1.0 Chapter one

1.1 Background to the study

Financial auditing systems are among the many regulatory and monitoring tools that have become necessary due to the extent of public sector fraud and financial misappropriation in many government agencies (Hazaea, et al 2020). Richard (2019) Financial auditing systems are among the many regulatory and monitoring tools that have become necessary due to the extent of public sector fraud and financial misappropriation in many government agencies. Tapang and Ibiam (2019) maintained that the cases of bribery, misappropriation of public funds and theft of government properties have been recorded to be in the order of the day in public sector entities. The authors further stated that public sector audit becomes a method of monitoring and control of the activities of public sector entities. According to Financial Audit Manual (2015), public sector audit which consists of financial audit, regulatory audit and compliance audit are the audit of the financial statements, policies, programmes and operations of public sector organization whereby the auditor expresses an opinion as to whether the financial statements fairly present the financial position and the results of the entity's operation in line with the legal and financial reporting frameworks.

Eke (2018) said that a financial audit entails examining supporting documentation for data in accounting records and financial statements that management has access to for decision-making. Transactions and events involving income or sales, cash, asset acquisition, expenditure, financial capital receipts and payments, staff and payroll, and external financial reporting are the main focus of public sector audits. The methodical process of impartially gathering and assessing pertinent and trustworthy evidence to ascertain whether data or real circumstances align with predetermined standards is known as public sector auditing. It is basically in providing information and independent and objective examination of the stewardship and performance of government policies, programmes or operations, to legislatures, oversight bodies, those charged with governance and the public. The need for auditing of financial statements evolved basically as a result of the growing complexity in business. The separation of ownership from management particularly created a need for verification and authentication of results of operations presented in financial statements produced by management who were entrusted with resources by a third party independent of management itself to express an opinion on their truth and fair state (Gupta, 2015). Furthermore, Munene, et al, (2016), added that an effective auditing function can detect and disclose earnings management and other types of misconduct by business managers or controlling shareholders. The main purpose of audit of a financial statement is to provide an independent examination of the financial statements in accordance with generally accepted accounting standards. Notwithstanding the need to maintain a good relationship with the audited company, auditing firms must provide independent auditing services since the financial statements contain substantial economic consequences in decision making by stakeholders. In addition to producing opinions, financial audits also uncover legal and regulatory violations and flaws in the internal control framework. A reference for evaluating an entity's efficacy and efficiency in its financial management could be this. This can serve as a guide for evaluating an organization's efficacy and efficiency in managing its finances as well as the performance of public sector organisations in carrying out the tasks of distribution, stabilisation, and allocation in the administration of public funds.. The financial performance of public sector organisations is influenced by the continuing improvement of the audit opinion of entities that auditors examine, which shows a rise in financial statement disclosure, an improvement in the internal control system, and a decline in non-compliance with regulatory requirements. According to Munene, et al, (2016), Public sector auditors are required to examine and assess the organization's internal control systems, which, when robust, aid in preventing major misstatements in financial statements. A financial audit that examines and assesses the internal control system and looks for financial statement fraud can be used to conduct this audit of public sector organisations. . Zinyama (2019) claimed that the purpose of a public sector audit is to verify that financial control and accounting systems are effective and functioning correctly, and that financial transactions have been appropriately approved and recorded. Kiabel (2012) observed that as accounting and control procedures serve as a strong check on any departures from established goals and policies, they are thought to be essential to the performance of corporate entities. According to the author, this implies that a company that implements a suitable and sufficient system of accounting controls is probably going to fare better financially than those who don't. Similarly, Bejide (2016), said that an efficient public sector audit helps to maximise exposure to potential losses from poorly protected assets, cut down on overhead, and find methods to increase efficiency—all of which can have a big impact on the bottom line. There is proof that Nigeria's governmental sector lacks adequate accountability. To accomplish the efficient control and management of public finances, this necessitates a thorough and comprehensive audit as well as the efficient operation of defined policies, processes, and government activities. One way to determine the actual financial status of government organisations is through public sector audits. Public sector auditing plays a crucial function, yet accountability in the public sector has not been sufficiently demonstrated. Government has invested huge amounts of financial and non-financial resources in the public sector organizations in Nigeria for the purpose of achieving financial accountability and performance. Regrettably, misappropriation, misallocation and embezzlement of funds are still rearing its ugly heads in public sector organizations. It to this the study centers on Auditing As A Strategic Approach To Ensuring Accountability And Transparency In Nigeria Public Governance System

