that the government should encourage these small scale businesses by giving them reasonable quantum of times when they won’t be needed to pay duty.

Chapter One

Preface

Background to the Study

Auditing, as it live moment was established as a result of the separation of power from the control of business. The possessors entrusted their business to directors and the possessors are also presented with a stewardship account. This stewardship

account is generally done by means of fiscal statement. The fiscal statement is in form of profit and loss account and the balance distance of the business.

In these circumstances, the need arise for some means by which the accounts presented to them by their directors can be reckoned upon of error in advertently made.

It was for this reason thus that the rehearsed is to corroborate on behalf of the possessors. Obviously it’s inoperable and insolvable for the proprietor of business to examine the books and records of the business. The proprietor appoint adjudicator to act for them. Auditing is an examination by an independent expert i.e. the adjudicator to act for them. Auditing is an examination by an independent expert i.e. the adjudicator of a set of fiscal statements and of the underpinning books and records which affect in the adjudicators furnishing an opinion on the fiscal statement.

Adjudicators concerned themselves primarily with the evidence of delicacy of customer’s records, exercising substantiation available within the confines of the business. The posterior growth of the demand for dependable fiscal information by third parties supplying credit or capital to expand enterprises, adjudicators turned to the examination of fiscal statement. Then the external substantiation to corroborate company figure increased in significance is still important adjudicators fete that the account system that produces the fiscal and operating information to be reported is a crucial factor in the delicacy andreliability of the results.

Since it isn’t obligatory that all forms of business must prepare and submit periodic statement of accounts. This write- up is to assess the problems encountered by the adjudicator in assessing the books of accounts, of small scale business in Nigeria and the problems and prospect of these business of accounts checked annually.

This exploration work examines the auditing of small scale business, problems and prospects with. This came applicable because small scale assiduity is a catalyst towards profitable growth in developing countries similar as Nigeria.

Statement of Problem

It was noted that the operating sale used by small scale business frequently differ significantly from those of large companies.

Some small- scale business don’t keep good account system or records of sale, they did it out of ignorance. numerous possessors don’t know the quantum of pro lit he’s making and whether he could do better and by how much the problem is attributed to the qualification and exposure of the possessors.

The exploration has shown that only many of possessors contribute to the fund of original capital. utmost entrepreneur of small scale business is aversive to inspection their accounts because of the cost and other sees it as a way of probing into their sequestration.

utmost of these small scale business lack controls over the running conditioning of their business association. Their conditioning are run aimlessly. Since utmost of ’ boardwalk scale business don’t review their accounts they do n’t pay duty to the government, indeed many that pay duty, pay it out their direction and not their profit. particular interview with adjudicators from two account enterprises visited revealed that accounts business could be espoused, the small scale business inclusive irrespective of thenon-maintenance of proper account records.

Exploration Questions

The purpose of this study is to give result to the following problems faced in auditing small scale business.

Are proper books of accounts been kept?

ii. To what extend has the accounts of SMEs prepared in agreement to standard and CAMA 1990?

iii. Is the internal control system of the realities effective for the adjudicator to make an opinion?

iv. What are the educational qualifications of persons in charge of preparing the SMEs regard?

Ideal of the Study

The following are the objects of the study;

To know if there’s proper books of account been kept.

ii. To determine the extent at which the accounts of SMEs are prepared in agreement to norms and CAMA 1990.

iii. To find out if the internal control system of the realities effective and can be reckoned upon by the adjudicator.

iv. To examine their educational qualification of the person in charge of preparing the SMEs regard.

Statement of Suppositions

For the purpose of this study, the experimenter has developed the suppositions which will be tested in the posterior chapter; the suppositions are as follows;

thesis One

HO SMEs don’t maintain proper books of account.

HI SMEs maintain proper books of account.

thesis Two

HO The account prepared in SMEs aren’t in agreement with standard and CAMA 1990.

HI The account prepared in SMEs are in agreement with account standard and CAMA 1990.

thesis Three

HO There’s no significant relationship between internal control system in place in SMEs and inspection.

HI There’s significant relationship between internal control system in place in SMEs and inspection.

thesis Four

HO The person in charge of preparing the SMEs regard doesn’t have the educational qualification.

HI The person in charge of preparing the SMEs regard has the educational qualification.

Significance of the Study

In regard to the applicability of this content, the influence of statutory inspection on SMEs growth and survival, the study covers areas which are useful.

1. It’ll expose druggies of this exploration work on the problems of auditing small scale business.

2. The donation of the small- scale assiduity to the industrialization of the frugality.

3. It may also expose avenue that will bear farther exploration.

Compass of the Study

This study is confined to the influence of statutory inspection onSMEs growth and survival in Nigeria. The probe cover between 2010 and 2013( 4 times fiscal time’s of the case study). Nosakhare

Bakery is used as the case study of the design and the study covers Nosakhare Bakery in Edo State.

Limitations of the Study

The experimenter in the course of this study encountered a lot ofproblems, which are bandied below

station of Repliers It was delicate for the experimenter of the constant information as a result of the constant incapability of cube and operation to give us acceptable attention due to important responsibility and work cargo at the time we demanded their backing.

fiscal Constraint A lot of plutocrat was Spent in looking for accoutrements for this exploration aid this farther compounded the experimenter’s fiscal problems.

Description of Terms

Auditing This is the independent examination of the expression ofopinion on the fiscal statement of an enterprise by an appointed adjudicator in performance of that appointment in compliance with any applicable statutory obligation( UK Audit Practice Committee).

Internal Control This is as the total of controls, fiscal or else, established by the operation in other wise, established by the operation in order to carry out the business of the enterprise in an orderly and effective mores, insure adherence to

superintendences, programs guard other means and secure as far as possible the absoluteness and delicacy of records( APC Guidelines).

Adjudicator An adjudicator is a competent accountant, who examines counting hooks and record with a view to expressing in opinion there in.

crimes They’re unintentional miscalculations in the fiscal statement. Frauds They’re purposeful misstatement in or deletions of quantum in the account records or fiscal statements.

Financial Statement Are the profit orloss account and the balance distance of the business.

Working Papers These are documents the adjudicator used to record his work during the process of auditing the customer’s account records.