AUDITING AS A CONTROL IN PUBLIC SECTOR ACCOUNTING

(A CASE STUDY OF FEDERAL MINISTRY OF FINANCE ENUGU)

Chapter one   

• Introduction

1.1     Background

• Statement of problems
• Purpose of the study
• Scope pf the study
• Research questions
• Null hypothesis
• Significance of the study

Chapter two 

• Review of related literature

2.1     History of auditing as a profession

• Legal framework of public sector auditing
• Auditing and corruption in Nigeria
• Auditing and fraud detection in government institutions
• Internal auditing in government agencies
• Compliance and efficiency auditing in the public sector
• Relevance of auditing standards in the public sector.
• Auditing and internal control in the public sector.
• Summary or related reviewed literature

 

Chapter three

• Research methodology

3.1     Design of the study

• Area of the study
• Population of the study
• Sample and sampling procedure
• Instrument for data collection
• Validation of the instrument
• Reliability of the instrument
• Administration of the instrument
• Method of data analysis

Chapter four

• Data presentation and result

4.1     Summary of result

Chapter five

• Discussion of result
• Conclusion
• Implication of the research findings
• Recommendation
• Suggestion for further study
• Limitation of the study

References

Appendixes

LIST OF TABLES

4.1     Reception of senior and junior staff of federal ministry of   finance Enugu on the extent auditors role promote transparency accountability deter waste and encourage good government in the ministry.

4.ii.    T- test analysis of the difference between the mean perception scores of the staff of federal ministry of finance Enugu

4.iii    Perception of senior and junior staff of federal ministry of finance Enugu on the extent professional ethics and auditing standards  were applied by the auditors in the ministry.

4.iv    T- test analysis of the difference between the view scores of the staff of federal ministry of finance Enugu

4.v     Perception of senior and junior staff of the federal ministry of finance Enugu on the extent Bribery and  corruption has reduced the efficiency and proficiency of public sector in servicing its control purpose in the ministry

4.vi    T- test analysis of difference in perception of senior and junior staff on causes of audit failure in the federal ministry of finance Enugu

4vii    Views of senior and junior staff of federal ministry of finance Enugu on the interference of nepotism, faviour and political affiliation in the appointment and removal  of auditors in the federal ministry of finance Enugu.

4vii    T- test analysis of difference in perception of senior and junior staff on the interplay of nepotism favoritism and political affiliation in the appointment and removal of auditor in the ministry

 

ABSTRACT

This work border on the auditing as a control in public sector accounting   a case study of federal ministry of finance Enugu. Its main theme is the purpose auditing serve in the public sector as a control for all financial accountability and otherwise in the public sector. Importance of the study was to help the financial controllers of government agencies understand that auditing of public sector is as more important as that of the private sector. The area of the study was federal ministry of finance Enugu.

This study is divided into five chapter, chapter one gives the general introduction about the reason why the work was embarked upon. Chapter two report the views of other authors that have conducted work  relevant to the theme of the study. Chapter three described the actual process and methods of the research the researcher used. Chapter four gives the details of researcher is analysis of data collected form the respondents  using the t-test statistics in testing the null hypothesis.

Finally in chapter five the researcher presents recommendation as well as suggestion for further research.

CHAPTER ONE

INTRODUCTION

• BACKGROUND OF THE STUDY

From time past productive resources owned by one person or group of persons. It has been a convention that the managers of the productive resources from time to time report back to the owner (s)  of the resources on how thye fare with the resources entrusted to them.

In a similar view Millichmp 1999 opined that most business today are operated by limited companies, which are owned by their shareholder and managed by directors appointed by the shareholder. Corporally the public own central government resources including nationalized industries but they are managed by the government.

As a result of this divorce between resources management and ownership it has become expedient and pertinent that has become expedient and penitent that an independent body or person (s) different form both management and ownership be situated to examine the account rendered by the manager to the owner of the economic resources for such accounts to be reliable credible and trust writing by the owners and other interested user of financial report hence the emergence of auditing as a profession.

Auditing which has become the owners “third eye” is very important in the public sector of Nigeria economy in view of fact that over 65% of the assets base and other productive resources of the country come under the control of the public sector of the economy. These assets need to be safeguarded in order that the real owner (the public) can enjoy their full benefits.

The relevance of auditing as it regards proper accountability and safeguard to the nation asset base was borne out of the fundamental roles the public sector accounting play in effective and efficient governance of the country. Ani 2001 save the rotes of public sector accounting to include the following.

1. Control purpose: To ensure efficient financial administration through system of internal control and management
2. Planning Purpose: To provide historical bases for model budget and plans as guide to the formulations of policies
3. Accountability purposes: To provide a system of financial accountability by which will promote stewardship of assets deter waste dishonesty and extravagance and promote effectiveness of reasonable cost.
4. Appraisal Purpose: To provide outsider with financial data that will help them to reach informed decision.

The basic functions of auditing therefore are of two types :

Primary and secondary functions.

The primary function of auditing is to enable the auditors to report as to whether the financial prepared my manager presents a true and fair view of the state of the financial affairs of the organization during the period under review while the secondary functions as are to detect fraud and errors and prevent fraud and errors in the accounting system. But how relevant has public sector auditing become in view of the current decay in the management of public resources in Nigeria? In the nutshell corruptions bribery mismanagement of  government resources and lack of honesty that characterize the economic life in Nigeria has dragged the efficiency and proficiency of public sector auditing in Nigeria to the mud.

Public office holder and the entirely of the agents of government at all levels in Nigeria have made the public sector audit system which to was enshrined in our constitution to ensure proper accountability transparency and good government a mere subject of contemplators system should not permit looting of real asserts and public funds and mismanagement of the scare economic resources as it obtain in Nigeria public sector.

