THE INTERNAL AUDIT AS AN AID TO MANAGEMENT CONTROL

ABSTRACT

This research work is on the internal audit as an Aid to management control with reference to Enugu state University and technology (ESUT). The main aim of this research work is to determine and to ascertain how management administration can be more efficiently run, in order to creat a conductive environment for business and to analyze the internal audit functions to determine how it can realize management control. The sources from which the necessary data were collected for the purpose of this research work are from primary and secondary sources of data collection. The primary data were gotten through the use of questionnaires and oral interview. The secondary data were gotten through newspaper, magazines, government Journals and also textbooks. The data collected were analyzed  using simple percentage analysis. Hypothesis were formulated and tested using chi-square (X‑2) method. From the data collected and analyzed, it was discovered that the internal control system of the universities are weak owing to lack of trained internal audit staff, lack of cordial relationship between the Internal Auditors and the department staff. The management should ensure that the internal audit department is staffed with enough skilled personnel and management should adequately provide man power development facilities for the internal Audit.

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Controlling is a management monitoring function that deals with the measuring and correction of the performance of subordinates with a view to achieve organizational objectives with maximum efficiency and at a minimum cost.

It check s to see that plans have been carried out, adhering to deviations. If any it compares actual performance in the past periods.

A business grows, the detailed auditing of a growing number of transactions produces a corresponding increase in the size of the auditor’s bill for his service business mangers found them selves looking for less expensive substitute for the increasingly costly annual audits, preferably a substitute which might at the same time better meet their needs. The solution which evolved was the development of internal means security the desired control over accounting and operations as a whole. Internal means of control are known as “internal checks and internal audits”.

In anticipation of the manpower needs of an independent Nigeria, the federal minister for Education appointed in 1959 the Ashby commission to conduct an investigation into the Nigeria needs in the field of higher education, the panel comprised three Britons, three Americans and three Nigerians with Sir Eric Ashby as Chairman. The submission of the report in 1960 brought about the establishment of the first generation universities which include the University of Nigeria, Enugu Campus, 1979, the third generation university were created these include Anambra State University of Science and Technology (ASUTECH), now Enugu State University of Science and Technology (ESUT). The law which established this was enacted in 1980. The government appreciates the invaluable roles of these institutions in the over all development of the nation via the provision of well trained middle and higher level man power for various departments of the public and private sectors. In recent times, several cases of arson, frauds, misappropriation of public funds, theft of property and other types of malfeasance have been reported in the government institution and establishment all over Nigeria in view of this, the huge investment by government. In these concerns should be controlled, monitored, safe-guarded and made result-oriented. The role of internal audit department as the “watch dog” of these controls established by the institutions becomes the only sure means to control the institutions.

It is pertinent to note that report and government white paper on the report of various board of enquiry instituted to investigate the cause of non-performance in government establishment have indicated that management/administration are responsible for improper state of things. It is conceived however, that if they have complete control of the activities of their staff an efficient administration would be enshrined. It is also necessary to ensure that management policies and directives are properly adhered to. As management is far from the scene is not possible management must reply on various techniques and of course the internal audit department to implement its directive decision and goals.

1.2     STATEMENT OF PROBLEMS

The management control system of our organization is facing a lot problem. There is inefficiency in administration, adequate attention is not paid to internal auditing by management, funds and property are not managed to ensure safety, harmonious work relationship does not exist between internal auditor and other workers, and most of the internal auditors lack the requisite skill.

1.3     OBJECTIVE OF THE STUDY

The objectives of this study include to ascertain how management administration can be more efficiently run in order to create a conducive environment for business.

Secondly, the aims to analyze the internal audit function to ascertain the problems facing internal audit and seek ways to solving them.

Finally, to ascertain the procedures and methods of internal audit in an organization and evaluate its effectiveness in the realization of management objectives.

1.4     RESEARCH HYPOTHESIS

Ho: The internal auditing do not help the organization to attain its objectives.

Hi: The internal auditing help the organization to attain its objectives

Ho: The internal auditing do not aid in efficient running of the universities

Hi: The internal auditing aid in efficient running of the universities.

1.5     RESEARCH QUESTIONS

The following questions were asked by the researcher:

1.  To what extent has internal auditing aided efficient running of the universities?

2.  To what extent was internal auditing helped the organization to attain its objectives?

3.  To what extent has the university authorities paid adequate attention to internal control?

4.  What is the degree of credibility of the internal auditors of the universities?

1.6     THE SIGNIFICANCE OF THE STUDY

The study is intended to highlight the extent that proper utilization of internal audit science has contributed towards effective management control.

It will also help the institution under study to see areas of weakness and then help other institution in utilize its services properly for effective internal control. The need for establishing a viable internal audit department to be effectively used for control, would emerge, even in organizations where it has not been installed.

Finally, this study will help readers from time to time on the topic of study, have a reference base.

1.7     THE SCOPE OF THE STUDY

The researcher will like to concentrate on the Enugu State University of science and Technology (ESUT) with focus on the work boardering on internal audit objective, procedures and problems.

1.8     LIMITATION OF THE STUDY

The researcher has not got enough resources to carry out this study in all the university, therefore it is restricted to ESUT. The finding may not reflect the entire situation in all the ESUT as a whole, but averagely, what happen in ESUT, can be applicable to other area, the researcher should have gone into discussion on the aid to management control. Again the auditing should have include private individuals who may engage in one project or the other. This may be a limitation to the discussion of the aid to management control.