1.01BACKGROUND OF RESEARCH
The method of examining the evidence of financial
transactions could be traced back to the time when there was need to transact
business beyond one’s immediate needs. But such method of examining or checking
the evidence of such transaction-known as Audit did not start immediately until
after the trade by barter era. It came at a time when individuals noticed that
no one is self sufficient thus, the need for individuals to pool resources
together to form what is known today as business.
Management as the central directing and controlling elements
in a business organization came as a result of individuals pooling their
resources together to strengthen their co-ordinate and integration of specific
activities in the organization to ensure effectiveness and efficiency of human
cooperation in recent times, business organization are increasing due to
scientific breakthrough and economic development. As a result, the need for
decentralization, which means authority is systematically delegated or pushed
down the line in an organization arises. This makes corporate management
becomes so complex and the increasing volume of trade among business
organization have made the art of management so complex and challenging. The
only managers with mastered skills in modern scientific method of management
can cope with the increasing demand required by their position.
In addition to this complexity of corporate management, is
the increasing wave to fraud and misappropriation of funds in the private and
public sectors of the economy at large. In an attempt to cope with this situation and keep their
business profitable, management have to look inwardly to increase control
system, by which all the policies and activities are put to check to conform
with the set objectives. This involves the subdivision of duties by means of
which no one person is entirely responsible for one transaction but a some
stage of its performance, each person work come to the notice of at least one
Internal audit also forms a integral part of this internal
control system, which is a management function, which appraise the problems,
and performance of every department in the organization.
1.2STATEMENT OF PROBLEM
Corporate managers may delegate their authority but the
responsibility to get the assignment done cannot be delegated, but rather rest
on the managers. In this understanding managers manage conceptual system which
will ensure that physical assets represented by conceptual assets are protected
and managed properly. Since management can only manage through delegation of
authority, it is only through a good internal auditing system that the top
managers can check the level of compliance to delegated authority. Internal
audit is needed to ensure that all delegated duties are carried out effectively
and also that the policies and procedures of the company are adhered to
strictly, this include the following:
audit are not independent.
2. they are employed by management and
therefore are responsible to the management.
3. Some of
them are responsible to the director of financing accounts.
4. They are
not professionally qualified.
5. They are
not well paid.
1.3OBJECTIVES OF THE STUDY
An audit is not primarily aimed at detecting Fraud and
errors, or dinging fault with accounting staff of an organization. Naturally, in the process of examining the
documents which from the basis of a financial statement, the auditor, may
detect fraud or errors and weaknesses in the accounting system.