The study tries to examine the impact of regular audit to
the viability and organizational effectiveness of commercial banks in Nigeria,
a study of selected banks. In this study however, we carried out (worth with
the housing banks).
Union Bank of Nigeria plc.First Bank of Nigeria plc.United
Bank for Africa (UBA). However, the work went in depth to evaluate the benefits
when accrue to those commercial bank as a result of good audit and internal
control system. In order to arrive at a conclusion on the study I carried out
an empirical survey and library research, questionnaires were administered
which so out of 100 were returned.
The information collected was tabulate using percentage
system for relevant facts of the study; it was divided into five chapters. To
facilitate the work, three hypothesis were tested using the chi-scale are
method( x2) and the following findings and or results were obtained.
1. The regular auditing of the accounts of commercial banks
contributes to its viability and organization.
2. Regular auditing ensures that proper internal control is
maintained in banks for efficient management or resources.
3. Auditing maintains probity and accountability among the
management and staff of accountability among the management and staff of
business enterprises, which is necessary for business growth. From the study,
we were able to make some of the following recommendations.
The director of banks are to take reasonable steps to
safeguard the assets of the bank, to prevent and direct fraud and other
That contemporary internal auditing should provide a
constructive source to all branches of management that auditing should report
to members (shareholders) if the matter contained in the directors’ report is
inconsistent with the financial statement.
1.1 BACKGROUND OF THE STUDY
High performing organization brings Joy to its shareholders
stakeholders and directors. Falling organization brings heartache, hypertension
and death to all those associated with it.
In any case there
should be deaths and survivors in an endeavor be it a game, business or war.
Osuagwu et al(1995) have aptly noted that the desire of man
will always remain to win, to perform and be praised be among survivors and
rejoice with the living The world is full of intrigues, political activity,
competition, and stress and turbulent. The business community is not an
exception that art of testing and checking of an organization accounting and
financial records to see whether otherwise known as “Auditing is a corn age
from a Latin word Audire” which means to hear.
It is an offshoot accounting, which was believed to have
originated in the Italian cities far back in the 13th and 14th centuries credit
for earlier words is not complete without mentioning such notable person as
Luca Pacioli a Franciscan mathematician Auditing from its beginning had an
undertone of internal control Woolf(1982) defined internal control system as
the whole system of controls financial and wise established by a management in
orderly to carry on the business of the enterprise in an orderly and efficient
manner ensure adherence to management policies, safeguard assets and secure as
far as possible completeness and accuracy of the record.
According to Davidson etal(1986:61) the goals of any firm
are the targets or end result towards which the energies of the firm are the
means for achieving those goals. The details in which goals and strategies are
stated vary among firms some firms prefer to state goals and strategies in
general term only for instance a firm might express its goals as be more
profitable than our competitions. Its strategy might be to mechanize produce as
a cost lower than its competitors.
Therefore, all levels of management requires information on
which to base it decision to organize, to plan and to control while timing is
important other factor such as competence accuracy and relevance are equally
important in assessing the value of information to the organization.
Johnson(1957) has stated clearly that the quality of
management information is directly related to its timing, but this is linked to
the particular situation give rise to the need for such information.
1.2 STATEMENT OF THE PROBLEM
Auditors role in both the private and public emphasized the
main duty of an auditor is to report to the members or shareholder on the
accounts examined by him and on every balance sheet and every profit and loss
account and all group account laid before the company in a general meeting
during his tensure of office the auditors must report positively that is in his
The accounts give true and fair view of the company’s
account and of its profit and loss accounts.
Complying with requirements of the company’sAllied matters
Decree, 1990.If the auditor is not satisfied on the above points. It is the
duty to qualify his reports.
Most directors found quit of fraud embezzlement and
misappropriation of funds, despite the fact that the audit reports vividly have
shown that the accounting records have been fairly kept and therefore display a
true and fair view if the operations for the period under review. The most
sticking problem now become how can an investor assured himself that his
investment well even yield positive results in the face of this malady and the
profit figures that have magnetized him to the business are not fabricated or
falsified and misleading.
On the other hand, all auditors involve risk, auditors
therefore means the chance of damage to auditors or their firms as a result of
giving audit opinion that are wrong. Damage may be in form of monetary damage
paid to client or third parties as compensation for loss caused by the conduct
(for instance negligence) of auditors or simply loss of reputation with clients
or the business community.
1.3 PURPOSE OF THE STUDY
An audit is a process (carried out by suitable qualified
auditors) where by the accounts of business entities including charitable
organization, trust and professional firm are subjected to scrutiny in such a
detail as will enable the auditors to form an opinion as to their accuracy
truth and fairness. The object of medium audit has it ultimate aim of
verification of the financial positions disclosed by the balance sheet, and
profit or loss of the business. Based on the above the objectives of the study
To ascertain the necessity for business entities to hold,
periodic appraisals in the form of audits and the effect of such periodic
appraised on the organization effectiveness.
To identify the qualities and roles of independent auditors
in business process.
To make recommendation based on the findings of the study as
to the inevitability or regular auditing of financial statement of
To verify whether such audits are the credibility for the
1.4 RESEARCH QUESTIONS
The following research questions may be postulated. Is a
proper accounting record ideal for effective management of the banking sector?
How independent are the opinions of the auditor based on
their audit of the financial statement of the organization? Does the financial
statement give the true and fair view of the banks activities over the given
1.5 RESEARCH HYPOTHESIS
Based on the research question, statement of the problem and
the objectives of this study, this research will test and validate the
HO: Regular auditing of accounts of commercial banks does
not contribute to the banks validity and organizational effectiveness.
HI: Regulate auditing of account of commercial banks
contribute to the banks viability and organizational effectiveness.
HO: Regular auditing does not ensure that proper internal
control is maintained in business organization for efficient management of
HO: Auditing does not maintain probity and accountability
among the management and staff organization for business growth.
HI: Auditing maintain probity and accountability among the
management and staff organization for business growth.