ABSTRACT

 

This study is based on the impact of Auditing in Government Parastatals using Enugu State Agricultural Development Programme; located at Okpara Avenue as a study guide. The entire work is divided into 5 chapters and the data for the study was collected using both primary and secondary sources, questionnaires, textbook literally material and journals respectively. The population of the study is 150-whole the sample size was derived by the use of YARO YAMANI 1964 formular and it gave 109. †††††††††† The data collected were presented in tables using simple percentage and averages; then the hypothesis of the study was tested using chi-square formular. The finding of the study was that auditing has great impact on the activities of government parastatals; through checkmating irregularities and that whether the management should rely on the report generated by the auditor; finally what is management perception on the role of the auditor in the prevention and detection of fraud in a government parastatals. In the end, the researcher made some useful recommendation to the parastatals; views that will encourage the full utilization of auditing and auditors as tools in their activities and actualization of accountability in the parastatals.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHAPTER ONE

1.0††††† INTRODUCTION

1.1††††† BACK GROUND OF THE STUDY.

††††††††††† The concept of Auditing dates back from ages. Auditing has been with man since ages. In the olden days great land lord gave their land to their stewards, serves to manage and tender account to them. Group of people over appointed by their landowners to ensure that revenue wereproperly accounted for . in order words, this group of people are known as auditors..

††††††††††† Auditing particular task is to provide information to managers, shareholders and inventors on the outcome of turnover rate in an organization.

††††††††††† Auditing is a broad base subject drawing upon relevant laws and cases, financial account, taxation, costing and management accounting. It could be reasonably assumed that if there is a sound auditing department in an organization or parastatals is bound to financially perform well. If such information gotten is effectively and efficiently utilized.

††††††††††† The extent of which the above assumption of key is true using the Nigeria parastatals as the subject of the study.

††††††††††† It is my ultimate desire as researcher that at the end of this thesis I should be able to show the importance of Auditing to government parastatals. Hence auditing is one key to the success of any parastatals setup.

††††††††††† WHAT IS AUDITING

††††††††††† According to Okorie Onovoís book(2001) he view auditing as the expression of an opinion of the financial statement of an organization of parastatals within a recording pineapple.

††††††††††† The internal auditing standard (I.A.S) August 1997 define auditing as independent examination of an enterprises by an appointed auditors in pursuance of that appointment and in camphene with any relevant statutory obligation.

††††††††††† While in Nweke And Unegbu (2001) view auditing to be form of stewardship where the messenger is expected to account for what was left under him by the shareholders so as to know if it actually increase or reduced and if they were the way they gave it to them just as that case in the holy book of Mathew chapter 25:14-30.

††††††††††† Many Director and manager are better and stronger when they have good ideas of the actual work of auditing in what have been under their care. Their performance and reward are determined by the correctness of the shareholders during the annual meeting of the organization or parastatals.

††††††††††† It is however assume in this thesis that an effective auditing system that is the only high cause of financial performance parastatals.

††††††††††† Auditing particular task is to provide information to manager, shareholders and investors on the outcome of turn overrate in an organization.

 

1.2††††† STATEMENT OF PROBLEM.

††††††††††† So many manager have failed to recognized the effort of Auditing in the financial performance and as a result, it has led them to poor planning control and decision making.

 

IMPLICATION.

ĺ   It retard the growth of the parastatals.

ĺ   It leads to loss in share holders funds.

ĺ   It will hinder corporation objective of the company.

ĺ   The reputation of the company will be at stake.

ĺ   The loss of public confidence in the company and shifting of interest to other company.

††††††††††† It is well known fact that others of the parastatals (ie ENADEP) are entrusted with the management of both material and human resources of their establishment and in most cases, these officers are not brought under thorough control or questions, the ultimate consequence of this is that much of the resource are indiscriminately mismanaged. Equally some accountant and key personnel. In most parastatals and companies do not resist the temptation of colliding with other workers to embezzle their organization fund to the detriment of the masses and owners of business or even the shareholders. Also some parastatals do not seem to have an audit department or engage the service of the external auditors or where such a unit exist, they allow it to exist only in name as a mere compliance to the statutory requirement an audit department of such standard will not make or have any impact as regard to internal control. This statement of affair from investigation is usually deliberate attempt by management to execute itís exploitation, plans, without any hindrance.

††††††††††† Another aspect of this is lack of adequate regulatory standards. In Nigeria regarding the duties, right responsibility and qualifications of Auditors.

