1.0 Introduction
1.1 Background of the Study
The term audit is defined from the Latin word “audio” meaning to hear. The origin of an audit dated back from ancient times when the land owners allowed tenants farmers to work on their farm while the land owners themselves does not involve in the business of farming. The land owners relied on an overseer who listened to the account of the stewardship given by the tenants of the farm. According to (Johnson 1002,63) an audit is the independent examination and expression of opinion on the financial statement of an enterprise by an appointed audition in pursuance of that with any relevant statutory obligation.
1.2 Objective of the Study
The objective of the research work includes the following;
- To find out the extents to which audit department affect Pz industries Nigeria Plc.
- To know how lack of information in Pz industries Nigeria Plc affects the internal audit work.
- To determine the extent to which the independent of the internal audit work is being impaired.
- To ascertain whether internal auditing is an instrument for effective management.
1.3 Research Questions
To guide this project (six) research questions were generally formulated as follows:
- Does lack of information in industries affects the internal audit work?
- Is the internal auditor a qualified professional accountant?
- Is internal auditing an instrument for effective management in industries?
- Does the manager report consider the internal auditor?
- Is the internal audit department given a free hand in terms of running of the activities of the department and responsibilities assigned to it?
- Does inability to identify the function of internal audit department affect organization (industry)?
1.4 Statement of the Problem
The study entitled internal auditing and corporate management attempts to determine the ways by which some organization or firms has utilized internal auditing as instrument for effective management.
The internal auditor by the nature of his job is often treated with suspicion by members of staff. This places the burden on his shoulder to show his colleagues after all he is not a blood hound but one is implementing management procedures in a manner that he will help achieve the target goals and objectives of the organization. In lack of information, the internal audit has a task of receiving an authenticating financial decision taken by management. His attempt to make enquire, have in many cases placed him in a collusion course with his supervision.
It is usually observed by the auditors that there is always reliance on the part of the employed especially those concerned with recording and documentation of financial transaction and accounting for custody to assets of the business organization, to discuss freely with auditors or make disclosure to the auditors without reservation, this is because employees are totally ignorant or have little knowledge of the duties of the auditors during normal audit exercise at this, the internal auditor is not given free hand in terms of independence in the running of the activities of the department and responsibility assigned to it.
1.5 Scope of the Study
The scope of this study focuses on internal auditing and corporate management using Pz industries Plc, Aba as a case study. The study is meant to cover the whole of Pz industries Nigeria Plc since studying the organization as a whole would entail sampling data from both their head office and other collected from the chosen branch would from good representation of the whole company. Also factory of the company was chosen because of nearness and easy collection of data.
1.6 Limitation of the Study
This project work no doubt has some constraints, the major limitations are the time needed to carry out this and fund to embark on better work. This is because of the very high cost of living due to the present economic squeeze, coupled with high transport fares engaged in serious activity or exercise of this very nature definitely pose a lot of financial problems.
1.7 Definition of Terms
Internal Auditing:
This is an independent appraisal activity within organization for the review of operation as a service to management. It is a managerial control, which functions ad measuring and evaluating the effectiveness of other controls.
Corporate Management:
It is the management of companies which are registered with the corporate affairs commission and also those that are quoted on the stock exchange these companies deals with funds, belonging to outsiders (shareholders/debenture holders) and also a great deal of control has been exercised over them to ensure that public funds are not this appropriated by those in charge.
Auditing:
This is an independent examination of and expressions of opinion on the financial statement of an enterprise by an appointed auditor in pursuance of the appointment and in companies with any relevant statutory obligation.
Accountability:
This implies furnishing satisfactory records and accessibly record and explanations or actions of this have custody of power, human resources and public money and other resources.
Accounting:
This is the systematic act of recording, analyzing and interpreting the financial statement dealing of an enterprise.
Auditor:
An independent criterion appointed to verify the books of accounts and vouchers of a business prepared by others. He approaches his tasks in a critical frame of mind; this does not mean that he should assume that there are bound to be errors and inaccuracies in the account subject to his audit Mejia Mejia (1982:22).
Internal Auditing:
This is one who is concerned with the running, reviewing of routine transaction and operations and the improvement of accounting methods for effective and efficient and of the eliminating of frauds/errors. He is an employee of the organization.
Internal Control:
This is a system of controls financial and otherwise established by the management in order to carry on the business of the enterprise in efficient manner and to ensure adherence to management policies, safe guard the company's asset and accounts.
Fraud:
This means deceit or trickery in accounting constitutes any act of omission or out of a deceitful and dishonest nature in order to gain an undue advantage, this may constitute a felony. It is a criminal offense.
Embezzlement:
This is the misappropriation of the property entrusted to one's care. It involves taking money which belongs to the organization. It is punishable only by statutory law.
