Get the complete project »
- The Complete Research Material is averagely 50 pages long and it is in Ms Word Format, it has 1-5 Chapters.
- Major Attributes are Abstract, All Chapters, Figures, Appendix, References.
- Study Level: BTech, BSc, BEng, BA, HND, ND or NCE.
- Full Access Fee: ₦4,000
Definition of Audit
Audit has been defined in various ways but with little variations. According to Benin (2001) in his dictionary of management, Vol. 2 defined audit as a critical examination and analysis of an activity by an independent person performed to check the efficiency of the activity and often to check security. This definition is however narrow.
The international encyclopedia of social sciences defined auditing as concerned with the independent verification of the statement of financial position and the results of operations of an entity.
In Penguin Dictionary of Commerce it was defined as “inspection of a set of books and or accounts by a person other than the one who prepared them (with the object of ascertaining whether or not the books are properly kept and or the accounts shows a true and fair view of the state of affairs of the organization at the data stated) followed by a report to the persons by whom the auditors were appointed.” (Greener, 2000)
However, the up to date definition being accepted by many professional bodies is the one defined by the consultative council of Accountancy bodies (CCAB).
According to the definition, an audit is the independent examination of and expression of opinion on the financial statements, of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevant statutory obligation. The statement adds that the responsibility for the preparation of the financial statements and the presentation of the information included there in rest with the management of the enterprise. The Auditor’s responsibility is to report on the financial statement as presented by management. Jim Ade notes that the main purpose of an audit is to show whether financial statement reflect true view of organization position.
The preparation of the accounts of local government is a very complex operation with differing orientations, legal systems and accounts and control systems. The examination of such account by independent expert trained in the assessment of financial information is of benefits to those who control and operate such local government as well as to the nation.
It is clear in all the definitions state above that what is important in this case is the independability, checking the verification and efficiency of the system, ascertaining whether the proper books of accounts are maintained not so as to show a true and fair view of the state of affair of the organization on which the auditing is built.
Though there is variation in language and choice of words used by the different authors, it is crystal clear that they are all saying the same thing.
- A Synopsis of Local Government Audit
In a series lecture by Jim Ade of the Esan West Local Government
Council, he noted that the study of local government audit is as
important as auditing in every other sector including the financial
sector of the economy. This is because local government being the
closest government institution to the people at the grassroots demand
adequate financial resources, which of properly controlled would benefit
the rural communities
Jim reports that in local government, there is a department referred to as finance and treasury department. This department is charge with the responsibility of ensuring that local government or public fund is well administered. This, it achieved by receiving fund, expending fund and properly accounting for it.
However, at a particular point in time an independent person known as an internal auditor checks to ensure that these functions (receiving funds, expending funds and accounting for them) are adequately performed
Local government audit therefore, is an examination of financial statement or records of the local government in order to established if they show a true and fair view.
- Qualities of an Auditor
- Independence: An auditor is expected to be an independent person to be able to function effectively. Independence enables an auditors to have an independent or unbiased opinion about the state of affair of local government
- Technical Competence: This is an ability to express an opinion in a logical manner. He should be able to analyze any financial situation. No matter how complex it is.
- Computer Literacy: An auditor is expected to be computer literate. He is expected to be aware of all the going on in the computer technology environment.
- Analytical Knowledge: As an auditor, you, are
expected to have a strong analytical skill. This involved explaining and
analyzing a situation in numerical terms. Source: (Jim Ade, 2012: EWLG
- The Objective of Local Government Audit
The objective of an audit is to detect irregularities or fraud. As
stated by the consultative council of accountancy bodies (CCAB) the
responsibility for the prevention and detection of irregularities and
fraud rests with the management who may obtain reasonable assurance that
this responsibility will be discharge by instituting an adequate system
of internal control.
The auditor’s duties do not requires him specifically to search for fraud unless required statute or the specific terms of the agreement. However, the auditor should recognized the possibility of material irregularities or fraud which could unless adequately disclose, distort the results or state of affairs shown by the financial statement therefore the conducting of an audit is itself can often discourage any attempt to institute, irregularities or fraud.
Furthermore, the detecting of fraud and errors and prevention of errors and fraud in the accounting system is what is considered the secondary objective of an audit.
The now almost notorious expression of Lopas, L.J. in the case of Kingston Cotton Mill Company Limited (1896) that the auditor “is a watch dog not a blood hound” is very obvious
When a statement of account is presented to government auditor, he will need to scrutinize the underlying documents such as receipts, payment vouchers, various ledgers, bank tellers, bank statements etc. He will also ask for explanation and information from the officers of the organization whose accounts he is auditing.
Besides, the auditor will need to examine the physical assets and the organization such as buildings, plants and machinery, motor vehicles, stores, the auditor in trying to satisfy himself as to the correctness or otherwise of the statement of the account he is examining.
His final report will be based on the opinion he has formed on this examination
Viewing the radical changes in Nigeria today where most Nigerians, including high placed government functionaries and officials do not see any need for judicious spending of public funds thus erroneously believing that they are gold mine from which to help themselves, move emphasis is now been placed on the treatment of the discovery of fraud as a primary objectives.
Okolo (1997) had added more colour to this fact by saying “it is my submission that the auditing which stipulates that the discovery of errors and fraud is not a primary objective of an audit is not applicable to the audit of public funds in Nigeria.
