TABLE OF CONTENT
Cover page i
Title page ii
Approval page iii
Abstract vi – vii
Table of content viii – x
1.0 Introduction 1
1.1 Background of the study 1-2
1.2 Statement of problem 2
1.3 Purpose of study 3
1.4 Research Questions 3
1.5 Significance of the study 4
1.6 Scope and Limitation of the study 4
1.7 Definition of terms
2.0 Literature Review 6
2.1 Background 6
2.2 Auditing 6-8
2.3 Duties of Auditors 8-9
2.4 Audit Evidence and Sources of Audit Evidence 9
2.5 Audit of a Sole Trader 9-11
2.6 Investigation and Kinds of Investigation 11-15
2.7 Stages involves in Carrying out Investigation 15-17
2.8 Investigation of Frauds 18
2.9 Investigation Prior to Acquisition 18-19
2.10 Principles of Auditing 20-21
3.0 Research Design and Methodology 22
3.1 Sources of Data 22-23
3.2 Location of Data 23-24
3.3 Population of the Study 24
3.4 Sample Size 25-26
3.5 Methods of Investigation 26-27
4.0 Presentation and Analysis of Data 28
4.1 Distribution of the Respondents 28-31
4.2 Data Analysis 31-40
5.0 Summary of Findings, Conclusion and Recommendation 41
5.1 Summary of Findings 41-42
5.2 Conclusion 42-44
5.3 Recommendations 44-46
1.1 BACKGROUND OF THE STUDY.
The idea of auditing came into being when a series of company acts
Commencing in 1844 gradually developed and incorporated as a result of
the need of examining the stewardship account by independent experts
called auditors which should then report annually the result of the finding.
Eze J.C (2001) defined Auditing as the process of investigating into
the financial records prepared in an organization to ascertain the
correctness and accuracy of the financial statement.
Taylor (1982) defined auditing as an investigation into the evidence
from which the final revenue accounts and balance sheet of an
organization in order to ascertain that the present a true and fair view of
the summarized transactions for the period under review.
Nwabueze C.C (1997) defined auditing as an exercise which is carried
out in order to lend credence to statements prepared by directors of the
company for use by the owners of the business.
An Auditing manual defined Investigation as an inquiry commissioned by a
client for some of his purpose. The preparation of the seconds of small
scale industries involves the bringing together of the control system.
1.2 STATEMENT OF PROBLEM
This research work is designed to find out the need for auditing and
investigation in small scale industries. Hence the following problems are
a. Lack of adequate knowledge of accounting principles.
b. Lack of adequate knowledge in auditing and investigation.
c. Lack of professional personnel in the management.
d. Inadequate professional independence.
e. Inadequate management support for internal auditing.
Small scale industries are industries that manufactures goods on small
scale basis. Therefore, the successful operation of this system is a function
of the operational efficiency which in itself depends on effective auditing
1.3 OBJECTIVE OF THE STUDY
The objective of this project work is to find and sought out the following:
a. The role of an effective auditing and investigation system in the
survival of small scale industries.
b. Whether the availability of adequate internal control system will
affect the audit investigation operations.
c. How the activities of small scale industries can be improved
through auditing and investigation.
1.4 RESEARCH QUESTIONS
1. Does existence of auditing and investigation lead to higher rate of
fraud and misappropriation of funds and properties in small scale
2. Has the standard of Auditing fallen in recent years?
3. Are Auditors reports effective to small scale industries?
4. Do Auditing and investigation aids small scale industries?
1.5 SIGNIFICANCE OF THE STUDY
The study is significant for the following:
Students: This study will serve as a foundation for further research on
this topic to students in the school of financial studies.
Auditors: This study will be of great important to Auditors wishing to
improve on their standard of operation and investigation. It will assist them
in their system of internal control and so help to check fraud.
Small Scale Industries: This study will help to highlight the causes of
fraud and misappropriation of funds and properties (Assets) in the
organization and provide suggestions to stop the practice. Others includes
Banks, Professional bodies and in fact the general public.
1.6 SCOPE AND LIMITATION OF THE STUDY
For a research work to be meaningful and for a proper generation, it
should cover a hide ground. Unfortunately, lack of resources such as
finance, book, time etc limited against the production thereby wringing it to
a manageable proportion.
1.7 DEFINITION OF TERMS
The terms used makes the study more understandable. These terms are
AUDITING: Investigation into the evidence from which trial revenue
accounts and balance sheet are prepared to ascertain a true and fair view.
AUDITORS: These are the professional persons in charge in audit.
FINANCIAL STATEMENT: This is the balance sheet of an organization
showing of assets and liabilities whether there is profit or loss for the
period of one year (i.e. 12 months).
INTERNAL CONTROL: This means the whole system of controls, finance
and other wise, established by the management.
INVESTIGATION: Finding against fraud.
AUDITING: This is a complete examination of a transactions a business
and matter in which its transactions are recorded.
BALANCE SHEET: Accurate audit.