WeCreativez WhatsApp Support
Welcome! My name is Damaris I am online and ready to help you via WhatsApp chat. Let me know if you need my assistance.
  • Format: PDF & MS-word (doc)
  • Pages: 58
  • Chapter 1 to 5
  • With abstract reference and questionnaire
  • Preview abstract and chapter one below

 3,000

Internal Audit and Effectiveness of internal control system (a survey of selected firms in Rivers State)

TABLE OF CONTENT

Title page

Approval page

Dedication

Acknowledgment

Abstract

Table of content

 

CHAPTER ONE

1.0   INTRODUCTION 

1.1        Background of the study

1.2        Statement of problem

1.3        Objective of the study

1.4        Research Hypotheses

1.5        Significance of the study

1.6        Scope and limitation of the study

1.7       Definition of terms

1.8       Organization of the study

CHAPTER TWO

2.0   LITERATURE REVIEW

CHAPTER THREE

3.0        Research methodology

3.1    sources of data collection

3.3        Population of the study

3.4        Sampling and sampling distribution

3.5        Validation of research instrument

3.6        Method of data analysis

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS AND INTERPRETATION

4.1 Introductions

4.2 Data analysis

CHAPTER FIVE

5.1 Introduction

5.2 Summary

5.3 Conclusion

5.4 Recommendation

Appendix

 

Abstract

This study was on Internal Audit and Effectiveness of internal control system (a survey of selected firms in Rivers State).  The total population for the study is 200 staff from University of Rivers state was selected randomly. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made up auditors, HODs, senior staff and junior staff was used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies

Chapter one

Introduction

1.1Background of the study

companies in the world face very different challenges, such as globalization, rapid development of technology, industry and business, as well as the risk and complexity of information and data management. With these changes, the risks, including the fraud risks faced by the organization or the company are increasing substantially (KMPG, 2006).

In response, the company is now more aware of the need for a proactive

method of fraud prevention and detection to minimize potential fraud risks

(Falcon Fraud Manager 2008, Entrust, 2008; Stream Base, 2008, in Edge

and Sampaio, 2009).

There have been several cases of Financial Statement Fraud in the last decade (eg Enron and WorldCom in the United States; Lippo Bank, Kimia

Farma and Indofarma in Indonesia). FSF generates huge losses for market

participants, including investors, creditors and employees.

What is fraud? According to Keller and Owens (2015), there are two categories of fraud, internal and external. Internal fraud is done by insiders,

such as employees and directors. External fraud is done by people outside

the company, like vendors. Internal fraud can be divided into two categories, such as:

  1. Misappropriation of assets
  2. Fraud on the financial statements

Fraud on financial statements involves cheating on journal entries and authorization managers who can take advantage of journal entries in accounting information systems (Debreceny and Gray, 2010).

There has been a high record of business failure in the world today; and this usually is as a result of management inefficiency in the area of prevention and detection of fraud and other irregularities. Managements of businesses have taken several measures to combat this problem. Some of these measures among others include: the establishment of –

Internal Control System (ICS);

Internal Audit Unit (IAU);

Total Quality Management (TQM);

Team Building; and

Organizational Control processes such as policies and procedures

Internal control system is seen as a means of monitoring every other control system in a business organization and it is considered as the most important measure that needs to be strengthened in order to ensure business success.

Internal auditors as an instrument in the hand of the management, and through the Internal Audit Unit (IAU), have been making effort in ensuring the effectiveness of the Internal Control System (ICS), monitoring of every other control measure put in place by the management as well as the pursuance of the actualization of the organizational goals and objectives.

Internal auditors, in discharging their responsibilities, are facing some challenges which make their work so rigorous and contribute to the failure of the Internal Control system (lCS) objectives and the overall business organization) goals and objectives. The questions here are;

How are the internal auditors able to discharge their duties in ensuring Internal Control System effectiveness?

What are the challenges facing internal auditors in discharging their duties?

And, what must be done address the problems of internal auditors in ensuring business success?

Internal auditors· have been playing a very great role in contributing to management effectiveness and efficiencies; and therefore seen as the pillar upon which the Internal Control System rest.

