The Role Of An Auditor In Small Business Organisations
Abstract
A significant donation to the development and survival of business association is the part that adjudicators play. This exploration work, The part of Adjudicators in Small business associations, give a broad understanding of what the adjudicators part entails.
In the course of this exploration, data was collected by means of questionnaire. The collected data were anatomized with the aid of probabilities. farther analysis was done on applicable information. The statement of exploration thesis was tested using ki-square distribution.
The use of internal control questionnaire and evaluation forms by adjudicators, to ascertain and estimate the strengths and sins of internal control systems of business association, with a view to determining the degree of reliance to be placed on the internal control system, is a major finding of this exploration.
The recommendation made in respect of the below finding, is that internal control questionnaire and evaluation forms which adjudicators use in catching on and assessing internal control system should be constantly reviewed and revised in light of current changes made in guests internal control systems.
Chapter One
Preface
Background Of The Study
According to the third public development plan(vol. 1 runner 353) “ manufacturing establishment employing lower than 10 people or whose investment in ministry and outfit don’t exceed N600, 000 are appertained to as small scale diligence.
In the credit guidelines of the Central Bank of Nigeria(C.B.N) small scale enterprise are classified as those business with an periodic development of lower than half a million naira. presently, as given by the government, small scale assiduity refers to those diligence with a capital investment not exceeding N150, 000 in ministry and outfit alone.
moment, every business association intends to continue as a going concern, i.e. continue to acquire means, increase deals, ameliorate profit periphery, to remain in functional actuality into the foreseeable future and not having any intention to dock or significantly reduce its scale of operation.
To acquire this end, the association will have to launch sound internal control and account system, appoint directors and directors to direct the affairs of the business and to insure that the finances intended to achieve this end are well applied.
Business association who successfully put these structures in place may yet fail to develop and survive in insulation of the adjudicator. It’s substantiated by the fact that the directors and directors who are anticipated to manage the finances and direct the affairs of the business may begin to perform their conditioning withnon-challant station knowing completely well that their work will be checked by an independent person( the adjudicator), as a result, finances may be misemployed, diverted, embezzlement may be on the increase, loss of confidence by shareholders on directors.e.t.c. with all these, the association may no longer be suitable to continue as a going concern, and this will ultimately affect to the liquidation of the business.
No doubt, the part of an adjudicator in the development of small business association is ineluctable. With the part of adjudicator in force, the directors and directors are more careful in performing their duties as they may want to cover and maintain their integrity. As a result, mis- operation, diversion, mis- operation and embezzlement of finances will be greatly checked. The adjudicators ’ part in achieving these may include reviewing the controls of the association in the traditional areas of account and finance to insure compliance and contemporary areas of labor force, marketing, deals, and product, to insure effectiveness of the frugality.e.t.c.
During the inspection, frequent correspondences are made between the adjudicator and the customer similar as internal control letter, operation letter, letter of representation, all aimed at icing the survival of the business. At the end of the inspection, a final inspection report is made to the shareholders to boost their credibility on the directors.
This design brings out in details what adjudicators do in practice that is, their places in the development and survival of small scale business association.
A substantial aspect of this design shall concentrate on external auditing with particular reference to small business associations in Akoko- Edo.
Statement Of The Problem
Though in utmost cases, small business associations are generally operated by their possessors, yet there’s still numerous of those small business associations whose operation is rested on people other than the possessors hence the need for inspection arises.
still, in the course of this exploration, the following problems are to be examined.
Do adjudicators in small- scale business, misbehave with the vittles of the companies and Allied matters Act 1990( CAMA) in the prosecution of his inspection assignment?
How effective is their internal control medium?
Do audited accounts present a “ true and fair view?
What are the adjudicators ’ liabilities in the accounts of the business associations?
Has cases of fraud and error been averted in the business?
Is the principle of independence and honesty, faculty observed in small scale assiduity?
Do the adjudicators get all necessary information and right access to the business books of accounts and fiscal statement?
Objects Of The Study
The main ideal of this exploration work is to estimate the adjudicator himself in respect of the part he plays in the establishment similar as
To ascertain whether auditing is aimed at checking the internal control system espoused in business associations.
icing that Adjudicators in small business associations misbehave with the companies and Allied matters Act 1990 vittles in the prosecution of his inspection.
To ascertain the adjudicators liabilities in the accounts of the business association.
To insure that the audited work represent a true and fair view of the records.
The adjudicator should check fraud and error.
icing that the principles of independence, honesty and faculty are observed in the business.
The Adjudicator should have access to all the necessary information and assess to the business books to help the owner have a sound account ways.
The Compass Of The Study
This exploration work looks at the part of the adjudicators in small scale business associations with reference to small scale business associations in Akoko- Edo. It takes a critical look and reveals the colorful conditioning of the adjudicators in order to ascertain the performance of the internal control of small business associations.
