THE IMPACT AND CHALLENGES OF INTERNAL AND EXTERNAL AUDITORS IN MANUFACTURING COMPANIES ABSTRACT
This work “THE IMPACT AND CHALLENGES OF INTERNAL AND
EXTERNAL AUDITOR IN MANUFACTURING COMPANIES” was chosen by the researcher so as
to enable and prove the essence why auditors are needed in companies. The study
is aimed at investigating the behavior
of both workers, auditors, employees, managers in the auditing of manufacturing
companies. The study is divided into five (5) chapters. The first chapter is
the introductory chapter which gave definitions of auditing, manufacturing
companies, internal auditor and external auditor. Chapter two gave us more
about auditors i.e their qualification, impact, problems and challenges, their
work with the law and companies. While chapter three gave practical example
with data collection and illustrations and also chapter four, finally chapter
five gave concluding remarks.
TABLE OF CONTENTS
Title page i
Approval page ii
Dedication iii
Acknowledgement iv
Abstract v
Table of contents vi
CHAPTER ONE
Introduction 1
Statement of research problem 3
Research questions 5
Objectives of the study 7
Significance of the study 8
Scope of the study 9
Limitation of study 10
Definition of terms 11
CHAPTER TWO
Literature review 16
Concept of auditing 16
Nature of internal and external auditing 20
Methods of audit approach 21
The necessity of external and internal auditors 23
Auditors and the law 24
Audit report 32
Auditors liability
39
The importance of audit in manufacturing companies 44
Role of an auditor in a manufacturing company 45
Principles of auditing 46
CHAPTER THREE
Methodology
49
Introduction
49
Research design
50
3.3 Rational for
choice of variables 50
3.4 The
methodology 52
3.5 Data selection of analysis 53
CHAPTER FOUR
Presentation and analysis of data 55
Introduction 55
Data presentation, classification and calculations 55
Interpretation of result 61
CHAPTER FIVE
Summary, recommendation and conclusion 63
Summary of findings
63
Recommendation 64
Conclusion
66
Bibliography 68
Appendix 69
Questionnaire 70
CHAPTER ONE
INTRODUCTION
Manufacturing companies are companies that transform raw
materials or semi finished goods into commodities, goods usable by humans.
Manufacturing companies are companies that produce commercially. Their main aim
is to produce goods and render services to members of the public at a minimum
cost to maximize profit.
In manufacturing companies, some various items of
expenditure are allocated to sub division of the final account in accordance
with the principles which govern cost accounts. However, when a manufacturing
company produces more than one particular product, different accounts are to be
prepared by the different departments.
In manufacturing company, company established by law is treated as a separate legal entity
different from shareholders or subscribers. The owners or shareholders of a
manufacturing company present their account to the auditors who audit and
report if the account shows a true and fair view before it is been presented to
the directors of the company. Without the report of the auditor in a
manufacturing company the shareholders i.e the owners of the company finds it
hard to accept the account given to them by the directors.
The auditors both internal and external auditors at times
have problem in computing accounts and giving reports because it involves the
strenuous method of bringing together all accounts of the company and summary
of these accounts and control system.
An auditor is said to be an accountant who undergo a
recognized professional course and a member of one of the recognized account
bodies resident in Nigeria and who is carrying out a professional accountancy
practice. For an auditor to audit a company account he must not be an employee
or a body corporate of the company been audited. An auditor should be
recognized in the context of the institute of chartered accountants of Nigeria.
An external auditors are auditors that are independent of
the organization that are auditing.
External auditors can be government auditors or an independent public
accounting firm. They report to the company’s shareholders. They provide their
experienced opinion on the truthfulness of company’s financial statements and
perform work on a test basis to monitor system in place.
Internal auditor is an auditor that work within an
organization and report to its audit committee and directors. They help to
design the company’s organizing systems and help develop specific management
policies. They also ensure that all policies implemented for risk management
are operating effectively the work of the internal auditors tends to be
continuous and based on the internal control system of a business of any size.
A Research proposal for the impact and challenges of internal and external auditors in manufacturing companies:
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This work “THE IMPACT AND CHALLENGES OF INTERNAL AND EXTERNAL AUDITOR IN MANUFACTURING COMPANIES” was chosen by the researcher so as to enable and prove the essence why auditors are needed in companies. The study is aimed at investigating the behavior of both workers, auditors, employees, managers in the auditing of manufacturing companies. The study is divided into five (5) chapters. The first chapter is the introductory chapter which gave definitions of auditing, manufacturing companies, internal auditor and external auditor. Chapter two gave us more about auditors i.e their qualification, impact, problems and challenges, their work with the law and companies. While chapter three gave practical example with data collection and illustrations and also chapter four, finally chapter five gave concluding remarks... accounting project topics
THE IMPACT AND CHALLENGES OF INTERNAL AND EXTERNAL AUDITORS IN MANUFACTURING COMPANIES