The Significance and Objective of Source Document in Auditing and Investigation (a Case Study of P. Z. Cusson Plc Aba)



The term “source document” is a familiar term with those involved in keeping accounting records or watch dogs of Limited Liability and public liability companies or organizations from time to time, most often on annually basis both internal and external auditors are called to examine the accounting records kept by their client. They do this by studying and evaluating the internal control system in the company and also examine the source document of every transaction done by them. The objectives of this work is to highlight the significance and objectives of source documents in auditing and investigation. An empirical study was conducted for the purpose in P. Z. Cussons Nig. Plc, Aba. The researcher also sought the opinion of practitioners through interviews and questions. The study were used to prove that the importance and significance of source documents in any organization cannot be over emphasized as they form part of the basis of evidence in auditing and investigation. The various methodologies used to carry out this research will go a long way to encourage companies to keep their various source documents very intact for good auditing purposes. Finally recommendations were made based on the findings and outcome of the research.




Every business entity profit – oriented, most liability companies are established for profit maximization and charitable or non – profit organizational such as parastatals are established to subsidize cost for governed.

However, it is pertinent to note here that for whatever reason each was set up, proper accounting records must be maintained.

Accounting is broadly defined as the process of recording, classifying, analyzing, summarizing and interpreting of business transactions in a systematic and concise manner so as to give detailed explanations to related parties that are interested in the financial statements.

For this record to be properly kept, it must follow the norms, principles, conventions and standards set out by the governing body of the Nigeria Accounting Standard Board (N. A. S. B), and the International Accounting Standard Board (I. A. S. B).


          Section 357 of the Company and Allied Matters Decree (AMD) makes it compulsory for every limited liability Company to appoint an auditor to examine it’s financial records.

It will be good at this point to know who an auditor is.

          According to Bigg, (1972) in his book “Practical Auditing defined an auditor as a person appointed by the directors of a accompany to examine its books of account, and to state whether it gives a true and fair view of the financial position of the entity and also that there is compliance with, statues and that accounting standards are strictly adhered to based on the above explanations of who an auditor is, the auditor should be a professional and used in accounting filed, with high integrity, profile and must be licensed to practice.

          In Nigeria today, the institute of Chartered Accountants of Nigeria (ICAN) takes care of this.

If the auditor as a professional is aware of the fact that his work is relied upon by related third parties, he owes it a duty so as not to expose himself to liability associated with negligence out of misfeasance proceeds.

          In the light of the above, for the auditor to accept assurance or to give an opinion, he must certify himself beyond all the information given to him that it gives a true and fair view of the financial positions of the entity as to the date of the audit.

          In these regards, he has access to all the company books and also the unreserved rights to question mal- administration and to collect all the information that will enable him carry out his work successfully.

          However, for the auditor to formerly accept assurance his basis of acceptance must be dependent on the availability of reliable source documents.

          At diverse levels of examination, associated source documents check and tests, evidence shown must be very authentic and satisfying.

          The investigation process involves making independent confirmation with regards to all the related third parties to the entity in question.

So many factors such as cost consideration, time factor distance etc would act as hindrances, but it does not mean that the auditor will not do his professional work, where he fails to carry out his work as expected of him, he will be faced with no other things than liability.

Some of such cases includes CAPRO industries Victman (1989). Also see security paretic business credit versus Deat Marwick Wal & Co.


          This study is designed to determine how the proper keeping of source documents used during audit investigations has helped the entity in question to have attained to such a great height.

          P. Z. Cusson Plc Aba was incorporated on the 4th day of December, 1948 under the name of P. B. Nicholas who had for some years established a factor for such a purpose.

          Peterson Zochonis and Company Limited of Manchester in England P. Z subscribed 75.5% of the company’s issued shares capital and through it’s subsidiary company retaining the controlling interest P. Z. itself was incorporated in England on 1884, became a public company quoted on the London and Northern Ireland stock exchange in 1953.

          It’s principal activities are of general merchandize in West Africa and it has been established ventures and textile in Nigeria, Ghana and Sierra-leone, while selling in the United Kingdom.

          In 1952, Mr. P. B. Nicholas sold out his interest in the company to P. Z. two years letter the company changes its name to Alagbon industries Limited and in 1960 adopted the name associated Industries Limited. During the same year, the company achieved its first indigenous Nigerian equity participation and by the end of 1972 it had sold 40 percent of its share capital to indigenous Nigerian.