The factors or problem that lead to the ugly scenario described above are not far fetched. This is because most of the auditors appointed by the executive arms of government at all level of governance to take the mantle of auditors responsibilities in the public sector are benefit of the contravention  ethical and professional qualities and standards which an auditor must have.

The professional qualities and auditing standards issued and approved by American institute of certified public accountants and adopted by Nigeria Accounting Standard Board (NASB) includes:

1. Competence: An auditors must be thoroughly  trained and move his competence before he can sign an audit report. This implies that he must belong to a professional body approved by the parliament.
2. Independence: An auditor cannot give an unbiased opinion unless he is independent of all parties involved and must be seen to be so.
3. Integrity: Qualified accountants are renowned for their honest discretion and tactfulness.

In Nigeria these qualities and standards enumerated above are almost absent and auditors are not appointed inconsonance with relevant statutory provision of audit regulatory authorities or laws such as relevant sections of company and allied Matters  act 1990 (CAMA) and the Nigerian constitution. Nepotism tribalism and police affiliation and compensations are criteria used in Nigeria to appoint auditors into the public sector. These have made audit system in the public sector a weak ineffective and above all unreliable when it is compared with what obtains in the civilized world where we repatriated the practice of auditing to Nigeria. The independence of auditors in the public sector  do not consider whether guaranteed and therefore are impaired. The manner in which auditors are also appointed in the public sector as not consider  whether the person to be appointed has competence and all the technical where withal and know how required of an auditor the qualities of honesty discretion and tactfulness which are paramount and the aroma of auditing world over are exiting in Nigeria only in theory.

Based on these distortions and decadence in the system of auditing in the public sector it has become a clarion call that a reappraisal of public sector auditing in Nigeria be done to reposition and revamp the system so as to reap all the benefit inherent in an functional audit system hence my choice of the topic (auditing as a control in the  public sector accounting)                                                     

 

• STATEMENT OF PROBLEM

The enumerated problem below are found to be inherent in the audit system of the public sector in Nigeria.

1. The impact of auditors role to promote transparency accountability and encourage good governance are not felt in the public sector.
2. It was difficult to ascertain the extent professional ethics and auditing standards were applied by auditors in the public sector
3. Bribery and corruption in the public sector has reduced the efficiency and proficiency of auditing in serving its control purpose
4. It was difficult to ascertain the extent nepotism and political affiliation interfere in the appointment and removal of auditors in the public sector.

 

• PURPOSE OF THE STUDY

This research top auditing as a control in public sector accounting a case study of federal ministry of finance Enugu was set towards establishing the following objectives.

1. To ascertain the roles auditors play to promote transparency accountability and encourage good governance in the public sector especially in the federal ministry of finance Enugu.
2. To find out the extent professional ethics and audit standards were applied by auditors in the public sector.
3. To ascertain the extent bribery and corruption in the public sector has reduced the efficiency and proficiency of auditing in playing its control purpose in federal ministry of finance Enugu.
4. To find out the extent nepotism favoritism and political affiliation interfere in the appointment and removal of auditors in federal ministry of finance Enugu.

 

• SCOPE OF THE STUDY

This research work is limited to the role auditing system play in public sector accounting in federal ministry of finance Enugu.

 

• RESEARCH QUESTIONS

To guide this study four research  questions were formulated as follows

1. To what extent do auditors role promote transparency accountability and encourage good governance in the federal ministry of finance.
2. To what extent do profession ethics and auditing standards were applied by auditors in the federal ministry of finance Enugu
3. To what extent does bribery and corruption in the public sector reduce the efficiency and proficiency of auditing in serving its control purposes in the federal ministry of finance Enugu.
4. To what extent do nepotism favoritism and political affiliations have interfered in the appointment and removal of auditors in the federal ministry of finance Enugu?

 

 

• HYPOTHESIS

Ho₁:   There  was  no significance difference (P<:05) between the mean

perception of the senior and junior staff of federal ministry of finance on whether the impact of auditors role to promote transparency accountability  and encourage good governance are felt in the ministry.

Ho₂:   There  was  no significance difference (P<:05) between the view of

senior and junior staff of federal ministry of finance on whether the extent professional ethics and auditing standards were applied by auditor in the ministry

Ho₃:   There  was  no significance difference (P<:05) between the mean

perception of the senior and junior staff of federal ministry of finance on  extent bribery and corruption in the public sector has reduced the efficiency and proficiency of auditing in the ministry.

Ho₄:   There  was  no significance difference (P<:05) between the view of the

senior and junior staff of federal ministry of finance on the extent nepotism favoritism and political affiliation interfere  in the appointment and removal of auditors in the ministry.

 

• SIGNIFICANCE OF THE STUDY

This work will be of immense benefit to the federal ministry of finance because of the elaborate emphasis placed on the role auditing play in ensuring proper accountability transparency waste determinate and promotion of good governance which the ministry is striving to achieve.

The entire stakeholder in the management of centrally owned economic resources will find the research work very beneficial especially now that fight against corruption and bribery is one of the priorities and challenges of present dispensation.

The work will also be immense benefit to all  the following peculiar ways:

1. The study attached serious emphasis on the auditing standards such as independence competence integrity and objective as the fundamental criteria to serve as bench marks in measuring the qualities of auditors to be appointed in the public sector.
2. The study exposed a lot about corruption in the public sector and this will serve as means of complimentary government effort in the fight against corruption in the sector.
3. The knowledge that accounting and auditing activities are geared towards guiding against misuse of scare economic resources is vital indispensable in the management of public financial affairs. The study gives knowledge to the key player in the public sector. The study also highlighted area of significance in the public sector auditing which need serious and immediate improvement  such areas includes auditor independence auditor’s liability auditors appointment and removal.

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