This study was aimed primarily at highlighting the techniques, policies and concept of auditing as they relate to growth of business corporation. The principal focus was on the private sector which more than any other sector uses their financial reports. And a research survey was conducted in Setraco Construction Company, Patani, Delta State. This study also focuses on the nature and purpose of independent auditing and its relevance to the economic growth of business organisation. The objective of the study was to appraise the impact of auditing in Satraco Construction Company, Patani and to examine why auditing is needed in the organisation and the prospect of auditing in Nigeria. Modern changes in the traditional role of auditing and its method of implementation were evaluated. For the purpose of this study questionnaires were administered in Setraco Construction Company, Patani and primary data were generated from it. And secondary data were obtained from articles, newspapers, business reports, textbooks and published reports. And analysis of data involves applying simple percentage to data collected and chi-square test of hypothesis was done to produce a more retained result, from which conclusion was draw. This study was concluded with recommendation based on the result of analysis and experience in the field.
TABLE OF CONTENTS
Title Page i
Approval page ii
Table of contents v
1.1 Background of the study 1
1.2 Statement of the study 3
1.3 Purpose of study 4
1.4 Research question 4
1.5 Hypothesis 5
1.6 Significance of study 6
1.7 Scope of study 6
1.8 Limitation of study 6
1.9 Operational definition of terms 7
Review of Related Literature
2.1 Introduction 9
2.2 The concepts of sales promotion 9
2.3 Objectives of advertisement 10
2.4 Advertisement and sales promotion 12
2.5 Decision areas when developing 15
2.6 The effect of advertisement 15
2.7 Factors that determine the use of sales promotion 17
2.8 Evaluation of advertisement 19
2.9 History of Globacom 24
3.1 Theoretical framework 26
3.2 Research design 26
3.3 Area of the study 27
3.4 Sampling size 27
3.5 Sampling procedures 27
3.6 Research instrument 27
3.7 Data collection Method 27
3.8 Method of data analysis 28
Presentation and data analysis
4.1 Introduction 29
4.2 Data presentation 29
4.3 Testing of hypotheses 41
Summary of findings, conclusion and recommendations
5.1 Summary of findings 46
5.2 Conclusion 46
5.3 Recommendations 47
1.1 Background of the Study
In every enterprise, decisions are made about how ro maximized the use of resources. The resources includes raw materials, finance and time, which are limited in supply. These economic resources are taken into consideration through the publication of financial statements. Generally, the financial statements are prepared internally to show the result of operation of the enterprises during a given accounting period.
The question that arises is how the financial statement prepared by the management will be accepted to the owners of the business, to creditors, government and other who may need to rely on them.
The fact is that, if the financial statements are not certified as correct by an independent competent professional, who has no interest in the business enterprise, the financial statement may be viewed with doubt and this may hinder the success and growth of the business because investors and interested parties may not be encouraged to invest their money in such enterprise. As a result of this, an independent auditor who must be competent and objective in the examination of the financial statement comes into play.
According to Saba and Nwalado (2006:12), an auditor should exercise his profession with independent and objectivity. He must be in a position to give an honest and unbiased opinion. He examines the financial statement and gives his own opinion on the true position of the enterprise, which the investors rely on for their investment proposals. In the light of this, auditing bridge the credibility gap in validating the authenticity of the financial statement.
Adams (2006:20) , opined that auditing is a process carried out by suitable qualified auditors during which the accounting records and the financial statements of an enterprise are subjected to examination by independent auditors with the main purpose of expressing an opinion in accordance with his terms of appointment. According to the operating procedures of Nigerian Guidelines (1993) auditing is an independent examination and expression of an auditor in pursuance of the objective of auditing.
This research is therefore aimed at highlighting the general background and concept of auditing. Attention will be focused in the terms and techniques used in auditing profession.
This good accounting and financial reporting aid society in allocating its resources in the most efficient manner and contribute immensely to the success and growth of business while inadequate accounting and inaccurate reporting conceals waste and inefficiency.
1.2 Statement of the Problem
In this research study, the researcher will reflect on these problems affecting the role of auditing in the Nigerian economy.
The role of auditing in business enterprise has been subjected to various degree of value judgment by various people who may have found themselves at one time or the other involved in audit work without the relevant background knowledge of auditing. As a result of this, the researcher intends to discuss certain audit related problems, such as:
i. How auditing lead to the growth of business enterprise
ii. What value does auditing add to the growth of business enterprise?
iii. Why it is necessary to have audit department in business enterprise?
1.3 Objectives of the Study
The ultimate purpose of this study is to understand the role and importance of auditing and to make useful recommendations where necessary towards the improvement of it policies.
