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.