Internal auditing as an aid to management (a study of household products company, orlu, imo state)

Thesis Overview

<p> INTROUCTION<br>1.1 BACKGROUND OF THE STUDY.<br>At the beginning of the century, most businesses are small and sole-operated.<br>The owners/managers are overly involved with most of the decision making. As<br>business grows in size and complexity, professional managers take position of<br>the owners and the operators.<br>Consequently, they rely heavily upon streams of accounting and<br>statistical report which summarizes current happenings and conditions in the<br>enterprise. The information carried by these streams of report enables<br>management to control and direct the enterprise in order to assure<br>management that the information received are both reliable and accurate. A<br>system of internal audit is developed to monitor the activities of the company.<br>The need for maintaining the adequate efficient and effective internal<br>audit, therefore cannot be overemphasized especially in days when Nigeria’s<br>economy still is witnessing depression and every company is making effort in<br>ensuring that wastage, pilferage, misappropriation are checked or avoided,<br>and to ensure that assets are being secured.<br>Some problems were noticed during the cause of this research;<br>problems within the company, these problems necessitate this work. The<br>pg. 12<br>researcher noticed that there was ineffective co-operation between the<br>internal audit and management, audit reports were sometimes ignored by the<br>management. The relationship between the internal auditor and external<br>auditor was strained making work harder for the external auditor. The lack of<br>internal audit to prevent pilferage and fraud within the company thereby<br>preventing an error free working condition.<br>1.2 STATEMENT OF PROBLEM<br>Often, management and internal audit department function were seen as<br>contradictory rather than complementary. Internal audit department is setup<br>to ensure adherence to management policy but this objective cannot be<br>achieved because of interference and undue influence by the top<br>management.<br>More so, monthly or quarterly internal audit report as the case may be<br>in an organization is expected to provide information required by management<br>to determine how effective their policies and implementation are. It is on this<br>realization that this study will attempt to determine how effective are those<br>information to aid management in solving day to day problems. It signifies<br>defects or problems; the research will examine number of them namely:<br>pg. 13<br>a) There exists no relationship between the internal audit and<br>management.<br>b) Co-operation does not exist between the internal auditor and<br>external auditor.<br>c) Internal audit does not assist in detection and prevention of fraud.<br>1.3 OBJECTIVES OF THE STUDY.<br>Objectives of the study include:<br> To ascertain if the duties of the internal auditor assist management in<br>taking informed decision.<br> To ascertain if there exist co-operation between the internal auditor and<br>external auditor.<br> To find out if internal audit assists in the detection and prevention of<br>fraud. <br></p>