CHAPTER ONE INTRODUCTION
1.1 Background of the Study Government organization have played a greater part in the economic growth of any economy, especially in the Nigerian economy. The contributions they have made so far cannot be overemphasized because their utmost aims of establishment is to provide some vital or essential services to improve the social and economic well being of the people.
These government organizations are mainly being funded either by the federal or state government through their budgetary allocations made to them yearly and they can also obtain loans or overdraft from commercial bank as well as subvention from government. These funds are expected to be utilized effectively and efficiently. But in most practices they are being misappropriated or embezzled by some government officials. As a result of this mis-appropriation which has characterized most of the government organizations. Honestly and prudently managed. The audit is expect to show whether proper principles of accounts and audit ethics have been adhered to and that financial statements prepared give a true and fair view.
1.2 Statement of the Problem In any business Organization in which allocation and application of funds serves as a backbone for financial activities to be carried out the following are problems in which are bound to be encountered. 1. Embezzlement of fund by some government Officials 2. Failure to exercise due professional care and the appropriate level of professional skepticism. 3. Overreliance on inquiry as a form of audit evidence 4. Deficiency in confirming accounts receivable 5. Failure to recognize related party transactions and assuming internal control exist when they may not. These and other factors contribute to problems of auditing in government organization.
1.3 Purpose of the Study
The purpose of studying this topic is to examine the importance, problems and prospects of auditing in government institution. § To ascertain the problems encountered while auditing in government establishment. § To know if auditors exhibit enough professional competence in conduct of their work. § To know how effective auditing is in government establishment 1.4 Research Questions
This research work seeks to ask the following questions among others, deduced from the purpose of the study. § Are auditors being threatened or intimidated during their audit work. § Are auditors being faced with some problems during their audit work. § Are vital documents needed for the audit of the organization being held from the auditors 1.5 Research Hypothesis Based on the purpose, and research questions the following hypothesis are put forward.
Ho Financial reports submitted are not in consonance with the transactions carried out by the government establishment HI Financial report submitted are in consonance with the transactions carried out by the government establishment. Ho Treats and intimidation do not positively affect the quality of auditors work in government establishment.
HI Treat and intimidation positively affect the quality of auditors work in government establishment. Ho Poor professional conducts by auditors do not affect the quality of work done by auditor in government establishment.
HI Poor Professional conduct by auditors affects the quality of work done by auditors in government establishments. 1.6 Significance of the study Where audit principles and procedures are carried out in government organizations the following benefits are derived of which these work will be beneficial to the following people and establishments: § Government good audit work will prevent, expose fraud, errors and irregularities in government establishment. § Auditors: will benefit by knowing the challenges facing them in their audit work and thereafter the prospects. § Banks; will also benefit because it will give them insight on how to handle audit work successfully. § Students and researchers will benefit by gaining knowledge on the audit challenges to banks and the prospects.
1.7 Scope and limitation of the study This project would cover arrears such as audit principle(s) and procedures giving as in depth analysis on how audit work is carried out in government organizations. Attempts have been made by the researcher to discuss in depth the various short comings behind this operational framework of auditing in government organization and also self investigation carried out. Part of the constraint encountered by the researcher and limitations are as follows.
§ Cost of carrying out the research § Short duration of time limit dedicated on the project § Distance and financial constraint. § Restriction placed upon by some organization to have access to some vital documents. § Secrecy maintained by some government officials by not revealing certain information which they term as “Keep government secrets secret”. 1.8 Definition of terms Fraud: Is a mis-presentation of data with the intention to theft which is dishonest act involving the theft of assets and the falsification of accounting records and financial statements (Akpankpan, 2000.126)
Embezzlement: The fraudulent appropriation of property lawfully in one‟s custody, (Kohther, 1970:173) Auditing or Audit: Is concerned with an independent examination of financial statements and accounting records by an independent certified or chartered accountant and expression of an opinion by the public accountant on the financial statements of an organization stating whether the finance; al statements present fairly by the financial position of the firm concerning the period covered by the financial statement.
Auditor: An auditor is the qualified accountant who is professionally licensed to audit or examination financial statements or report of business or non-business organizations.