AUDITING AS AN AID TO ACCOUNT ABILITY

(A CASE STUDY OF SHARON PAINT LTD.)

ABSTRACT

 

The situation of society corruption rate is increasing day by day irrespective of their social, cultural and political status. The abuse of authority and responsibility by managers of resources is becoming unbearable because of the way officers embezzle, defalcate public treasury in their custody.

The work is therefore aimed at evaluating the roles of auditing and available instruments in achieving accountability in the organization of the economy. In carrying out the survey researcher made rise of questionnaires , personal interviews and observation in obtaining the relevant information.

The project is organised in five chapters. One is introduction and focuses attention on the background of the study, statement of the problem, objectives, significance, scope and limitations of the study.

Chapter Two is the literature review which review, diversed opinion and view of the various authors in related subjects.

Chapter Three deals with the research design and methodology.  The data collected are presented and analyzed in chapter four. The recommendations based on the findings and conclusions are giving in chapter five.

CHAPTER ONE

• Introduction 1

1.1     statement of problem                                                     2

• Purpose of the study 3
• Significance of the study 4
• Statement of hypothesis 4
• Scope of the scope study 5
• Definition of terms 7

References                                                                      9

CHAPTER TWO

• Review of related literature 10

2.1     What is auditing                                                            10

• Accountability and the need in organization. 12
• Classification Of Auditing 14
• Historical origin and development of auditing. 17
• Purpose of auditing in an organization 25
• Rights and duties of auditing of auditors 27
• Objectives of an audit 36

 

          CHAPTER THREE

• Research design and methodology 45

3.1     Research Question                                                                   45

• Research design 47
• Sources of data 48
• Questionnaire Design 50
• Sample collection                                       51
• Method of data analysis 51
• Limitation of the methodology 52

CHAPTER FOUR       

• Presentation, analysis and interpretation of data 53

4.1     introductions                                                                 53

• Presentation of data 54
• Test of hypothesis 65

Appendix

 

 

 

CHAPTER ONE

 

INTRODUCTION

Obviously, the central feature of our modern economic system has been the emergence of the enterprise as a routine of fund flow and supply of human resources. Presently, small and large scale enterprises collect millions of funds generated by investors and lender and deploy the fund in business operation throughout the country. The management manage the fund of the investors and gives the investors their right as interest or dividend depending on the term of contract subsisting between the owners of the equity and the private sector organization. Thus the management of the business organization to whom the resource of the equity owners is entrusted for optimum utilization that will yield maximum profit, which is the ultimate aim of every organization in our economy.

Therefore the relationship subsisting between managers of organization and equity owners call for proper accountability and stewardship over the resources entrusted to them. And this can be achieved by instituting standard internal and external audit in the particular business organization that will ensure credence of record they are reporting to the entire nation.

To ensure that fiduciary responsibility is uplifted in business organization there is need for communication network between the parties involved that will check and control the affairs of the organization periodic. This issue requires professional responsibility of duty of care from an auditor that is qualified and confirmed by the regulatory framework.

Hence, auditing as an aid to accountability with case study of Sharon paint limited will be an in depth study to point out how auditing have helped to maintain certain standard of accountability in the entire business operation of the company and ensure going concern.

 

1.1     STATEMENT OF PROBLEM

The indiscriminate public outcry of fund in our business operation has become the concern of all individual. This problem is due to uncontrollable abuse of authority and responsibility through obnoxious attitude by the staff of business organizations at various forms. This study therefore attempts to find out the authenticity and reality of these allegations “It is know that it is a waste of effort and resource for physicians to continue giving prescription to a patient without first diagnosis” therefore we must identify the root of the problem in our business operations and find solutions to these problems accordingly.

The auditor stands in a better position to prevent and control these problems of fraudulent practice and requires that emphasis should be made on the activities of the auditor in a business organization.

 

1.2     objectives of the studY

The objective of this study is to point and identity the following areas. (a)         The role of auditors independence and integrity toward ensuring proper accountability of the operations of sharing paint limited.

• To what extent those roles have contributed to achievement of its organization desired objective.
• The significance of auditing to management for effective control of the resource of the organization through the process of examination and evaluation.
• Offer useful and substantial findings base on this report.

