INTERNAL AUDIT AS A CONTROL FOR EFFICIENT MANAGEMENT IN NIGERIA PUBLIC ENTERPRISES (A CASE STYDY OF LSDPC)
The purpose of this project is to identify and analyses
internal audit as a control for effective management in Nigeria public
Primary data was generated through the administration of
Ninety five questionnaires (95), Ninety (90) of the questionnaires were
returned and fully computed. Secondary data was collected through textbook,
journal and library research.
Responses from the questionnaires were classified
accordingly. Frequency and contingency tables were constructed and the
hypotheses were tested using chi-square X2 test statistics.
The result of the analysis shows that internal audit
control has positive effect on Nigeria public enterprises.
1.1 BACKGROUND TO THE STUDY
All over the world, auditing has been a major catalyst
which aids an effective and efficient accountability as well as transparency of
the public enterprise. Due to the large volume or task of the disposal of the
public servant in the public enterprise, there is need for a well-defined
Auditing can be defined as an independent examination of
an expression of opinion on the financial statement of an enterprise by an
appointed auditor in accordance with the term of engagement and in compliance
with statutory obligations and other professional requirements.
Again auditing according to Badmus Olusesan and Elegbede
David (2003) can be defined as the process carried out by suitably qualified
auditors whereby the accounting records of the business entity including
charities, trust, professional firm etc. are subjected to examination in such a
detail as to enable the auditor form an opinion and to their truth fairness and
Control system is very essential in any organization be it
a private or a public establishment in order to check how effective and
efficient they are maximizing the use of resources. One of the measures
commonly used to minimize wastage and guide plans to their eventual accomplishment
is the internal auditing.
Embarrassment, misappropriation, fraud and also wastage of
resources have highly been characteristics of government ministries and public
Despite the fact that there are installed control and
check of resources, embezzlement and fraud of resources misappropriation of
funds, errors, irregularities and mistake still find their way into the
enterprise. This seem a common phenomenon in Nigeria with regard to public
funds that the perpetrators of such act often attempt to cover themselves by
burning documents that are likely to expose them, destroying bills collected
that is not recorded. Other fraudulent acts such as lack of a well-established
accounting system and internal control in the public enterprise lead to
inefficient management and the wider effect will be perpetual under development
of the nation.
Internal audit department was established to reduce those
excesses however, in Nigeria public enterprises this is not so, as there are series
of problem which has been hindered in the internal audit efficiency.
1.2 STATEMENT OF
Ogunjimi (2001) while writing on accountability m the
Nigerian public enterprise observed that the involvement of the government in
economic and social expect of the national development, public enterprises now
play a vital role is the developmental processed since those public enterprise
handle a high preparation of government
funds proper account of stewardship are needed, it is also important to note
that established controls to ensure proper accounts of operation have been
grossly abused by lack of accountability on the performance of such enterprise
of public fund, fraud and gross wastage resources are still the order of the
day in the public enterprise.
Therefore the internal audit department exists so as to
reduce the exercise-financial mismanagement and also the lack of proper
accountability to the barest minimum. Internal audit which is supposed to serve
as a control tool sometimes becomes inefficient due to some inbuilt factor that
impair it independence and that thus hinder its efficiently.
1.3 PURPOSED OF THE STUDY
Internal audit which is meant to serve as a control tool
has failed due to some factors impair on its independent and thus hinders its
effectiveness and efficiency. Therefore, the purpose of the study is as follow:
factors that hinder internal audit efficiency in Lagos State Development and
Property corporation (LSDPC) as a public enterprises
Reduce excesses of
the internal auditing department of LSDPC
and accountability in LSDPC
factors that hinder internal audit efficiency and how these factors are
impinged. It shapes up performance of management.
SIGNIFICANCE THE STUDY
This research work on internal audit as a control for
efficient management in Nigeria public enterprise will be a great importance
because it will aim at ensuring that it will help at contributing towards
academy knowledge by adding to or increasing the frontier of knowledge as well
as helping to solve the problem related to the kind aimed at improving internal
audit in the public sector. It also helps government institution so as to know
the best form of internal auditing system to practice. More so, this research
work will be very useful for solving the problem arising from the auditing need
of the society most especially in the public enterprise.
Also this, study will make insight into the deficiencies
in the current internal audit practices and will therefore be useful to those
who are at the helm of affairs in the country. This study will also discredit
the belief of some people that internal audit is not necessary in the public
enterprise. Finally it is hope that this study will serve as a launching pad
for researchers who may like to carryout research on similar area of study.
This is a major determination to the success of this
These are specific question addressing the dimension of
the statement of problem as stated earlier. These research questions are:
What factors hinder
internal audit efficiency in Nigeria public enterprise?
Does good internal
audit practice improve managerial performance in Nigerian public enterprise?
Why have the
established controls failed to enhance the managerial performance in the
Nigeria public enterprise?
To what impact is
internal auditing to organizations performance?
What is the effect
of the past internal auditing system in the public sector?
audit help management to keep proper control of its activities and
1.6 RESEARCH HYPOTHESES
By hypothesis, it simply means a statement that has not
been subjected to test. Hypothesis is always of two types namely:
Null Hypothesis (Negative)
ii) H1: Alternative hypothesis
It should be noted that it is the Ho
that is subjected to test since it is the
negative hypothesis. Whenever the Ho is
rejected the Hi must be accepted and
In accordance with the research question raised m 1.6, the
following hypothesis were postulated and tested.
is no significant relationship between internal audit practice and the
managerial performance of public enterprise.
is significant relationship between internal audit practice and the managerial performance
of public enterprise.
internal control does not give internal management / confidence on its
internal control gives internal management confidence on its activities.
1.7 SCOPE OF THB
By scope of the study, it simply means the area of
coverage of which I aimed at working upon in this research work. This scope of
this study on internal audit as a control for efficient management in Nigeria
public enterprise on Lagos State Development and Property Corporation (LSDPC), but will also cover some related
policies that are formulated to internal audit in Nigeria particularly Lagos
state in focus. It will be viewing the entire internal audit making process in
Nigeria as wen as the problem associated with it in relation to its efficient
management in Nigerian public enterprises.
LIMITATIONS OF THE STUDY
This research work on internal audit as a control for
efficient management in Nigerian public enterprises as the following limitation
to this study may include;
Attitude: Some of the respondent
officials of LSDPC may be skeptical and afraid. of releasing vital information
about the company due to the fact that they know the true intention of the
Constraint: The period under
which the study is to be carried out is relatively short. To source for data
and interviewing the staffs.
iii. Finance: The
study will be limited by inadequate funds.
Funds are needed for transportation, photocopying of
materials and typing the funds are not forth coming.
Power Supply: Insufficient power
supply in the country also imposed some limitation to the study by causing inadequate
access to internet facilities.