Abstract
This researches studies the challenges facing the internal auditors in public corporations. It contains useful information on the Internal Audit procedure to the entire department in the authority coming with the scope of audit function. It discusses the weaknesses in the system and suggests way of improving these weaknesses.
The recommendation contained therein if prudently implemented will go a long way in alleviating the problem passed by these weakness, facts and figures used in this research work were derived from published journals and various book use in the Authority including questionnaire.
The management should make the implementation of the recommendations contained in this research a matter of urgency, so as to remedy the weaknesses in the system.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
This research is a study of the challenges facing the internal auditors in Government parastatals. It attempts to highlight the role and functions of internal Auditor are regarded as a watchdog to the management and this whole organization. To what extent and performs the duty of a watchdog is the subject of this study.
In order to get a clear picture of the role of internal Auditor is an organization Vis-a-vis the challenges facing his research effort is directed at drawing the distinction between internal Auditor and external Auditor in terms of responsibility. Scope of work and their approach to work, it is therefore, hope that this study will give an insight into the role of internal Auditor in Government parastatals in general and NPA in particular and also serve as reference for those who intend to conduct research in similar fields in future.
The history of the Nigerian port Authority dates back to time of slave trade or the colonial masters when the port/territorial waters in 1862, a department known as Marine department they had regional headquarters established and located at the following places.
Lagos colony marine -1862-Lagos southern Nigeria marine -1993 –calabar but later transferred to Akasa in 1902 Northern Nigeria Marine -1900 – Lokoja I 1960 two of the regional headquarters i.e. Lagos colony marine were merged to become southern Nigerian Marine.
In 1908, a separate Government department known as port Department was formed to take charge of civil engineering works in Lagos and Port Harcourt ports. This was followed with the creation of the Nigerian marine in 1914 with the two regional Head Quarters as founding members.
1.2 STATEMENT OF THE PROBLEM
This major concern of internal Audit is to identify the challenges faced by this corporation, the internal Audit department is charged with the responsibility of monitoring the operating efficiency and compliance with the authority policies and also to enhance management confidence in the reporting performance of the operating unit of the cooperation.
What is needed of the internal Audit department is to safeguard and protect cooperation’s asset, and to have an independent mind free from the subjective opinion of managers concerning the performance of individual operating department and to ensure the effective and efficient discharge of duties of the operating unit.
More so, another challenging area is how to secure the completeness and accuracy of records of the operating unit in adhering to management policies.
1.3 OBJECTIVES OF THE STUDY
The objectives of internal audit very widely are dependent upon the responsibilities assigned to it by management. The size and structure of enterprise the internal staff and the skills and experience of the internal auditors, normally however, internal auditor operates in one or more of the following broad areas.
1. Review of accounting system and related in internal controls.
2. Examination of financial and operating information for management including detailed testing of transaction and balances.
3. Review of the economy, efficiency and effectiveness of operations and functioning of non-financial controls.
4. Special investigations.
1.4 SIGNIFICANCE OF THE STUDY
The study is intended to:
1. Serve as quite for any other researcher who want to carry a work on this topic
2. Benefits the managements of the organizational seeking orderly manner of discharging duties effectively.
3. Create new audit work that is possible to provide more enlighten on the internal audit work.
1.5 SCOPE AND LIMITATION OF THE STUDY
The research is limited to the chapter and id affected by the financial and academic constraints. The period for submission and the forth coming final examination could not allow for more periods for research and moreover, the suggested title of the internal audit department. Its covers a wide spectrum of the work done by one State of the department in Lagos head office RORO port, tin can –island, and Papa ports.
This researcher has carefully excluded the activities that do not come strictly within the range of internal audit function. The scope of this research also includes major revenue sources and expenditure with emphasis on the control built into the system with a view to ascertaining the effectiveness of such controls.
1.6 RESEARCH QUESTION
The following questions were sought to be answered in the course of the study.
1. The sex Male/Female?
2. Do you have internal audit department in your company?
3. How in your opinion is the role of internal audit in the internal control system in an organization?
4. Do you accept that internal audit is a major factor for the management in checking the company policies with the duty discharge?
