Internal Audit – The Impact of Internal Audit Function in State Ministries

Internal Audit – The Impact of Internal Audit Function in State Ministries

Internal Audit – As government has grown in scope size and complexity so too the need for internal auditing accounting for and controlling government receipts and expenditure has resulted in the need for  a staggering number of government clerks, accountants and auditors.

To purchase the complete Project Material, Pay the sum of N3, 000 to our bank accounts below:

BANK NAME: GUARANTY TRUST BANK (GTB)

ACCOUNT NAME: CHIBUZOR TOCHI ONYEMENAM

ACCOUNT NUMBER: 0044056891

After paying the sum of N3, 000, send your full name, email address and the title of the project topic as text message to our phone: 07033378184

We will send your complete project materials to your email within 10 Mins after payment.

The need for control over government revenue appropriation and expenditure should not be surprising federal, state and local government is actually the largest industry in the country. However the need for efficient and effective internal auditing system in government ministries and extra- ministerial department can not be over emphasized as the complexity of government  activities is obvious . the  annual budgets by federal state and local government are generally incorporated into governmental accounting system and financial reports, this is not the case in private sector business organization. Thus the annual budgets in conjunction with government financial reports are the primary focus of public sector audits.  Internal auditing is an independent appraisal  function established within an  organization to examine and organization Taylor and Glezen (1979) it is mainly concerned with appraised of government activities for the review of accounting financial and operations  as a  service  to the  management

INTERNAL EXTERNAL AUDITOR

A person who undertakes audit function is called an auditor. Internal audit has been described as an independent review of operation and records. Sometime continuous undertake within an organization by especially assigned staff of the organization as basis for long protection and constructive services to management Ubesis (1997).

External auditor is an independent examination of financial statement of an organization an auditor. Other than an employee of an organization but by appointment by the share holders,  like external audit, internal auditing had its role in accent time infect internal and external  audit had essentially the same beginning there was no  distinction between them prior to the nineteenth century “Ricchute (1975). Both group of auditor rely on the same data base. Also the internal user  rely on both internal and external auditors  and external user rely on external auditors. Importantly, external auditors can sometime rely upon an internal auditors work when the internal audit function is strong. As a result an organization internal audit function can have some effect on the scope of independence external auditors extermination. As an independent contractor, the external auditing firm reserves the right to direct and control its own employees, the external auditor is free to use some methods and to expand or duce the kind of works they do. An internal   auditor must be independence of both personnel and operational activities of the organization. Independence is essential to the effectiveness of internal auditing. The independence is obtained primarily through the organization independence is essential to the effectiveness of internal auditing. The organizational status and objectively. Inadequate independence makes internal auditors conclusion and recommendation to be biased.  Although internal and external auditing use the same audit methodology they have different objective when conducting  and it activities. The objective of internal auditor is to assist management concerning activities reviewed in the organization while the external auditors objective is the to express an opinion in the finical statement. Also external auditing  is a societal control which gives external financial information it user internal control serves the organization i.e an organization control which measure and evacuate the effectiveness of the other organization control however, this project in very  much interest in the internal audit function the  government miniseries. It is mainly con cerned with the appraisal of government activities for the review of accounting financial and operations as a service to the management internal auditing is more or less a management internal auditing is more or less a managerial control which function by measuring and evaluating the effectiveness of other activities that is normally done by an employee. The internal audit assures existence of effective internal control in the policies established by the government

FUNCTION OF INTERNAL AUDIT

1. Internal audit monitor the economical and efficiency in  the use of resource. It appraises the economy.
2. Safeguarding of assets; it should review the means of safeguarding assets also very the existence of such assets.
3. Internal audit ensures reliability and integrity of information. They review the reliability and integrity of financial information and the means used to identify measure, classify and report such information.
4. Compliance with policies plans procedures laws and regulation the internal audit review the system to ensure compliance with the policies plan, procedures, laws and regulation which could have a significant impact on operation and reports. They determine whether the organization is in compliance
5.   It review where necessary make recommendation for the improvement of system control and producers to ensure that they are both efficient and effective in the light of changing circumstances and practices.