††††††††††† However, am more interested in the impact which a proper auditing system will achieve under these conditions in government parastatals and other organization thus the proper care is taken towards auditing, the purpose of thesis parastatal should be achieved, and the fear of the auditor or will befor every section department and staff ofthe management.

 

1.3††††† PURPOSE OF THE STUDY

††††††††††† The main purpose of this study among others include:

To determined the function which an auditing department can perform in government parastatals or other organizations.

To ascertain how far these functions have contributed in the overall performance of the parastatals.

To find out whether an auditing system exist within those parastatals or organizations.

To find out the qualification of those who control the auditing units where it exists.

To provides a basic understanding of auditing and itís procedures.

 

1.4††††† SIGNIFICANCE OF THE STUDY.

††††††††††† It is the view of the researchers that this study will be relevant to the government parastatals, society at large and academic encouragement. Also it will help highlight the impact of auditing in an organization or establishment, and this can be seen in the following ways negatively and positively

††††††††††† Auditing department could be seen as the watch dogĒ to the management of an organization on the ground that it will contribute to the successful and timely implementation of the management policies as well as safeguarding asset and ensuring financial accountability of the employee in an organization.

††††††††††† It works as grease to the effectiveness of the internal control system there by enhancing efficiency and adherence to the laid down rules.

††††††††††† This study will also make it clear to all, that auditing has control and impact in the effectiveness of internal control and achievement of financial accountability of all the staff of the organization. More so,the activities ofauditing department encompasses all segments of the organizations, management will have the devastating effect on the generality of the program and the entire organization in general.

 

1.5††††† RESEARCH QUESTIONS.

Based on the purpose of the study, the following questions are raised to provide a guide and solution to the research problems.

        i.            What is the impact of auditing in government†† parastatals.

      ii.            Do the management rely heavily on the reports generated by the auditory?

    iii.            What is the management perception on the role of the auditor in the prevention and detectingof fraud and error in the parastatals.

 

1.6††††† STATEMENT OF HYPOTHESIS.

††††††††††† In carrying out this research work these conceptual statement are made to serve as a guide on which the work will be encored.

I†††††††††† H0 : ††† Auditing has no impact in government parastatals

††††††††††† H0†††† †† Auditing has an impact in government parastatals.

Ii††††††††† H0 :††††† The management do not rely on the report generated by

††††††††††††††††††††††† auditor.

††††††††††† H0††††††† The management do rely on the report generated by auditor.

iii†††††††††††††††††††††† H0††††† The management perception on the role of an auditor ††has not helped in the prevention and detection of fraud and error.

 

1.7††††† SCOPE AND LIMITATION OF STUDY

††††††††††† In view of the financial consequence of this study and time constraint, this study have been restricted to the case study area here in Enugu state metropolis, various published and unpublished literatures test as well as other primary source of information should be used in gathering wanted data.

 

1.8††††† DEFINITION OF TERMS.

††††††††††† The researcher find it worthy to define some important terms in the research work for a better understanding of their meaning and the context in which they are applied in the work.

 

I†††††††††† AUDITING

††††††††††† This is an improved calling by an organization to investigate on the totality of stock remaining and financial statement prepared by the company accountants so as to known whether or not the organization is doing well.

 

 

 

 

II††††††††† SHARE HOLDER

††††††††††† These are the owners of the parastatals ( major contributors) who contribute their quota towards the up keep of an organization or starting up the parastatal

 

III††††††† EXTERNAL AUDITOR

††††††††††† This is the invited auditor who is elected by the share holders so as to express His view about the account carried out by the internal accountant or the company or parastatalís telling them that the account show a free and fair view.

 

IV††††††† INTERNAL AUDITOR

††††††††††† This is the company staff (Accountant) who is elected by the management toward to investigate and present the raw view of the statement of account of the company or organization and he can be seen as an auditor within the management.

 

 

1.9††††† HISTORICAL BACKGROUND OF THE STUDY

††††††††††† Following the success of earlier Agricultural development projects in some states of the federation, the federal government with the assistance of the international bank of reconstruction and development (IBRD), decided the extent the strategy of agricultural Development Project (ADP) for integral oral development to all part of the country, until the first generation of (ADP), the multi- states Agricultural Development Project (MSADP) are phased wide coverage but in contracts with the earlier state build (ADPS) the MSADPS are phase in their operations. The first set of such phase programmes covered ANAMBRA,BENUE,PLATEAU IMO BENDEL, CROSS RIVER,A AND OGUN STATES collectively referred to as multi-state ADPI Anambra state ADP (ANADEP)now (ENADP) has completed projects first year if life. The sponsor of this project and indeed, the general public are interested in knowing how far the project has fared.

