In Nigeria, successive governments, since independence have set up autonomous organizations with legal independence and powers, having the initiative of private enterprises to carry on developmental activities of commercial or industrial nature. Thus, the emergence of Ahmadu Bello University teaching Hospitals with headquarters in Samaru Zaria is charged with the responsibility of accounting properly all financial activities undertaken by its management.
The need to institute both internal and external audit systems within organizations for efficient and effective financial monitoring, management and control was further necessitated by some prevalent economic pressure like the recession in the privatization and commercialization of most of government owned organizations, keen competition in the Nigerian business environment, the Structural Adjustment Programme (SAP), Industrial unrest and the renewed call by the government through War Against Indiscipline and Corruption (WAI-C) foir financial prudence, action and accountability by government functions.
Internal auditing is of fundamental importance as an effective means of ensuring the reliability of internal records for information and use, through proper internal control systems within an organization without which such records will present chaos and the whole system may fail to succeed for lack of orderliness, accuracy, reliability of information, safety of its assets and the general security of records.
Effective internal control is necessary to be able to determine whether all transactions have been reflected within accounting record. It is therefore, important to recognize that the auditor concerns himself with internal control throughout the clients organization and not merely within the finance and supplies department alone. He ought to understand the organizational operations as a whole, ascertain and evaluate the whole system of control operating within the organizations. An important aspect about controls is the fat that it has to be timely otherwise the whole exercise will be futile.
The internal auditor helps management to achieve organizational objectives effectively through his report. Such reports have to contain express opinion of the auditor on the areas he undertakes to audit. The nature and extent of the internal control system and internal auditing, appropriate to anyone organization is the management’s responsibility and depends on the organizations typology and geographical distribution.
The importance of internal control for internal audit purposes will be appreciated most in an organization like the Ahmadu Bello University Teaching Hospitals, whose activities are spread over various branches at different locations both within and outside Kaduna State.