CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Government organization have played a greater part in

the economic growth of any economy especially in the

Nigerian economy. The contributions they have made so far

cannot be overemphasized because their utmost aims of

establishment is to provide some vital or essential services

to improve the social and economic well being of the people.

These government organizations are mainly being

funded either by the federal or state government through

their budgetary allocations made to them yearly and they

can also obtain loans or overdraft from commercial bank as

well as subvention from government. These funds are

expected to be utilized effectively and efficiently. But in

most practices they are being misappropriated or embezzled

by some government officials.

As a result of this mis-appropriation which has

characterized most of the government organizations.

Honestly and prudently managed. The audit is expect to

show whether proper principles of accounts and audit ethics

have been adhered to and that financial statements

prepared give a true and fair view.

1.2 Statement of the Problem

In any business Organization in which allocation and

application of funds serves as a backbone for financial

activities to be carried out the following are problems in

which are bund to be encountered.

1. Embezzlement of fund by some government Officials

2. Failure to exercise due professional care and the

appropriate level of professional skepticism.

3. Overreliance on inquiry as a form of audit evidence

4. Deficiency in confirming accounts receivable

5. Failure to recognize related party transactions and

assuming internal control exist when they may not.

These and other factors contribute to problems of auditing

in government organization.

1.3 Purpose of the Study

The purpose of studying this topic is to examine the

importance problems and prospects of auditing in

government institution.

 To ascertain the problems encountered while auditing

in government establishment.

 To know if auditors exhibit enough professional

competence in conduct of their work.

 To know how effective auditing is in government

establishment

1.4 Research Questions

This research work seeks to ask the following questions

among others deduced from the purpose of the study.

 Are auditors being threatened or intimidated during

their audit work.

 Are auditors being faced with some problems during

their audit work.

 Are vital documents needed for the audit of the

organization being held from the auditors

1.5 Research Hypothesis

Based on the purpose and research questions the following

hypothesis are put forward.

Ho Financial reports submitted are not in consonance with

the transactions carried out by the government

establishment

H

I

Financial report submitted are in consonance with the

transactions carried out by the government

establishment.

Ho Treats and intimidation do not positively affect the

quality of auditors work in government establishment.

H

I

Treat and intimidation positively affect the quality of

auditors work in government establishment.

Ho Poor professional conducts by auditors do not affect

the quality of work done by auditor in government

establishment.

H

I

Poor Professional conduct by auditors affects the

quality of work done by auditors in government

establishments.

1.6 Significance of the study

Where audit principles and procedures are carried out in

government organizations the following benefits are

derived of which these work will be beneficial to the

following people and establishments:

 Government good audit work will prevent expose

fraud errors and irregularities in government

establishment.

 Auditors: will benefit by knowing the challenges facing

them in their audit work and thereafter the prospects.

 Banks; will also benefit because it will give them

insight on how to handle audit work successfully.

 Students and researchers will benefit by gaining

knowledge on the audit challenges to banks and the

prospects.

1.7 Scope and limitation of the study

This project would cover arrears such as audit

principle(s) and procedures giving as in depth analysis on

how audit work is carried out in government organizations.

Attempts have been made by the researcher to discuss

in depth the various short comings behind this operational

framework of auditing in government organization and also

self investigation carried out.

Part of the constraint encountered by the researcher

and limitations are as follows.

 Cost of carrying out the research

 Short duration of time limit dedicated on the project

 Distance and financial constraint.

 Restriction placed upon by some organization to have

access to some vital documents.

 Secrecy maintained by some government officials by

not revealing certain information which they term as

“Keep government secrets secret”.

1.8 Definition of terms

Fraud: Is a mis-presentation of data with the intention to

theft which is dishonest act involving the theft of assets and

the falsification of accounting records and financial

statements (Akpankpan 2000.126)

Embezzlement: The fraudulent appropriation of property

lawfully in one‟s custody (Kohther 1970:173)

Auditing or Audit: Is concerned with an independent

examination of financial statements and accounting records

by an independent certified or chartered accountant and

expression of an opinion by the public accountant on the

financial statements of an organization stating whether the

finance; al statements present fairly by the financial position

of the firm concerning the period covered by the financial

statement.

Auditor: An auditor is the qualified accountant who is

professionally licensed to audit or examin financial sttments

or report of business or non-business organizations.

Reference

Adeniji A.A .(2004). Auditing and Investigation 3

rd

Edition.

Lagos. Eltoda venture limited.

Leslie r. Howard.(1981). Principles of Auditing: Twentieth

Edition. Estover plymouth mac jonal and Evans Ltd

J.C. Eze. (2003). Principles and Techniques of Auditing

Revised Edition JTC publishers.