††††††††††† When arrangement were made for the actual take off the project and the project year on, 1986. the first portion and the repot traced the need for conceiving special policies and programmes to boast food production in Nigeria.

††††††††††† As part of government rural development strategy, the Anambra state of Agricultural Development Project which is now(ENADP) was in angulated on 5th August 1985. itís aim is to assist the small scale farmer in the state, increase food production, there by raising his income and standard of living.

††††††††††† An integrated rural development approach was adopted to reach the farmer in his locations this approach included an improved and revitalized agricultural extension, a commercialized input supply system, sponsoring andencouragement of farm produceas well as rehabilitation, spot improvement and maintenance of rural feeder road and provision of rural water supply.

††††††††††† The total funds received so far (December 1986) in the project is N4.13 million of this amount. The sum of 3.86 million was contributed by the federal government and state government and balance was generated within the projects the total project life is 10yrs, to be implemented in three phases.

††††††††††† The first phase of four years duration from 1980 to 1989 is established to cost 38.7 million. The international bank for reconstruction and development (IBRD) federal government and Anambra state government now Enugu state are cooperate of the project.

††††††††††† The world banks contribution is expected when the project and loan agreement becomes effective. The source of internally generated revenue were mainly from the saw of fertilizer etc the expenditure at N1.84 million.

††††††††††† The agricultural sector has the fundamental role of providing food in adequate quantity and quality supply industrial raw materials and earning foreign exchange through exports. Contemporary agriculture in Nigeria is innate by small holder farmers using traditional methods. The agricultural sector using known to account for 20% of gross domestic product (GDP) and employs about 60% of the labor force. Agricultural performance in the last few decades has been undermined by disincentives created by factor price distortion ushered in by the oil boom in consequences the agricultural sector lost a good number of laborto other more lucrative sector of the economy with the resultant decline in agricultural exports. Nigeria became an importer of both food items and raw material. The cumulative effect of the situation is that the agricultural sector of the economy has failed to perform itís traditional function effectively to meet this crises both federal and state government enunciated several policies and embarked on a variety of agricultural project meant to improve the capacity of the sector to meet itís obligations effectively.

††††††††††† Agricultural development programme is aimed at increasing agricultural production and improving rural condition of the people.. the programme was conceived in 1972, while the first projects (Funtua) in Kaduna, Gusaro in Sokoto and Gombe in Bauchi) commence operation in 1995 the success of these first ADPS led the federal government to accord the ADP idea quick recognition as a prime contributors to incremental food production. It thus became the policy of the government to extend ADP strategy to all state of the federation.

††††††††††† Anambra state ADP now Enugu wide ADP to be implemented in stages or phases. The strategy of the first phase include the precision of a programmes of adaptive research. The research is to be conducted on the farmers. Farmer based on the step wise approach, proceeded by diagnostic surveys of typical farming systems service to be provided to farmers would be through a reorganized agricultural extension system better use of fertilizer and improved planting materials.

 

PROJECT AREA : location: Anambra state now Enugu state ADP has an area of approximately 6,727.15g km with an estimated population of 52,733,560. the estimate number of farm families is 1023,270 according to the agricultural projects monitoring evaluation and planning unit (APMEPU) Kaduna.

††††††††††† Geographic feature the state lies partially within the semitropical rain forest belt of southern Nigeria. It spreads a north earth direction with ti physical features and vegetable changing as gradually from the tropical forest to open wood land and then to savanna land as it approached and itís northern boundary with Benue state.

 

FARMING SYSTEM

††††††††††† The prevailing farming system of the state is shifting cultivation with a bush fallow to restore soil fertility. Burning of slashed fallow growth is used for rapid recycling of soil nutrient.


REFERENCE

Onyia, A.C and Oleka D.C (2000),Business Finance Fundamental Approach.

Chukwuemeka, E.E.O(2002) Research Method and Thesis Writing, a Multi-Discipline Approach.

Nweke, M.M and Unegu O.(2001) Introduction to Auditing for Undergraduate.

Nwadighoha, C.E (2003) Guidance for Accounting Research and Project Writing

Okorie, O(2001) Understanding practical Auditing and Investigation.



 

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