REPORTING SYSTEM

Internal audit terminates when a result is submitted to the  chief executives in the government ministries. Reporting is a fundamental element of auditing. There is a basic requirement to report the result of every internal audit assigned to auditor general and accountant general to certify to what degree he is satisfied with the safeguard of government resource against fraud control of receipt and payment and accuracy of accounting records. The audit report objective clear, concise constructive and timely.

It is the responsibility of the internal auditor to report his findings exactly as observed. He should be careful in giving department credit for excellence lastly the report should be submitted to the management chief executive in time.

(Amunu partners 1989) under the civil service reform of 1988, the internal auditor of each ministry is directly responsible to the chief executive. He is expected to ensure continuous audit of the accounts and record  of revenue  expenditure,  plans, allocated and unallocated store. He is expected to submit to his chief accounting office and the auditor general a defiled audit programm and there after report periodically on the true progress of the audit, issue special report when essay in his opinion for attention on any irregularities department from earlier internal audit report or recommendation.

STATEMENT OF PROBLEM

In recent years there has been a general out cry by the public on the unmdsi-able state of internal audit service provided by the internal auditors service provided by the internal auditors. This result to fruitless impact of the internal functions.

It could be seen that human element are some of the constraints hankering the provision of quality and efficient work by the auditors to management shortage of well qualified professional in audit units has been a problem in government ministries,  and redeployment  worsens the situation. Significant audit function are performed by non- accountant staff who do not appreciate its importance.

It should be noted that there is a desperate need  for skilled and experienced staff in all the ministries and parastatals because very few department are managed by professionally trained and experience personnel .

To improve the impact of internal  audit in its expected role management should be provided with qualified staff to cope with the existing duties.  Internal audit staff are not usually considered for training under the  manpower development and training programme of the organization. Ac cording to hall the purpose of training is to supplement the trains academic education or to train him  to undertake work in a higher grade. It is however almost impossible to decide where education ends and truing starts (19 75).

This work will study  and  ascertain the degree of existence of the problem of qualify audit service rendered shortage of quilted professionals and checks with respect to established  procedures and controls.

OBJECTIVE OF STUDY

The objective of internal auditing in ministries is to assist all members of government  ministries and extra ministerial department in the  effective discharge of their responsibilities by providing them with  objective analysis appraisals recommendation and comment of the activities reviewed. The internal auditor is concerned with the phase of government activities, which he is engaged to serve. He is the “watch dog” of the department that is primary concerned with evaluation compliance and verification and should be seen working unbiased.

The objectives of this study are:

1. Ascertainment of the extent to which government finance and property are accounted for and safeguarded from losses of all kind.
2. Assessment of the impact of internal audit in compliance with policies plans procedures, law and regulation established in the system.
3. Assessment of the effectiveness of the organizational operation in obtaining its objective and efficiency with which the organization management carried out its progrmme

As a general guide every member of internal audit team must be conversant with the financial instruction or memoranda tenders board rule current budgets and other related document.

SCOPE AND LIMITATION OF STUDY

Scope: The spread and coverage of this study is mainly the audit unit of ministries of education and works and housing of Enugu. State these are the two department or ministries chosen to represent all the ministries in Enugu state since their operational modes are relatively the same.

However, due to the nature of this study the work done is limited to functional department directly involved with audit department for financial and operational. Audits such as personnel department in charge of staff performance and welfare, finance and supplied department in charge of purchases custody of property and general stores account department  in- change of all financial records and disbursement of cash and finally the administrative department that are in-charge of general information by the staff of the ministries.

