Role Of Auditing In Controlling Fraud In Government Establishment
(A Case Study Of Federal Pay Office Enugu)
Auditing plays a crucial role in mitigating fraud within government establishments through its comprehensive examination and verification processes. By scrutinizing financial records, transactions, and operational procedures, auditors can identify discrepancies, irregularities, and potential instances of fraud. Through meticulous analysis, auditors assess the effectiveness of internal controls and compliance with regulatory standards, thereby preventing and detecting fraudulent activities. Additionally, audits serve as a deterrent to fraudulent behavior by promoting transparency, accountability, and integrity within government agencies. Moreover, auditors provide recommendations for enhancing control mechanisms and implementing corrective measures to address vulnerabilities and minimize the risk of fraud recurrence. This proactive approach to oversight and risk management reinforces public trust in government institutions and ensures the responsible stewardship of taxpayer funds.
I propose to write this work in order to achieve the purpose on the role played by auditors of the production of public fund in the government establishment ministries and extraministrial department.
The research bill go into providing a systematic financial accountability that will promote proper stewardship of asset and promote effectiveness at reasonable cost.
The basis on how to achieve aforementioned objective will also be highlighted which ensure the efficient financial administration through the system of internal control and management information system.
However the literature review will help to ascertain other writer view concerning the subject of the study which will explain how government establishment is to be organized in such a way that fraud to be used will be collected from primary and secondary sources.
Finally auditor empowered to execute or enforce its finds after its work has been reviewed by the public account committee (P.A.C) there are some constraint the researcher will encounter during her research work.
These are constraints of time and financial constraints. My purpose of embarking on this project is working forward to see that this research work will provide a current and comprehensive statement of emerging patterns of which auditors can discharge their responsibilities more effectively while decreasing risk of loss to both the establishment and themselves. And at the end of this project the auditors will be encouraged to develop and behave with honesty and integrity to their work.
This research work is design to achieve a specific purpose on the role played by Auditors in protection of public funds in the government establishments, ministries or government parastatals.
The research goes into providing a systematic financial accountability that will promote proper stewardship of asset, deter wastes, dishonesty and promote effeteness of reasonable cost.
However, the literature review helps to ascertain other writes view concerning the subject of the study which explains how government establishment is so organized in such a way that fraud could be detected easily and on time just because particular audits are assigned to particular personnel. The data used for this work was collected from primary and secondary source. Questionnaire were also used (200 in number) 120 were retained on filled while 20 missed on transit and total used was 60 in number. Against the background, invaluable and reliable discoverers were made.
Finally the research recommends that the legislative are of government should make it mandatory for the accountant general to submit financial statement of government account to audit department for audit work within 6(six month of auditors to be given power to execute or enforce its finding after its work has been review by the public account committee (P.Ac).
INTRODUCTION
BACKGROUND OF THE STUDY
For a long time now Nigeria have been witnessing a down turn in her development efforts. This primary cause of this down has been linked with the in or deinate ambition of the average Nigeria to get rich quick at the expense of less piviltedge ones. Those who a seen them selves as being opportunity to control government establishment use the opportunity to perpetrate fraud or misappropriate public funds and properties.
Our law makers have seen the need for acceptable accountability by making a provision for the federal and stated government to report on the account of stewardship rendered by these public officers.
Section 126 (1) the constitution of the federal republic of Nigeria 199. States that there shall be an audit general for each state who shall be appointed in accordance with the provision of section 126 of the constitution”.
Section (2) says that the public account of a state and of all offices and courts of the state shall be audited by the auditor general for the state”.
This study focused attention how well or otherwise the government audit department conduct it activities in response to section 125 of 1999 constitution of the federal republic of Nigeria.
1.2 STATEMENT OF THE PROBLEM
Public embezzlement always create a consciousness on the part of the supervisory authorities as to the quality and digree of protective management in government
1. Lack of understanding of the purpose of auditing among the society in general.
2. Lack of a well defined goal oriented policies aimed at building up a strong and sound financial system.
3. Inherent weakness in the existing. Administrative arrangement for government establishment accounting function.
4. Improper supervision of over all officers under the authority entrusted with the receipts expenditure of public money.
Inability of the government establishment maintain a sound system of internal control.
1.3 OBJECTIVE OF THE STUDY
The specific purpose which the project is design to achiever are:
1. To find out roles played by the audit department in protection of public finds.
2. To provide a system of financial accountability which will promote proper stewardship of assets deter wastes dishonesty and extravagancy and promote effectiveness at reasonable costs.
3. To ensure efficient financial administration through system of internal control and management information.
4. To determine the extent to which fraud misapporiation and embezzlement of public funds have persisted in public services.
5. To find out the delays in carrying out audit of account of government establishment.
1.4 SIGNIFICANT OF THE STUDY .
It is expected that the result of this study will help improve financial reporting by government establishment providing annual reports in accordance with the requirement of audit acts, 1990.
The significant of the study to society in general is to correct the wrong notion of the society in general is to correct the wrong notion of the wealth of government which contrary to realty is usually. Regarded in position could cut his own share at will and get away with it.
To the government is ensuing the standard that down in the ministry manual of responsibilities and procedure are maintained.
To the auditor to pin point to them the risk that confronts the auditors in the excretes of his duties the legal action that could be taken against the auditor she/he deficit in this duty.
