ENHANCING CORPORATE ACCOUNTABILITY THROUGH EFFECTIVE AUDIT SYSTEM (A Case Study of Sheffeild Risk Management Limited Owerri Imo State)

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Abstract

Ability to report back the conclusion of an assignment of the progress
made so far to the person(s) who delegated the authority to the
performer of an assignment, duty or function, has for decades eluded
this nation both in the private and public responsibilities to be performed
and performed and reported back has been carried out as accomplished.
The lack of accountability leads to many vices in our social and
economic system. The objectives of this study therefore are: (a) To
ascertain the determine the role of independent audit towards
accountability in an organization (b) To determine if independent audit
can control fraud and embezzlement. The primary data sources (the
questionnaire) collected response from thirty two (32) respondents out of
forty (40) that was sampled. Data collected through primary sources
were analyzed on tables using percentages, three hypotheses were
stated in null form and ere tested using the X2 statistics, simple
percentages and the test revealed that audit enhances accountability in
an organization and also help in controlling fraud, embezzlement and
defalcation in an organization.

TABLE OF CONTENTS

Title page- – –
Certification – –
Dedication- – –
Acknowledgement –

– – – – – – – -i
– – – – – – – -ii
– – – – – – – -iii
– – – – – – – -iv
Abstract- – – – – – – – – – -v
Table of contents- – – – – – – – – -vi
CHAPTER ONE
1.0 Introduction- – – – – – – – -1
1.1 Background of the study – – – – – – -1
1.2 Statement of problem- – – – – – -5
1.3 Objectives of the study – – – – – – -6
1.4 Research Hypothesis- – – – – – – -7
1.5 Significant of the study – – – – – – -7
1.6 The Scope Of The Research – – – – – -7
1.7 Limitations Of The Study – – – – – – -8
1.8 Organzation Of Study – – – – – – -9
1.9 Definition of terms- – – – – – – -10
CHAPTER TWO
1.0 Review of related literature– – – – – -13
1.1 What is an Audit? – – – – – – – -13
1.2 Who is an Auditor? – – – – – – – -15
1.3 Qualification of an Auditor- – – – – – -16
1.4 Appointment of an Auditor — – – – – -16
1.5 Objectives Of Auditing – – – – – – -17
1.6 Audit Test – – – – – – – – -17
1.7 Audit test- – – – – – – – -21
1.8 Justification For Auditing – – – – – – -24
1.9 Standard of reporting – – – – – – -26
1.10 Internal Control Concept – – – – – -27

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Characteristics of satisfactory system of internal control-
Relationship between internal Auditing and internal-28
control- – – – – – – – – -29
1.13 Importance of internal control in Auditing – – – -30
1.14 Internal Auditing defined – – – – – – -31
1.15 Qualities of internal Auditors – – – – – -33
1.16 Independence of internal Auditors – – – – -35
1.17 Measuring the performance of an internal Auditor- – -36
1.18 Relationship between internal and external Auditors- – -37
1.19 Co-operation of internal and external Auditors- – – -38
1.20 Fraud defined- – – – – – – – -39
1.21 Types of fraud- – – – – – – – -39

CHAPTER THREE
2. RESEARCH METHODOLOGY
2.0 Introduction- – – – – – – – -44
2.1 The Research design – – – – – – – -44
2.2 Sources of Data- – – – – – – -45
2.3 Population and sample size- – – – – – -45
2.4 Data collection/instruments- – – – – -45
2.5 Validity of resources- – – – – – – -47
2.6 Method of data Analysis- – – – – – -47
2.7 Library Research- – – – – – – -48

CHAPTER FOUR
4.0 DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1 Introduction- – – – – – – – -50
4.2 Data Analysis- – – – – – – – -52
4.3 Test of Hypothesis- – – – – – – -63
4.3.1 Test of Hypothesis number I- – – – – -63
4.3.2 Test of Hypothesis number ii- – – – – -68
4.3.3 Test of Hypothesis number iii- – – – – -70

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CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDDATIONS
Summary of findings 74
Conclusion 76
Recommendations 76
Bibliography 79

CHAPTER ONE

INTRODUCTION
Accountability in both public and private section has being an issue that is
worth discussing due to its paramount and colossal impact to the overall
performance of an organization.
It (Accountability) has to do with reporting back action, task carried out by an
individual to the authority who apportioned such function.

BACKGROUND OF THE STUDY

Accountability is the process or act of reporting back to a higher authority,
body or individual the actions taken by a steward. It enables the person or
persons reported to determine if the steward has acted or performed the assigned
duties properly and satisfactory. It plays a major role in the success or failure of
any business, particularly when the business is not managed by its owner.
Initially most business set-ups were managed by their owners. The owners‟
manager was the sole financial contribution to the enterprise. But with the
development in the scale and scope of business, a huge capital beyond that
affordable by the sole individual or a family was needed. Consequently
contributors (hereafter called shareholders) were required to raise the funds for
the business. The emergence of these shareholders led to the divorce of the
owner managers from the management of the business as all of them cannot be
directors at the same time. This the management of business was entrusted to
the hands of people who have no financial claims to the business and the
shareholders were sceptical about this particularly as the law does not permit
them individually to go through the books of the company in their desire to keep
abreast of the performance of the directors.

This skepticism aroused the need for surveillance over the activities of the
non-owner managing directors. This bid to fulfil the later led to the engagement
of third-party (an Auditor) to perform an audit of the company‟s accounts.
Audit has since them received a lot of definitions and/or then received a lot
of definitions and/or interpretations both from accounting bodies and auditors
and their non-the-like. Justifiable is to say that audit has suffered a lot of
misinterpretations. Most of the misgiving interpretations see it as being armed at
fraud and error detection. But audit essentially involves much more than that.
One of the most involved and of course the most acceptable definitions so far is
that issued by the consultative council of accountability bodies (CCAB) which
sees audit as “the independent examination and expression of opinion on the
financial statement of an enterprise by an appointed auditor in pursuance of
statutory obligation (Howard 1982:1).
Deductively, an audit is the objective scrutiny of someone‟s work or
presentation by a third party (an auditor) who is different from the users and the
preparing of the presentation. The general essence of audit is to ascertain
compliance of the firm‟s records and operational policies with usefulness of
acceptability of and the dependability on the firm‟s financial statements.
Accountability as explained above has suffered some misconceptions,
surprisingly in the hands of those who should have understood it better. Most of
the lay men conceptual understanding of accountability relates it to
„communicating about monetary matters (Odon, 1999:7) but accountability goes
beyond that. According to the Webster encyclopaedia dictionary of English
language (1995:110), accountability is defined as “the state of being
accountable, answerable, liable or responsible” the same dictionary goes further
to define accountable as “liable to pay or make good in case of loss; responsible
to a trust, liable to be called to account, put in another way an much more

related to the context in the articles Aba times of fourth September 1999
captioned “accountability in the third republic” it says
Accountability connotes answerability and stewardship, by
answerability is meant answering for one‟s actions and
decisions (odon1999:7)
Stewardship according to the article means service; it means
that every leader should be responsible to the people who
reposed trust in him.
For accountability to be accorded its rightful place in an organization the writer
believes that there is a high need for proper internal control measure and in
addition, efforts should be made to ensure that company accounts are subjected
to external and independent audits after each financial period.