RELEVANCE OF STUDY

This study will shown the  practical situation and extent to which  the internal audit unit of government ministries carrying out their expected roles and duties. The study will be relevant to internal audit organization both private and public sectors student and professional in understanding what happens in practice in government functional unity. This project will be helpful in solving practical problem associated with auditing especially   to student and any other person with little or no practical auditing experience. It will further the treatment of what could be the possible causes of internal auditors incompetence and examine the possible constraints that may nulitate against their efficient performance. In addition the extent of the  application  resource in accomplishment of established objectives and goals for program or operation to the management and public in advancement of internal auditing in organization

HISTORICAL BACKGROUND OF INTERNAL AUDIT IN GOVERNMENT

The nature of government accounting is such as to satisfy the not for profit posture of government. Government sets financial targets for knowing whether they are getting value for money. It is necessary to relate financial requirement operational performance and quality of  service. Government accounting is the process of identifying measuring  and communicating public sector economic information in monetary terms to permit informed judgement and  decision by  users of the  information. In other word it involves recording analysis  classifying, , summering , communicating interesting financial information about the public sector in aggregate and in detail reflecting various transaction involving the flow of economic value between or within government entities.

The need for accountability has given rise to the introduction of audit in government services.  According to  variable and imply quoting Norman saying without audit no accountability without accountability no control and it  there is no control when the is the seat of power (!991) government or public audit  is very  essential for ensuring public accountability.

 ORIGIN OF ACCOUNTABILITY AUDIT IN NIGERIA

Internal auditing came into business scene before auditing by public accountants. Accountability and audit in government is as old as civilization. It was used in ancient Egypt  Babylon, Greece, Rome, Europe and of course a great mercantile establishment of the middle ages. The areas of internal auditing action through out its history have been examining verifying and reporting.

DEVELOPMENT OF GOVERNMENT AUDIT IN NIGERIA

It is necessary to mention here that Nigeria was formerly a British colony. Prior to the arrival of Europeans, there had been some system of tribute, taxes to the ruling monarchs in great ancient kingdoms, of Hausaland, Igboland, Yorubaland etc.

A government Audit office was first opened in Nigeria in October 1888. It was situated in Lagos. Mr Stephenson a Briton did the opening. He was formerly stationed in Accra office of the Gold coast from which the audit of the Lagos colony was previously conducted.

In 1910, the colonial auditing department was setup in Britain as a separate entity responsible for colonial Audit under a Director General. The Local Auditor in Lagos became responsible to him in the manner prescribed by the General instructions and Rule of the colonial Audit Department. The Audit inspection normally consisted of the checking of monthly stores ledger transcripts with the accompanying vouchers in addition to cash transcripts. After the examination these vouchers were sent to London where they were examined.

Queries were raised where necessary and transmitted back to the Local Auditor for replies to be obtained. The work of the then Local Auditor could be likened to the work of the internal auditor today in government-ministries. However, some legal authorities like the Audit Act of 1956 and Federal Republic of Nigeria constitution of 1979 has empowered the Auditor-General of the federation to take over total control of the Audit of the accounts of the federal government of Nigeria and at the state level, the Auditor General of the stock. It further empowered him to assign persons to carryout such functions on his behalf and to make reports on the accounts so audited.

In recent years, public expenditure has increased tremendously and the state audit are now interested in detection of irregularities, misconduct, protection, expenditure checks against legislative authorization and correction of irregularities. Accountability thus became a companion of the accounts. Those handling government funds are now to become accountable for the funds and to the parliaments by legislature.

MONEY VALUE AUDIT

Value for money auditing is a form of operational audit and is concerned with the pursuit of economy, efficiency and effectiveness throughout the operations. The need for internal audit in government departments can be traced to the fact that public fund raised are not misappropriated and mismanaged. This view is held by the United States General Accounting office, that public office carries with the responsibility to apply resources efficiently, economically and effectively to achieve the purpose for which the resources were meant. This responsibility applies to all resource whether to public officials or by other level of government” chanler (1985) in the Nigeria context and Enugu state in particular, the main source of government revenue are taxes  and levies and statutory allocation from the federal government     the internal audit examine all records and account to make sure that revenue raised  and allocated to each ministry is efficiently  and effectively utilized. Accountability thus became a companion of the accounts. Those handling government funds are now to  become accountable for the funds and to the parliament by legislature.