However, it has to be stated therefore that the auditor general (A.G) of the federation and the directors of audit of the various states of the federation are not only interested in the correctness of the financial statement, there are also very much interested in the prudence with which public funds are managed hence is of expenditure and sometimes queries as “unreasonable expenditure”.
The financial Memoranda has given credence to this by stating in chapter 40.2 that one of the objectives of the external auditor is to assisting in protecting the assets and interests of the local government by carrying out a continuous examination of activities in order to detect fraud, misappropriation, irregular expenditure and losses due waste, extravagance and maladministration.
Section 117 of the constitution of the federal republic of Nigeria provides the following
- There shall be a director of audit for each who shall be appointed in accordance with the provision of sec. 118 of this constitution
- The public accounts of a state and all office courts and authorities of the state, including persons and bodies established by law entrusted with the collection and administration of public moneys and assets shall be audited and reported on by the director of audit, and for that purpose, the director of audit or any person authorized by him in that behalf shall have access to all books, records, returns and other documents relating to these accounts.
- The director of audit shall submit his reports to the house of assembly of the state and the house shall cause the reports to be considered by a committee of the house responsible for public accounts.
- in the exercise of his functions under this constitution, the
director of audit shall not be subjected to the direction or control of
any other authority or person. (FRN, 1999).
- Types of Audit and its Application in Local Government
The range and dept of audit work undertaken in any given situation will depend upon the auditor’s owe assessment of the system which produces in the first place the records which he is required to audit. Since both the complexity and dependability of systems are almost infinitely variables, the length of time taken to conduction audit and the number of level of audit personnel to require to do so, are equally variable. It is possible to draw up the following broad classification given by Howard (2001)
- Complete or final audit
- Continuous audit
- Procedural audit
- Management audit
- Balance sheet audit
The clans of audit applicable to the local government accounts is a combination of final, complete audit and continuous audit. The former applied at the close of the financial year. Financial statements for that year one sent to Edo state director of audit through the principal auditor of the various local government areas. The relevant records such as the following will obtained from the council.
- Payment vouches
- Departmental vote expenditure account (DVE)
- Departmental vote revenue account (DVRA)
- Expenditure abstract
- Investment abstract
- Investment ledger
- Investment ledger
- Advances ledger
- Deposit ledger
- Bank statement tellers and cheques stamps
- Annual financial statement
- Contract register
You either get what you want or your money back. T&C Apply
You can find more project topics easily, just search
SIMILAR ACCOUNTING FINAL YEAR PROJECT RESEARCH TOPICS
» CHAPTER ONE INTRODUCTION 1.1 Background to the Study The sensitivity of Nigeria‟s petroleum industry is clearly reflected in its importance to the N...Continue Reading »
» Abstract The study examines the impact of accounting standard on financial reporting on Nigerian financial institutions. The broad objective of the st...Continue Reading »
3. BENEFIT OF BUDGETING AS A MANAGEMENT TOOL IN ORGANIZATION A CASE STUDY OF NIGERIA BOTTLING COMPANY LTD» ABSTRACTThe study examined the benefit of budgeting as a managerial tool in an organization, which focus on Nigeria Bottling Company Plc. The survey m...Continue Reading »
4. THE ROLE OF MODERN ACCOUNTING IN MASS MEDIA (A CASE STUDY OF FEDERAL RADIO CORPORATION NIGERIA (FRCN) KADUNA.» CHAPTER ONE 1.0 INTRODCUTION Accounting can be defined as an act recording classifying, summarizing and reporting of business transaction for preparat...Continue Reading »
» CHAPTER ONE INTRODUCTION 1.1 BACKGROUND TO THE STUDY In the past and even up till now accounting processes are done manually through the use of separa...Continue Reading »
» Abstract This study has been carried out critically analysis and the impact of effective public sector accounting on public fund management in Nigeria...Continue Reading »
7. EFFECT OF TREASURY SINGLE ACCOUNT ON THE PERFORMANCE OF NIGERIA BANKS (A CASE STUDY OF ZENITH BANK PLC)» CHAPTER ONE 1.0 INTRODUCTION 1.1 BACKGROUND OF STUDY The activities of treasury single account are mostly seen among the commercial banks in banking s...Continue Reading »
8. THE IMPACT OF MILLENIUM DEVELOPMENT GOALS (MDGS) ON THE STANDARD OF LIVING OF RURAL DWELLERS (A CASE STUDY OF IBESIKPO VILLAGE OF AKWA IBOM STATE)» Abstract The accountants the business and the economy are inseparable. They are mostly needed in resolving various conflicting investment decision, in...Continue Reading »
9. ASSESSMENT OF THE IMPACT OF INTERNAL CONTROLS ON FRAUD PREVENTION AND EFFECTIVE MANAGEMENT OF BUSINESS ORGANIZATIONS» (A STUDY OF NIGERIAN BOTTLING COMPANY PLC, UYO, AKWA IBOM STATE) ABSTRACT The research examine “Assessment of the Impact of Internal Controls on...Continue Reading »
10. COST ACCOUNTING AND MANAGEMENT ACCOUNTING AS A TOOL FOR PERFORMANCE EVALUATION IN MANUFACTURING COMPANY» CHAPTER ONE INTRODUCTION 1.1 BACKGROUND TO THE STUDY Cost accounting (CA), which measures and reports financial and non financial information related ...Continue Reading »