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The Role Of Internal Auditor In Public Organizations ( A Case Study Of UNTH Enugu)

Chapter one of The Role Of Internal Auditor In Public Organizations


For efficient management of the resources and the maximization of returns, the management of an organization has to set up some internal control system to assist regulating and directing the activities of the organization.

The statement of auditing standards, number includes the following definition of internal control

Meanwhile, internal control has been defined by the institute of chartered Accountants of England and Wales as “All forms of control both financially and otherwise established by management in order to carry on the business of an enterprise in an orderly and efficient manner, to safeguard its assets, to ensure adherence to management policies and to secure as far possible the accuracy and reliability of its records. In the same vein, internal control is defined as the means employed within an organization’s policies, plans , and procedures and remedy, so far as possible , any errant performance.

These brief comments should suggest that a system of internal control consist of all measure employed by a business for the purpose of: –

1. Safeguarding resources against waste, fraud, and inefficiency

2. Promoting accuracy and reliability in accounting and operating data

3. Encouraging and ensuring compliance with company policy

4. Judging the efficiencies of operation in all dimension of the business

Thus, very large organizations (and some small ones) have found a need for internal audit in addition to an external audit. Internal auditors are employees of the organizations and work exclusively for the organization. Their functions partly overlap those of the external auditors and in part are quite different.

The premises functions of external auditors are either laid town by status or embodies in a letter of engagement. The functions (which are rarely precisely laid down) of internal auditors are determined by management and very greatly from organization to organization.

There is an auditing guideline- guideline for internal auditors issued in June 1990 where internal audit was defined as  a service  to the organization.

It objectively examines, evaluates and report on the adequacy of internal control as a contribution to the proper, economics, efficient and effective use of resources.

Internal auditors are employees of the firm and thus independences is not always every to achieve. However, it can be assisted by having the scope to arrange its own priorities and activities, having restricted access to records, assets and personnel.

Freedom to report to higher management and where it exists to an audit committee.

Internal control in present day escape embark all department and all activities of a business concern. It includes the methods by which top management delegates’ authority ends assipin responsibility for such functions as selling, purchasing accounting and production. It also includes the programme for preparing, verifying and distributing the various levels of supervision. Those current reports and analysis which enable executives to maintain control over the variety of activities and function which constitute a large corporate enterprise.

This definition possibly is boarder than the meaning sometimes attributed to the term. It recognizes that a “system” of  internal control extends beyond those matters which relate to the functions of the accounting and financial department.

The broad definition of internal control may be conveniently summaries by stating that internal control is the means by which management obtains the information, protection and control that are vital to the successful operations of a business

Control is necessary to ensure that management policies and directives are properly adhered to. Management is far removed from the scene of operation in the typical large business, and personal supervision of employee is impossibility. As a substitute, management must rely on various control techniques to implement its decisions and goals.

These brief comments suggest that good internal control is a key factor in the effective management of business enterprises. Internal control is also the means by which management can discharge its primary responsibility for the reporting of adequate and accurate financial and operating information to which interest parties as stockholders and creditors. Management has recognized internal control as a valuable tool in effective carrying out it responsibilities and auditors have pressed for improvement in  internal control of their efforts to be of assistance to management, as well as to permit reduction in audit work made possible by the concomitant increase in the credibility of the accounting records. The effect of auditing has been to reduce the need for routine, mechanical , verification of book- keeping accuracy , permitting substitution of a less time consuming approach that involves reasoning and judgments and stressing such activities as review , analysis, evaluation , and statistical sampling.

A part from the work which the internal auditors should do themselves if they encounter weakness in the system of internal control, it is good practice for them to advise management, proffer the management in the discharge of its obligations and control and safeguard the assets of the company.

SAS 300, requires auditors, to obtain an understanding of the accounting and internal control system sufficient to plan the audit and develop an effective audit approach.

In planning the audit, to obtain and document an understanding of the accounting system and control environment sufficient to determine their audit approach.

If after obtaining and understanding of the accounting systems and control in an accounting balance or class of transaction and that could be immaterial either individually or when aggregated with misstatement in other balances or detect and connected on a timely basis by the accounting and internal control system.

A satiable point from SAS 300, that regardless of the assessed levels of inherent and control risks, auditors should perform some substantive procedures for financial statements assertions of material account balance and transactions class “in this case possible omission of sales is a material matter and the auditor will need to perform some substantive tests as well as testing the controls.


Often times, management of public organizations via UNTH  have problems with internal control and maintenance of discipline. This brought about by low level of management education and willingness to adhere to the theories and practices of management .most organization are not well structured . there is overlapping of junctions and definitions of functions


This study intends to achieve the following aims and objectives

1. Examine the role of the internal auditors in UNTH

2. To find out what extent their role conform, to the accepted standard

3. To see if they are given the appropriate organizational status and necessary backings to enhance their functions and

4. To see how they overcome what problems they have.


This research will be mainly limited to UNTH Enugu. It is meant to cover the whole public organizations in Nigeria. This research but thin is done without some limitations.

This method used in collecting data is by interviewed are lectures, internal auditors, (In practicing firms) and audit staff.

More so the rules and principles guiding auditors and the profession in the country is the same throughout. As a result of this, the researcher has decided to use or interview auditors in Enugu, and so many places for the purpose of guiding this profession.


In an attempt to study the roles of internal auditors in public organization the following research question were formulated

1. How does the internal auditors function under unstructured organization where there are over lapping of functions?

2. How is the role of internal auditors appreciated?

3. Is he responsible closely established management or statutory provisions

4. Does he have the adequate authority to form his duties?

5. Does he have the essential independence?


This study  when completed will show the role of the internal auditors in public organizations, the problems associated with their work and how they have over come it or how they  are coping with most important, the study will show what the ideal role is of internal auditor ought to be in public organization.



Describes the format of organizational communication between those who are working for closely related operational objectives where delegation of execution , though not of responsibility, has occurred, this , the chief executives of a group of companies may delegate to the chief executive of a subsidiary company the operation of that subsidiary company


Describe the formal , organizational communication which exists between those who are working within the same area.


Is auditing which concentrates on seeking out aspects of operation in which waste, inefficiencies and excessive costs would be subjected to reduction by the introduction or improvement of operating control.


An auditor is a competent impartial critic appointed to verify a financial or other statement of account and to satisfy himself of that the statement exhibits a correct view of the affairs of the organization


An independent appraisal function established by the management of an organization for the view of internal control system as a service to the organizations. It objectively examines, evaluates, and reports on the adequacy of internal control as a contribution to the proper , economic, efficient and effective use of resources.


Can be defined as that sector of the economy established and operated by the government or its agencies, distinguishable from the private sector, and organized on behalf of the whole citizens.


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