1.7 RESEARCH HYPOTHESIS
The following hypothesis is formulated using Nigeria part authority as a case study. Ho represented null hypothesis and Hi represent alterative hypothesis as show below:
Ho: Internal audit has no significant responsibility (problems in the detection and prevention of financial misappropriation in the public sector.)
Hi: Internal audit has significant responsibility (problems in the detection and prevention of financial misappropriation in the public sector.)
1.8 OPERATIONAL DEFINITIONS OF TERMS
Internal Control: this is the whole system or control financial or otherwise, established by the management in order to carry on the business of a company safeguard the assets and secure as far as possible the completeness accuracy and reliability of tis records.
AUDITOR TRIAL: this is the means by which individual transactions can be traced sequentially through the system from source to completion.
ERROR: this unintentional mistake it can be of any of a multitude of kinds, mathematical or clerical or in application of accounting principles.
EVALUATION: this means considering carefully how good the system in use are selected to the need of the business and as such suggesting improvements.
VERIFICATION: this is the means of obtaining evidence of the existence and ownership or assets and the confirmation of the liability of the business. I.A.D: internal Audit (underline).
CHAPTER FOUR
DATA ANALYSIS AND PRESENTATION
This chapter explain the procedure used in carrying out hypothesis or significant testing. The result of hypothesis testing could possibly be in different ways namely:
Non rejections of a true hypothesis are correct decisions. Rejection of a false hypothesis is a correct decision, rejection of a true hypothesis an incorrect decision. This is known as a Type I error. Non rejection of a false hypothesis an incorrect decision. This is knows as a type 1error. Non rejection of a false hypothesis an incorrect decision. This is known as type II error.
Obviously, efforts are made to avoid of error but it is possible to make a correct decision with 100% certainly when a hypothesis is tested by sampling, there is always possibility of either a type I or type II but not both. Therefore, various levels of significance are chosen, most commonly 5% or 1% and thus the result of a particular test might be said that the difference between a sample mean and the hypothetical population mean is significance in which both fails of the T distribution at the four figure table is concerned was used 1% level of significance was used because it is a mare severe lest than the 5% level.
Therefore, for two fail test at 1% level at significant, null hypothesis HO is accepted where the confidence level Z is within + 2.58 and anything otherwise or rejected.
4.1 DATA ANALYSIS
Statistics deal with quantitative data, statistical analysis is a scientific method of a analyzing masses of numerical data so as to summarize the essential features and relationship of the data in order to generalize from the analysis to determine patterns of behaviors particular out comes or future tendencies. Statistical analysis seeks to provide summary measures which describe the important characteristics of a distribution are:
a. Average: the most important measure of central tendency is the arithmetic mean. The arithmetic mean is calculated by the following:
Where N is the number of values when the data are arranged in a group frequency distribution, the formula is:
Where F is the number of value in an interval and the midpoint of the class interval. The mean leads itself to subsequent analysis because it includes the value of all items. However, it may not coincide with actual value and may in some curriculum be unrepresentative because of the effect of extreme values.
From the above mean are approximately 3. It implies that all the respondents, support the reason that there has been a growth in internal audit to improve the efficiency management control system.
Under charges of customer deleted and recovered from checking of debit note 1999.
TABLE II -1999
| Parts | Naira (N) N’ 000
| Dollars ($) $’000 | Pound ∑ ∑’ 000 |
| Lagos part complex | 1,375, 235.54 | 150,190.72 | ___ |
| Tin can island part | 32, 731.01 | 13,408. 74 | ___ |
| Container terminal | 63,563.08 | ___ | ___ |
| | 1,731, 242. 54 | 164, 182. 46 | ___ |
TABLE III – 1999
Over payment to contractor deleted by audit in 1999
| Parts | Overpayment N’ 000
| Recoveries N’ 000
|
| Lagos part | 3, 876. 50 | 3, 876. 50 |
| Complex Tin can island part | ___ | ___ |
| Container terminal | 26, 878. 72 | 26,878. 72 |
| Head quarters | 1, 812, 481. 59 | 1,843, 236. 81 |
| | 1,843, 236. 81 | 164, 236. 81 |
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