1.3     SIGNIFICANCE OF THE STUDY:

          The significance of this study cannot be over emphasized in the economic world. It tries to ascertain, if auditing has affected any control measures on persistent occurrence of frauds and errors in records of business organization. Thus, it also investigates the cause of these mal-practices in the economy and as well as suggest nice solution to them.

The study will bring to light the relevance of auditing to the resource entrusted to their custody. Furthermore, will highlight certain difficulties encountered by the auditor in performance of the legal duty.

 

1.4       STATEMENT OF HYPOTHESIS:

Hypothesis as a basis for reasoning a supposition formulated from proved data and presented as a temporary explanation of occurrence, as in science in order to establish a basis for future research. The purpose of hypothesis therefore is to enable one make inference about anything.

In order to prove the effectiveness of auditing toward achieving accountability it is necessary to list the hypothesis below.

Alternative Hypothesis                               HI

Null hypothesis                                 Ho

HI:       Audit work has enhanced accountability in

Nigerian business organization.

HO:     Audit work has not enhanced accountability in

Nigeria business organization.

HI:         Audit have maintained their independence in the course of

Carrying out their audit work.

HO:      Auditor have not maintained their independence in the course of carrying out their audit work.

 

• SCOPE AND LIMITATIONS OF THE STUDY

This study was restricted to Sharon Paints limited. This work while trying to obtain information relevant to the study encountered some problem, which in no measure posed a hindrance to data collection. The uncompromising attitudes of some of the respondents constitute serious problem to this study. Such attitudes include failure to keep data with the researcher, refusal to complete or even accept the questionnaires being used or grant oral interviews. Moreover, the unwillingness of some key officers (who really accept the questionnaires) to give the information as the questionnaire demands. The argue4d that they are in the world of business, facing a lot of competition therefore certain information is sensitive and must be reserved.

The study was limited by the level of resource, like time and financial available at my disposal. This factor actually reduced the scope of my project work.

 

PROFILE OF SHARON PAINT LIMITED.

Selection of this case study Sharon paint limited is based on the fact that is among the succeeding manufacturing companies in the  country. Thus the study is curious and over zealous to lok into the factors that led to the growth and mechanization of the company recently. Throughout these years ‘Sharon paint’ has been paying their worker as at when due, has adequate wor5king capital and no outstanding loan.

Nevertheless Sharon paint limited have been consistent in maintaining a very remarkable and distinguishable product that command almost the highest demand in the market with quantity and quality that will always boost or enhance the beartital work of the builders in an affordable price and moreover their profit for the year suffer the tax due for the year, practiced to ensure that the set objective and aims is achieved.

 

1.7     DEFINITION OF TERMS.

AUDITING GUIDELINE NO 7.

1. OPINION = The expression of an independent and bias free guarantee or give positive indication that the statement are completely correct.

FRAUD =            An irregularity that is intentional distortion of accounting record with criminal deception to obtain unjust benefit “AUDITING GUIDELINE NO 11)

2. AUDIT EVIDENCE = The information obtained by the auditor in carrying out the conclusion on which to base his opinion on the financial state. According to ‘’AUDITING GUUIDELINE NO 8’’
3. EMBEZZLEMENT =  Conversion of resource or property entrusted to one’s care and custody into his own benefit and use.
4. TRUE AND FAIR VIEW = The record is in accordance with fact as well as relevant and bias free, fairness is achieved through conformity with Generally Accepted Accounting Principles GAAP that is appropriate in the circumstance. Statement of Account Standard SAS I.
5. PRIVATES SECTOR = The sector of the economy which consist of privately owned organizations engaged in predicting service and goods to earn desired profit.

 

 

 

 

 

 

 

 

 

 

 

 

REFERENCE.

SIR DAVE OSUAGWU = Introduction to management Accounting 2003, revised Edition, RT ANDERSON: The External Audit Concept and Technique’’ 1977 (page 2)

 

OKORIE ONOVO : Introduction to Auditing and Investigation 2002 (2^nd Edition).

 

WELSTER NOAH: “New Wedsters Dictionary” (Delux Encyclopedia Edition) Inc USA 1981.

 

1990. LUCEY = “Cost and management Accounting”. 1990.

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