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As we move through the 1990’s and beyond the socio-economic setting of government; business are different from what they were not too long ago. The social and economic changes have posed serious challenges to business in general and to government in particular. Government business has advanced beyond mere maintenance of law and order, hence governmental intervention in economic matters. Therefore it is apparent that proper attention be given to the accounting system in government. Having acknowledged these developments, this research work was conducted in order to determine the impact which auditing could create on accounting system of government with the attendant effect on the management of public funds in Akwa Ibom State. The main purpose of this research work has been to provide information and create awareness of responsibilities in the minds of accounting officers in government on the need for proper accounting and the effect of audit reports on public officers. This works may also serve as first hand information source for further research work and for people who are newly introduced into the field of government accounting and auditing. In the preliminary research work, questionnaires were used for collecting data followed by personal interviews and library research work analyzing the data, statistical devices were used in testing the hypotheses and interpreting the results thereof. These statistical devices include population, proportion z-distribution and Chi-squared. The finding of this research work revealed that much is required of accounting officers in government for the proper maintenance of accounting records and adherence to financial institutions. The study also revealed that, the office of the state, Auditor – General and the departments of Audit are not adequately staffed and properly organized.

In conclusion, this researcher recommends proper supervision of accounting staff as well as employing qualified accountants to work in the State Department of Audit             




        Every business has an accounting system by which transactions are processed and records of those transactions are maintained that business decisions of many kinds are based on, at least in part, on accounting data.

        These accounting data are further drawn and presented in the form of financial statement which are required by various users for decision making.

The decision may be for different purposes, and may vary from one user to another.

Meigs (1984), stated “for control purposes, the system of internal accounting control provides assurance to management on the dependability of the financial statement used in making decisions”. Hence there is a need for auditing financial statements.

Auditing therefore is prepared to determining whether persons in positions of fiscal responsibility in government and commerce are acting and reporting in an honest manner.

        Auditing is one of the numerous services provided by the Accounting profession and may be performed for several purposes. According to Attwood and Stein (1986), “audit is defined as an independent examination of an expression of opinion of the financial statements of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevant statutory obligations”.

        Also Grinakar and Barr (1965) defines audit as a critical investigation to arrive at a sound conclusion about accounting for the financial and operating aspect of an economic organization.

It is further explained that critical investigation implies an orderly accumulation of evidence, and sound conclusions imply interpretation of the accumulated evidence by a competent auditor. While Davidson (1968) explain that auditing is concerned with the independent verification of the results of operations of an entity.

        From the above definitions and explanation, it could be adduced that auditing is an independent appraisal activity within an organization.

There are basically four types of audit, namely:

(1)        Statutory audit

(2)        Private audit

(3)        Internal audit

(4)        Management audit

The focus of this research work is on public sector of Akwa Ibom State. It is the intension of the researcher to research into the impact that audit could create on the Government Accounting system and management of public funds. In the public sector there are two units of audits:

-              The statutory department of audit

-              The internal audit unit

Statutory audit is a constitutional creation established under section 83 and 123 of the constitution of the Federal Republic of Nigeria 1989 for the federal and state public services. On the other hand a non-statutory or internal audit unit functions as a service to management. It is an element in internal control. The statutory Department of audit functions as an external auditor to the Government.


        Accounting systems and procedures in government are complex and indispensable, it emphasizes legal form over economic substance. This is necessitated by the characteristics of government entities especially the impact of legislative process and stewardship for resources.

For the purpose of control, audit is conducted to determine whether persons in position of fiscal responsibility in government are acting and reporting in an honest manner. Hence this study was undertaken in order to determine the impact that auditing could create on government accounting system and also it impact on management of public funds in Akwa Ibom State.

The focus point of the study was on the office of the Auditor- General. The Department of Audit was also brought into focus being a statutory unit with powers to investigate or inquire into the management of public funds.

1.2   OBJECTIVES OF THE STUDY             

        The objectives of this study include the following:

(i) To examine how auditing could affect the pattern of spending public funds by public officers.

(ii)        To determine the extent to which auditing could be used to influence the behaviour of public officers on management of public funds.