1.2 STATEMENT OF THE PROBLEM

In this nation's history, there has never been much discussion on the uproar of the unbalanced relationship between the electorate and the elected leaders. People's mistrust of public officials, rising expectations of their duties, and the elusive mismatch between accountability and transparency are just a few of the numerous issues plaguing Nigeria's citizens and public office holders when it comes to transparency and accountability. However, another is the incapacity to support the majority of publicly voted monies with tangible economic facts. Ironically, the proportion of research that support accountability and openness through auditing tools and have evidence that supports the aforementioned observations is far higher than the contrary. For instance, Hanskamp-Sebregts, et al. (2020), Shbeilat (2019), Ozuomba (2019), Ibironke (2019), Adedeji et al (2018), Ogundana et al (2017) are among the authors who have summarised the important connection between accountability, transparency, and the significance of public sector audit. Why is there still so much mistrust between elected public officials and the general public over the overall financial and performance stewardship delivery since the literature has established that auditing is a useful tool for ensuring accountability and transparency in the public sector The phenomenon that this study aims to investigate in Nigeria is guided by this central question.

1.3 Objectives of the study

The main objective of the study is to examine Auditing as a Strategic Approach to Ensuring Accountability and Transparency in Nigeria Public Governance System. The specific objectives are as follows:

i)To examine the impact of internal auditing on financial transparency in Nigeria public governance system

ii) To examine impact of auditing on fraud prevention and control in public sector organizations

iii) To analyze auditing as a tool to ensuring accountability In Nigeria Public Governance System

1.4 RESEARCH QUESTIONS

i)what is the impact of internal auditing on financial transparency in Nigeria public governance system

ii) what is impact of auditing on fraud prevention and control in public sector organizations

iii) how has auditing as a tool to ensuring accountability  helped In  improving Nigeria Public Governance System?

1.5 Hypotheses

Ho1: there is an impact of on Accountability In Nigeria Public Governance System and Ho2: there is relationship between Auditing And Transparency In Nigeria Public Governance System

1.6 SIGNIFICANCE OF THE STUDY

This study will further shed more light to this critical public interest by expanding views on  Auditing As A Strategic Approach To Ensuring Accountability And Transparency In Nigeria Public Governance System via publishing of the outcome in this research.

In addition, Auditors will benefit from the results of this study which can inform them on how to design better and effective audit plan for their clients. Hence, findings of this study will contribute to knowledge in this area and expand literature. 

1.7Scope of the Study

As the study is centered on the Auditing as a Strategic Approach to Ensuring Accountability and Transparency in Nigeria Public Governance System.

1.8 Limitation of the Study

The researcher in the course of carrying out the research was faced with the following problems and constraints.

(a) Time factor: Time shortage posed serious challenges, since it was indeed very short considering the enormity of the research work.

b)Lack of information and data due to unavailability of materials and other vital information. Libraries are either out of stock or scanty in their content of relevant materials.

c)Financial problem was also a deterrent in carrying out the research since the available fund was not enough to sustain the vast research proposals, it was also a challenge in that regard.

1.9 OPERATIONAL DEFINITION OF TERMS

Audit: Audit can be define as the independent examination of a financial statement and expression of opinion on the financial statement of enterprise by an appointed auditor in pursuance of that appointed and in compliance with any relevant statutory obligation.

Internal Auditing: "Internal auditing has to do with the independent examination of the books of account so as to ascertain whether the books of accounts are in agreement with the organization transaction.

Private sector: Private sector includes the part of the economy that is fully controlled and managed and financed by private individuals.