This study is also aimed at highlighting and educating the general public on the roles and importance of auditing.
The objectives of this research can be categorized as follows:
i. To evaluate how auditing lead to the growth of business enterprise
ii. To evaluate why the audit department is necessary in business enterprise
iii. To analyze the values auditing add to the growth of business enterprise.
1.4 Research Questions
The researcher intends to ask the following questions from respondents in the accounting, store and audit department in Setraco Construction Company, Patani.
The question include:
i. Does auditing lead to the growth of the business?
ii. Is the audit department necessary for effective management?
iii. Does auditing add value to business?
iv. Are variances investigated when discovered?
v. Does auditors provide quality services to clients?
vi. Is it necessary for every business to have an auditor?
1.5 Statement of Hypothesis
To aid in this study, the following statement of hypotheses were formulated. The research hypothesis includes:
i. Ho: Auditing does not lead to the growth of business organization.
Ha: Auditing do lead to the growth of business organization.
ii. Ho: The audit department is not necessary for effective management of
Ha: The audit department is necessary for effective management of
1.6 Scope of the Study
Although auditing is found in almost all manufacturing companies as it leads to the growth of the business, often scope of research can be discussed in terms of
i. The issues covered
ii. Subject studied such as people
iii. Period covered
iv. Geographical area covered
The research focuses on the role and importance of auditing to business growth with emphasis on internal and external auditing in Setraco Construction Company, Patan, Delta State. The subject studied was the staff of Setraco Construction Company from the period 2006 to 2013. The scope was limited to only this area because of the limited time and transportation costs associated with trying with to sample the view of other construction companies.
1.7 Significance of the Study
It is pertinent that, any study should have significance to both the researcher and the person who is to make use of the study. The benefactors of this study are auditors of the focused area and auditors of other construction companies.
In this research, the significance with reference to Sectraco Construction Company, Patani where the study was focused on in as follows:
a. Auditor:- This study will help the auditor
i. To find out the problem encountered by auditors which affect their performance and discovered the effectiveness of audit reports and its implementation in adequate protecting the construction fund and properties.
ii. To bring back to full flame the dwindling image of the noble profession(Auditing Profession).
iv. To restore peoples confidence and reliance on auditors report.
v. Iv. To emphasize on the need for top management compliance on auditors reports.
vi. To find out the roles played by auditing in a bid to protect the constructing fund and property.
b. Student of Auditing:- This study will help the students of auditing to see the problem that auditors encounter in the course of their duties and then prepare well in advance to over come those problems as when due.
c. Construction Companies:– This study will also help construction companies to ensure proper accounting of the companies income and expresses and effective management through audited financial statement.
d. Investors:– This study will also help investors to know when to invest in construction companies, since their decision to invest will rely on the audited financial statement of the company.
1.8 Limitation of the Study
In the course of conducting this investigation, the researcher encountered multiple obstacles, chief among these are:
a. Finance:- This is a common toe of students. For a student who could not lay hands on reasonable sum of money to use in carrying out the project (typing and cyclostyling, distributing and collecting of questionnaire), the storage of fund became an obvious impediment.
b. Time frame:– A research of this nature which is expected to produce far reaching results would certainly have required more time to make an in-depth investigation possible. But since the study has to be submitted within a specific time, the researcher has to utilize the much time available to him.
c. Poor Responses:– The researcher also observed that the study was hampered by poor responses from respondents who usually have an erroneous impression of people who conduct research. This is due to respondents’ non-challant attitude to give information which they regarded as classified. This inevitable poor response from respondents was put into serious consideration in carrying out the research work.
1.9 Definition of Terms
Auditor:- Some one who has thorough knowledge of accounting and by virtue of his professional attainment has authority to examine the accounts of an economic entity.
Objective:- Not depending on, or influenced by personal opinion or prejudice. Having existence outside the mind based on fact or reality.
Authority:- This is the power or right to control or judge others.
Attestation:- This is the primary function of independent public accountant to attest to financial statement and to bear witnesses as to their fairness and reliability.
Fraud:- Misrepresentation by a person for material fact, known by that person to be untrue or made with reckless indifference as to whether the fact is true.
Independence:- A most important auditing standard that prohibits and auditor from expressing an opinion on financial statement, if has independence is impaired by some interest in the enterprise.
Auditing-in-Depth:- A procedure by which the auditor traces a particular transaction from the beginning through the accounting system to the end.
Continuous Audits:- An audit that involves detailed examination of accounting records at regular interval.[email protected].[email protected].