The Need For Auditing And Investigation In Small Scale Industries

TABLE OF CONTENT

Cover page                                                                                        i

Title page                                                                                  ii

Approval page                                                                            iii

Dedication                                                                                 iv

Acknowledgement                                                                      v

Abstract                                                                                   vi – vii

Table of content                                                                      viii – x

CHAPTER ONE

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                                                                      5

CHAPTER TWO

• 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

CHAPTER THREE                    

• 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

CHAPTER FOUR      

• Presentation and Analysis of Data 28

4.1    Distribution of the Respondents                                            28-31

4.2    Data Analysis                                                                     31-40

CHAPTER FIVE

• Summary of Findings, Conclusion and Recommendation 41

5.1    Summary of Findings                                                          41-42

5.2    Conclusion                                                                         42-44

5.3    Recommendations                                                              44-46

References                                                                       47-48

CHAPTER ONE

1.0   INTRODUCTION

• 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 stated:

1. Lack of adequate knowledge of accounting principles.
2. Lack of adequate knowledge in auditing and investigation.
3. Lack of professional personnel in the management.
4. Inadequate professional independence.
5. 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 and investigation.

1.3   OBJECTIVE OF THE STUDY

The objective of this project work is to find and sought out the following:

1. The role of an effective auditing and investigation system in the survival of small scale industries.
2. Whether the availability of adequate internal control system will affect the audit investigation operations.
3. 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 industries?
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 as follows:

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.