Auditing As An Instrument For Ensuring Accountability

INTRODUCTION
The practice of auditing in the primitive form can be traced back to ancient times where the receipts and payments of an estate or a manor were read to the head or proprietor, or the Lord of a manor. The word auditing originated fr4om the Latin word Audire (meaning to hear). The business of this period was characterised by sole proprietorship.
But with industrial revolution, there was an increase in business transactions and there emerge partnership and joint stock companies. The evolution of mechanised industries involved the provision of finance far in excess of what it used to be. Business become more complex and required more formal and improved accountability.
Under the company form of organisation, the shareholders as a body delegated the management of the undertaking to a board of directors and periodically the board submittes to the shareholders accounts of the company in order that the members might be able to see a true and fair view of the financial position and the profit or loss of the undertaking in which they were interested.
Because of these circumstances the need arose for some means by which the shareholders as a body might be satisfied that the accounts, presented to them by their board of directors, did in fact show a true and fair view of the financial position and earnings of the company. It was for this reason therefore that the practice developed of appointing auditors whose duty it was to verify on behalf of the shareholders the accounts of the directors and to report there on to the shareholders.
Under the early British companies Acts, the auditors appointed were one or two of the shareholders of the company. As however, the chosen auditors commonly had insufficient technical qualifications, there were probably not able to carry out a very effective audit nor were there paid anything for the work they did although a later Act did provide for them to employ a clerk to do some work, whose remuneration should be provided by the company.
It was the British companies Act, 1900, which first made it legally compulsory for every company to appoint independent auditors, as we now know them, and provided for their remuneration. It was undoubtedly the rapid increase in the number of joint – stock companies that took place at this time, and the compulsory professional audit thus provided for in the companies Act, 1900, that gave the great impetus to the development of the accountancy profession. In Nigeria today the accounts of every company and the majority of partnerships are audited by professional accountants and in recent years the accountancy profession has expanded greatly in many other directions.

1.1 STATEMENT OF PROBLEM
This study entitled “Auditing as an instrument for organisational accountability” attempts to determine the importance of auditing to an organisational growth.
It is also meant to discover the:
Objective of Auditing
Types of auditing
Relevance of internal auditing to external auditors
Auditing as a means for fraud control
The future of auditing, Auditors liability and report.

1.2 PURPOSE OF THE STUDY
The objective of this study is to identify the need for every organisation to know the importance of auditing in an organisation.
The researcher also wish to put across how auditing enhances organisational accountability and growth.

1.3 SIGNIFICANCE OF THE STUDY
The significance of the study is to highlight the importance of auditing to the growth and accountability of a manufacturing company.
This study will also add to the advancement of knowledge in the field of auditing in an organisation. Future researcher in this areas will also benefit from the study.

1.4 STATEMENT OF HYPOTHESES
This study is required to test among other things the following:
Ho: Internal auditing as a part of internal control system is not useful to external auditor.
Hi: Internal auditing as a part of internal control system is useful to external auditor.
Ho: Poor and inefficient internal control and Auditing does not encourage fraud.
Hi: Poor and inefficient internal control and Auditing encourages fraud and mismanagement.
Ho: Growth and survival of Anamco Ltd. does not depend on Auditing and internal control.
Hi: Growth and survival of Anamco Ltd. depends on Auditing and internal control.
Ho: Auditing and internal control does not contribute to the smooth implementation of management policies.
Ho: Auditing and internal control contributes to the smooth implementation of management policies.

1.5 SCOPE OF THE STUDY
This study concentrates solely on a manufacturing company in Enugu state, with special reference to the Anambra Motor Manufacturing Company (ANAMCO) Enugu. The organisation undertakes business in motor manufacturing especially Mercedes Benze products. Particular attention will be paid to the methods and procedures employed by the accounting department in performing its duties.

1.6 LIMITATION OF THE STUDY
Time factor imposes a big constraint on this study as a research of this scope can hardly be completed within the two months time limit set for it. This factor no doubt made some aspects that would have been included to be left out. Such aspects include inter-company comparison and the corporation to the industry.
Another big constraint on the research is finance. Financial problems to a great extent hampered the gathering of data (information) for the study. This is more so when are considers the cost of moving from the school to the site of the organisation used as a case study. One also had to face the difficulty of conviction of the officials taken as specimen, a lot of explanation and persecution to get the co-operation of such respondent.

1.7 DEFINITION OF TERMS
To ensure a proper understanding of what the study is all about some unfamiliar words to those who are not in the same field are explained as they appear in the project.
AUDIT – An independent examination of, and expression of an opinion on, the financial statements of an enterprise.
INTERNAL AUDIT – The act of ensuring that control measures set up by management are complied with.