An sapience as to the correctness and delicacy of the records kept by small business association will be looked into and the adjudicators areas of attention will be emphasized.
Statement Of Research Hypothesis
The under listed thesis are formulated for testing in this exploration study. Scientific test of these thesis are employed to arrive at reasonable conclusions. The formulated thesis for considerations includes
a) Ho The adjudicator doesn’t help to check the internal control system in small business associations.
Hi The adjudicator helps in checking the internal control system in small business association.
b) Ho The adjudicators don’t play a significant part in the development and survival of small business association.
Hi The adjudicators play a significant part in the development and survival of small business association.
Significance Of The Study
The exploration work is an disquisition into the part of the adjudicator in small business associations with reference to small business associations in Akoko- Edo.
Its purpose is to show the significance of an adjudicator to druggies of counting information similar as
Government
The public
operation/ directors
Creditors
Private individualities
duty critice.t.c.
Its also grounded on correcting the wrong interpretation of the part of adjudicators in small business association.
Limitations Of The Study
A lot of limitations was encountered in collecting information in carrying out this exploration study. The problems of the administrative officers willing to give information or have a direct interview with the experimenter.
fiscal constraint is ineluctable considering the present profitable situations. Due to lack of finance at the experimenters disposal it wasn’t possible to capture numerous small scale businesses.
In developing countries like Nigeria, there’s the problem of inadequate data.
likewise, the association secretiveness as to relating their fiscal report to the experimenter was also faced.
System Of Data Analysis
utmost analysis was done by means of tables and probabilities. Tables were drawn, to show the colorful response of the question raised in the check. In testing the two thesis, ki- forecourt( X2) is used in that, the data are separate and variables studied are independent of one another.
Delineations Of Terms
Terms used in the course of this study are explained in relation to what it stands for. They include
inspection Okolo( 19877) defined inspection as “ an objective and conscientious examination of a statement of account, the underpinning records and all the available substantiation relating to the statement of account as will enable the adjudicator to form an opinion as to whether it represent a fair and true view of whatever it purports to represent and to report consequently.
AUDITING Mautz and Sharaf( 1961) say that auditing is concerned with verification, the examination of fiscal data for the purpose of judging the fastness with which they portray events and conditions
Adjudicator An adjudicator is an independent professionally trained accountant who deals with statement of accounts relating to different associations. Austin.O. Okolie( 2007).
EXTERNAL inspection Okolie( 198861) defined external inspection as “ the independent, objective and conscientious examination of a statement of account, the underpinning documents, physical means and all other substantiation as will enable the adjudicator to form an opinion as to whether or not the statement of account presents a true and fair view of whatever it purports to represent, and to report consequently ”.
INTERNAL inspection Millichamp( 1990434) defined internal inspection as “ an independent appraisal function within an association for the review of systems of control and the quality of performance as a service to the association. It objectively examines, evaluates and report on the acceptability of internal control as a donation to the proper profitable, effective and effective use of coffers.
FINANCIAL STATEMENT Ayaduba( 199616) defined fiscal statements as “ journal fiscal reports of accounts and other affiliated documents that punctuate the fiscal position of an enterprise as well as its profitability.
INTERNAL CONTROL Millichamp( 199076) defined internal control as the whole system of controls, fiscal and else established by the operation in order to carry on the business enterprise in an orderly and effective manner.
FRAUD Okolo( 1988) it’s used to relate to the purposeful mis- representation of fiscal statement/ information or mis- appropriation of means which could affect in mis- statements of an reality’s fiscal statements by possessors, operation, workers, third partiese.t.c.
ERROR Okolo( 1988) this refers to unintentional miscalculations in preparing fiscal statements.
AUDIT PROGRAMME Austin.O. Okolie( 2007) is a list of inspection assignments detailing work to be carried out by the adjudicator.
References
Anyaduba,J.O.( 1996) “ fiscal statements still a long way to go ”. ICAN News volume 1 No2 Victoria Island Lagos. A publication of The Institute of Chartered Accountants of Nigeria.
Arens,A.A.( 1984) Auditing An Integrated Approach 3rd Edition Prentice Hall Int. Englewood escarpments New Jersey.
. Okolie( 2007) Fundamentals of inspection 3rd Edition Benin megacity. Nono publishers.
Mautz,R.K and Sharaf,H.A( 1961) The gospel of Auditing, American Accounting Association, FloridaU.S.A.
Mellichamp,A.H( 1990) Auditing, An Educational primer for Account scholars. 5th Edition LondonD.P publications limited goatherds. Bush Green.
Okolo,J.U.( 1987) The conception and practice of Auditing Ibadan Evans Sisters Limited.
VivianR.V Bobby( 1977) Statement primer of Auditing. Gec and Co publisher 1. Hod London and Albon 1977.
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