          In accordance with the federal government directives (indigenous act) it sold 20% of it share to Nigeria in 1976, thus ringing the equity shares participation to 60% in favour of Nigerian following the Merge P. Z. and Co. Nig. Ltd.

          From Associated Industries Limited in 1976 the company changed its name to Peterson Zochonis Industries Limited. The company operated from three factories.

Firstly Ilupeju as its head office, another one at Ikorodu, also in Lagos and its factory at Aba, for the purpose of my research Aba Factory will be my focus

          Peterson Zochonis (P.Z) is into productions and manufacturing of soaps, cosmetics, pharmaceuticals and refrigeration. Their soap production includes the following;

1.       Imperial ladder

2.       Premier

3.       Robert

4.       Joy and Canoe

          There detergent includes the following:

1.       Venus body cream

2.       Venus bosy spray

3.       Sweet and Caissons body lotion and

4.       Flourish toothpaste

          Their pharmaceuticals are as follows:

1.       Roberts paractamol

2.       Zubes cough mixture

3.       Rob

4.       Malaria and super vitamin syrup

          Their refrigeration products includes:

1.       Thermocool fridges 

2.       Thermocool cookers

          The factory in Aba is where the production of soap and detergents are made, of all their plants.

The organization have five department namely;

1.       Production department

2.       Quality control department

3.       Personal department

4.       Engineering department

5.       Administration department


          Properly accounting for each and every individual transaction is extremely important. In either public or private, small or large organization, source document are very important evidence during auditing and investigation.

          Due to this, management of any organization has the obligation to ensure reliable accurate and adequate source documentation.

Performing an auditing investigation with incorrect data is one of the worst things to do.

          However, in most organization nowadays’ there is the widespread lack of reliable, accurate and adequate source objective and significance of source document when carrying out auditing investigation. Due to this reason it became necessary for the research to look into these factors affect auditing investigation, using P. Z. Cussons Plc as a case study Aba.


1.       To find out what source document are

2.       To find out what auditing and investigation mean

3.       To find out the significance and objective of source document in auditing and investigation.


          This study seeks to answer the following question;

1.       What are source document?

2.       What do auditing and investigation mean?

3.       What are the significance and objective of source document in auditing and investigation?


          The study will be restricted to P. Z. Cussons Plc Aba, so that a decisive and detailed, analysis could be carried out.

It will show the significance of source document of the firm during audit investigation. It also touches sensitive area like highlighting the extent to which the source document of the firm is reliable, accurate and adequate during audit investigation.

          To make rese reliable and valid, the sample study will cut across all categories of the organization detailing the objectives of source documents during audit exercise.


          The assumptions of the researcher in this research work are as follows:

1.       The researcher assumes that source document are very important tools that can be used in an auditing evidence.

2.       He also assume that use of reliable, accurate and adequate document are greatly affect the audit investigation.

3.       At the end of the research work the organization will see the significance of source document i.e if they have not been keeping record of it before.


          This research work will help the organization (P. Z. Cusson Nig. Plc Aba) to recognize the need of keeping proper and reliable source documents which in turn will provide them with the vital information needed for audit investigation.

          It will also be an eye opener to the researcher on how important source document is to the organization (P. Z. Cusson Plc Aba) and how they keep their source document investigation. Finally, it will also serve as a reference point for future research and for those who are willing and eager to write a very good project, with the similar topic.


Acts: This refers to the Company Acts of 1968.

Auditor: This is a person appointed by the directors of a company to examine its books of account and to state whether it gives a true and fair view of the state of affair of the entity.


          This is a statement showing the financial position of a company at a particular period.

CAMD: This refers to the company and Allied Matters Decree 1990.

Current Assets: There are assets of liquid in nature e.g bank balance, debtors etc.

Audit Evidence: This refers to the information collected for reviewing the financial transactions of a company. In addicting to its internal control practices and other essential factors required for the certification of the financial statement.

Dividend: This is an amount disbursed to members of a company out of the company’s yearly earnings.

Remuneration: This is a reward to the company’s employee.

Receipt: This is a source document used to acknowledge money received.

Cheque Counterfoil: Document used as to record the amount paid on a particular numbered cheque to the payee.

Debit Note: Source document used to correct an undercharge in the invoice credit note; source document use to correct an overcharge in the invoice.




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