(iii)      To inquire into how public officers react to audit reports and queries from department of audit of the state.

(iv)       To find out how auditing could serve as a check on government accounting system by which public funds could be safeguarded form waste, fraud and in-efficient management.

(v)         Ascertain how audit could be used as a deterrent and moral effect on public officers.

1.3   SIGNIFICANCE OF THE STUDY                 

        This study will be significant in the following area:

i)            It will aid the researcher in completion of his programme B.SC Accounting

ii)          To the universities, students and other researchers who might venture into this area of study.

iii)        To the department of audit and office  of the state, Auditor –General in particular by assessing and evaluating the performance of their functions as regards their accounting system of government.

iv)         To help policy makes in decision making process financially.    


(i)     Does auditing affect the pattern of spending of public funds by public officers.

(ii)    To what extend does auditing excess influence the behaviour of public officers on management of public funds.

(iii)   What is the reaction of public officers to audit reports and queries from the state department of Audit.     

(iv)   Could auditing serve as a check on government accounting system by which public funds could be safeguarded from waste, fraud and inefficient in managements.

(v)    Does auditing has effect on the morals of public officers.


        In the analysis of this study, the following guiding hypotheses were formulated based on the purpose of the study and are given below. They are directly related to the objectives and problems of this work. These hypotheses have been selected with a view to making concrete statements on the impact of Auditing on government accounting system. The reference point is OSAG. These hypotheses are:

1      (a)    Null (HQ) Hypothesis

Auditing has created significant impact on government accounting system.

(b)    Alternative (Hi) Hypothesis

Auditing has created no significant impact on government accounting system.

2.     (a)    Null (HQ) Hypothesis

Auditing can influence the behaviour of public officers on management of public funds 

        (b)    Alternative (Hi) Hypothesis

Auditing cannot influence the behvaiour of public officers on management of public funds.

3.     (a)    Null (HQ) Hypothesis

Audit queries and reports are of significant effect to public officers. 

(b)    Alternative (Hi) Hypothesis

Audit queries and reports are of no significant effect to public officers.


        The scope of the study was on the impact of Auditing on government accounting systems in general with particular reference to the office of the state, Auditor – General. This research will concentrate on the following are:     

(i)          Explain the system of government accounting

(ii)        Define what an audit is and discuss types of audit

(iii)      Legal frame work

(iv)       Duties of an auditor

(v)         Types of audit report

(vi)       Audit as an element of internal control

(vii)     Evaluating the system

It is a common feature in a research study of this nature to have certain constraints that may try to work against the accuracy of the study. Such factors include among others my position as a self sponsored student, finance, time; uncooperative altitude of some staff of the ministry of finance and audit department in returning the questionnaire on time coupled with the above factors was the high cost of materials for this project.

Finally because of cost involved and non-availability of enough tools, the research was limited to the use of statistical tools and mathematical tables in the analysis and interpretation of the data.


The following terms as used in this research work are defined of thus:-


        According to Parker (1985) audit is defined as the mechanism with the process of accountability whereby the performance of those in control of the resources of an organization is checked or monitored by or on behalf of interested parties.


Webster dictionary of advanced study defines impact as a force exerted by one object against another, strong impression or effect.

Operational Audit

        The regular and independent appraisal by a staff internal auditors of the accounting, financial and other operations of an enterprise (Koontz O’ Donnel and Welthrich 1980).


        According to Funk and Wagnall’s Dictionary (1964) evidence is defined as “that which is submitted to someone competent to evaluate it properly as a means of ascertaining the truth of any alleged matter of fact under investigation”.


        Opinion is defined as “a belief or judgment stronger than mere impression but less strong than positive knowledge” Funk and Wagnall’s dictionary (1964).

Internal Control

        The whole system of controls, financial and other wise established by the management in order to carry on the business of the enterprise in an orderly and efficient manner, ensure adherence to management policies, safeguard the assets and secure as far as possible the completeness and accuracy of the records (Woold, 1986).

Decision Making

The selection from among alternatives of a course of action, a rational selection of a course of action (Knontz, D’ Donnel and Welhrich, 1980).

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