1.1   STATEMENT OF PROBLEMS

Internal Control system’s failure is the key problem to most of the failing businesses. This usually is as a result of management failure in setting up a strong Internal Control System; ineffectiveness of the established Internal Control System or non-issuance of absolute power to internal auditor in ensuring its effectiveness. This has made several businesses to have records of low productivity; poor product quality; low sales record: false/unfair account statement; poor business performance as well as slow growth rate which in turn contribute to greatly to business failure. The following are some of the factors challenging the functionality of the internal auditors;

Incompetency/Negligence of internal auditors;

Failure to separate the Internal Audit Unit (IAU) from accounting department

Internal auditor’s involvement in fraud

Management involvement in fraud

The role of godfather/Abusive use of authority

Internal auditor’s independence level

Internal auditors’ motivations/remuneration.

Objective of the study

The objectives of the study are;

  1. To know the role of internal audit and a good internal control system in order to reduce the likelihood of accounting fraud
  2. To know factors contributing to the challenges of internal auditing in selected firm n Rivers state
  3. To know whether internal auditing and good internal control systems can reduce the likelihood of accounting fraud in some selected firm in Rivers state

Research hypotheses

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H0: there is no role of internal audit and a good internal control system in order to reduce the likelihood of accounting fraud

H1: there is role of internal audit and a good internal control system in order to reduce the likelihood of accounting fraud

H02: internal auditing and good internal control systems cannot reduce the likelihood of accounting fraud in some selected firm in Rivers state

H2: internal auditing and good internal control systems can reduce the likelihood of accounting fraud in some selected firm in Rivers state

Significance of the study

Owners, who are the investors and the providers of capital of businesses, have suffered from different forms of problems as a result of management inefficiency (ices); and of which has been the reason for failure of some prospective investors from investing their resources on businesses today. Some of these problems include;

  • Loss of invested fund and request for fund (money) on liquidation, arising from total business failure upon which the investors may be called to provide more· fund in setting the business indebtedness to its creditors;
    • Non-declaration of/inconsistent dividend payment as a result of poor business performance; and
    • Poor growth on capital and continuous falling in market share due to management incompetence and other irregularities surrounding business operation.

The study will give a clear insight on the Internal Audit and Effectiveness of internal control system. The study will also serve as a reference to other researcher that will embark on the related topic

Scope and limitation of the study

The scope of the study covers Internal Audit and Effectiveness of internal control system. The researcher encounters some constrain which limited the scope of the study;

  1. a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
  2. b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

 Definitions of terms:

  • Auditing: The independent examination and expression of opinion on, the financial statement of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with the any relevant statutory obligation.
  • Adequate Control: Present if management has planned and organized (designed) in a manner that provides reasonable assurance that the organization’s risks have been managed effectively and that the organization’s goals and objectives will be achieved efficiently and economically.
  • Board: A board is an organization’s governing body, such as a board of directors, supervisory board, head of an agency or legislative body, board of governors or trustees of a contained within the risk tolerances established by the risk management process.
  • Engagement: A specific internal audit assignment task or review activity, such as an internal audit, control self-assessment review, fraud examination, or consultancy. An engagement may include multiple tasks or activities designed to accomplish a specific set of related objectives.
  • Finance: This is the activity that involves provision of fund or money to where and at when needed.
  • Fraud: Any illegal act characterized by deceit concealment or violation of trust. These acts are not dependent upon the threat of violence or physical force. Frauds are perpetrated by parties and organizations to obtain money property, or services; to avoid payment of loss of services; or to secure personal or business advantage.
  • Government: The combination of processes and structures implemented by the board to inform, direct manage and monitor the activities of the organization toward the achievement of its objectives.
  • Management: This is the process of the organizing and controlling of the affairs of a business or a sector of a business.
  • Risk: The possibility of an event occurring that will have an impact on the achievement of objectives. Risk is measured in terms of impact and likelihood.
  •   Standard: A professional pronouncement promulgated by the Internal Audit Standards Board that delineates the requirements for performing a broad range of internal audit activities, and for evaluating internal audit performance.

GET THE COMPLETE PROJECT»

Do you need help? Talk to us right now: (+234) 08060082010, 08107932631 (Call/WhatsApp). Email: edustoreng@gmail.com.

Disclaimer: This PDF Material Content is Developed by the copyright owner to Serve as a RESEARCH GUIDE for Students to Conduct Academic Research.

You are allowed to use the original PDF Research Material Guide you will receive in the following ways:

1. As a source for additional understanding of the project topic.

2. As a source for ideas for you own academic research work (if properly referenced).

3. For PROPER paraphrasing ( see your school definition of plagiarism and acceptable paraphrase).

4. Direct citing ( if referenced properly).

Thank you so much for your respect for the authors copyright.