The study sure as a quite for future quern mental policy formulation on auditing guideline to government establishment .
Finally, it is expected that this study will serve as a work of reference to future researchers.
1. Time constraints: The researcher as a student also engaged in other activities which limited the time.
Used for the pro0ject the research was deeply affected by the shortness of time as a result of the short semester being ran by the school. The semester coupled with dash of programme of the school and there is no special time given for proper investigation are the constraints which left the researcher with little or no time to carry out this project.
2. SCOPE: Due to the vastness of the areas to be covered by the researcher, the researcher found it way difficult she could not obtain information from each of theses areas. For instance there are many firms dealing with auditing and investigation and for the fact that it is very difficult for one to gather information or data from each of these firm one being a student was compelled to unit his study to federal pay office Enugu.
3. LACK OF STATISTICAL INFORMATION:
Facts were not easy to come about during the course of this project work. Even where the facts are available they were either out dated or the authorities concerned refused to bring it out or are subject necessary protocols. At the expense of my limited time before they were male available.
4. FINANCIAL CONSTRAINTS:
The researcher lacked the necessary finance to carryout extensive research on this topic .
5. NON –RESPONSES:
Inadequate responses such as some ministries when interviewed defined responses and unable to help due to internal problem like staff of local government audit department of Enugu state.
6. BUREAUCRACY:
The bureaucracy in government establishment has made it very difficult for researcher to obtain research information.
7. SECREY:
Most Nige4ria dislike activities that appear to be probing them, they tend to avoid researchers because they gelt their activities which are not meant for public consumption would be exposed through research work.,
1.5 RESEARCH QUESTION
The following research question were formulated by the researcher for the conduct of this project.
1. What aspect of the accounts government policies hinders effective and efficient auditing of account government establishment
2. How can government establishment supervise the expenditure of government taking care that no payment were made which is not covered by proper authority.
3. To what extent do fraud effect economic development of the country.
4. What measures showed be taken to ensure that objective of auditing are achieved in government establishment.
1.6 STATEMENT OF HYPOTHESIS
H o: The audit does not play effective and efficient role in the control of fraud in government establishment .
Hi: The auditor play effective and efficient role in the control poof fraud in government establishment.
1.7 SCOPE / LIMITATION OF THE STUDY
The study is a case study of federal pay office pay officer Enugu between 1996to 2003.
In this study the researcher only considered the ministerial accounting structure or accounting structure of selected government establishment on parastatals in the state, because of the following limitation.
Role Of Auditing In Controlling Fraud In Government Establishment:
Auditing plays a crucial role in controlling fraud in government establishments by providing an independent and systematic examination of financial records, transactions, and operations. The primary goal of auditing is to ensure the accuracy, transparency, and accountability of financial information and to identify and prevent fraudulent activities. Here’s how auditing contributes to controlling fraud in government establishments:
- Detection and Prevention of Fraud: Auditors examine financial records and transactions in detail to identify irregularities, inconsistencies, and potential fraudulent activities. By conducting thorough audits, they can detect fraudulent transactions or activities that may have been overlooked by the internal controls. This detection helps prevent further fraud and identifies areas that need tighter controls.
- Independent Review: Auditors provide an objective and independent assessment of financial activities. This separation from day-to-day operations reduces the risk of collusion between employees to carry out fraudulent activities. The impartial perspective of auditors helps in identifying discrepancies that might be missed by those directly involved in the processes.
- Evaluating Internal Controls: Auditors assess the adequacy and effectiveness of internal controls in place within government establishments. Internal controls are mechanisms that prevent and detect fraudulent activities by enforcing policies and procedures. Auditors identify weaknesses in these controls and recommend improvements to reduce the risk of fraud.
- Risk Assessment: Auditors analyze the organization’s risk profile and identify areas with a higher susceptibility to fraud. This enables the government establishment to allocate resources and implement stronger controls in areas that are most vulnerable to fraudulent activities.
- Data Analysis Techniques: Auditing today often involves the use of data analysis techniques to identify patterns, anomalies, and trends that may indicate fraud. By analyzing large volumes of data, auditors can uncover unusual transactions or behaviors that could point to fraudulent activities.
- Fraud Prevention Training: Auditors can provide training and guidance to government employees about fraud prevention, detection, and reporting. Educated employees are more likely to recognize suspicious activities and report them promptly, contributing to a culture of accountability and fraud awareness.
- Recommendations for Improvement: Auditors provide recommendations to strengthen the organization’s control environment and reduce the risk of fraud. These recommendations may include changes to policies, procedures, or the implementation of new technologies to enhance security.
- Deterrence Effect: The knowledge that regular audits are conducted can act as a deterrent to potential fraudsters within the government establishment. The fear of being caught and facing consequences can discourage individuals from engaging in fraudulent activities.
- Transparency and Accountability: Auditing ensures transparency by making financial information accessible and understandable to stakeholders, including the public. When government establishments are transparent about their financial activities, it becomes harder to manipulate records for fraudulent purposes.
- Legal and Regulatory Compliance: Auditors verify that the government establishment is complying with relevant laws, regulations, and standards. This includes ensuring that funds are being used for their intended purposes and that financial reporting is accurate and complete.
In summary, auditing serves as a critical tool for controlling fraud in government establishments by identifying, preventing, and deterring fraudulent activities. Regular and thorough audits help maintain accountability, transparency, and the proper use of public funds.