   OBJECTIVE OF AUDIT

The primary objective of an audit is to  make investigation into the books of accounts and  sources document information from which they have been written up, to enable the auditor report on the accuracy or balance against profit and loss account or other statement prepared from such books. Detection and prevention of fraud and errors are secondary objective which by moral check reason are of considerable important advantage devired from audit.

The federal government financial regulation state that, “Auditor General shall examine in such manner as he may think fit.  The account relating to public funds and property and shall ascertain whether in his opinion.

The accounts have been properly kept all public money have been fully accounted for and the rules and procedures applied are sufficient to secure and effective check on the assesment collection and proper allocation of revenue, money have been expended for the purpose for which they were  appropriated and the expenditures have been made as authorized and essential records are maintained and the rules and procedures applied are sufficient to safeguard and control public property and funds””(1976).

ADVANTAGES OF INTERNAL AUDIT

The work of the external auditor is greatly reduced if internal audit programme is properly run, as the internal audit is continuously employed  in the same concern and has access to more confidential information at all levels of management. This make the internal audit a repository of information where the external  audit can consult.

Internal audit provides a check on the accuracy of numerous government financial statements and ensure a constant examination of internal check control.

It checks the operational standards ensure enforcement of the organization standard practice and acts as a moral influence on the staff to promote efficiency by compelling officers to keep to working standards and books of accounts up to data.

INTERNAL CONTROL AND CHECK

Brown state that the primary work of the internal auditor is the review of the system of internal control and internal check of the financial transition of the organization (1975) in his review of operation and record the internal auditor will be immediately concerned with the system of internal control and the internal check which runs a constituent part of it.

the recognition of a  difference of internal control and internal check is very  essential to understand the primary function of an internal auditor.  Internal control 9s often throught to only apply in terms of accounting practices and producers, but it include the basic for policies laid down by executive management and provide the means whereby management can be assured that such policies are being carried out. it can readily be seen that effective internal control becomes one of the pillars of successful management. One of the essentials is organizational planning coupled with well defined statement of duties and responsibilities internal control is not a result of the application of  abstract theories and principles rather an everlasting condition resulting from a variety of decision but many which are the decision of executive management itself.

QUALITIES OF AN AUDITOR

—-This article is not complete———–This article is not complete————

This article was extracted from a Project Research Work Topic

“AN ASSESSMENT OF THE IMPACT OF INTERNAL AUDIT FUNCTION IN STATE MINISTRIES

(A CASE STUDY OF ENUGU STATE MINISTRIES OF WORKS HOUSING AND EDUCATION)”

To purchase complete Project Materials, Pay the sum of N5, 000 to our bank accounts below:

BANK NAME: GUARANTY TRUST BANK (GTB)

ACCOUNT NAME:  CHIBUZOR TOCHI ONYEMENAM

ACCOUNT NUMBER: 0044056891

OR

BANK NAME: FIRST BANK PLC

ACCOUNT NAME:  CHIBUZOR TOCHI ONYEMENAM

ACCOUNT NUMBER: 3066880122

After paying the sum of N5, 000 into any of our bank accounts, send the below details to our email address: 07033378184 and email: articlesng@gmail.com

1.      Your Depositors Name

2.      Teller Number

3.      Amount Paid

4.      Project Topic

5.       Your Email Address

Send the above details to: 07033378184 or on/before 24hours of payment. We will send your complete project materials to your email.

For Inquiries call – 07033378184

Internal Audit – The Impact of Internal Audit Function in State Ministries

[simple-links category=”3189″]

 

 

Articlesng.com will only provide papers as a reference for your research. The papers ordered and produced should be used as a guide or framework for your own paper. It is the aim of Articlesng.com to only provide guidance by which the paper should be pursued. We are neither encouraging any form of plagiarism nor are we advocating the use of the papers produced herein for cheating.