1.0 Introduction
1.1 Background of the Study
The Auditor as an Indispensable Part of a Profitable Business Organization
Due to the problem that arrives from the shareholding employees, investors and other body urgencies in the act of been doubting on report presented to them, an auditor will be of good help because it serves as an inappeasable a profitable business organization.
However, the auditor is regarded as the eyes and ears records of the organization in order to encore that the financial statement are a reflection of the affairs of the organization as appeared in these records. Since this records are summary of generation for a specified period. The auditor also goes behind these records to the source document in other to confirm the accuracy, completeness and validity of the records transaction.
According to A.W. Honliness (1959) p.21, he stated that “there is a requirement that all registered limited liability companies must have their financial records audited annually by a firm of auditors so appointed.” He further stated that the law concept compel the auditor to express his opinion to the authoritative, the auditor must be seen to be independent.
The duty of preparing the financial statement is placed on the directors, white that of reporting is on the auditor who is responsible to the shareholders all these are aimed towards achieving project in the business organization. Finally, Rogers Adams rightly defined auditing as “the independent examination of and expressing of opinion on the financial statement of an opinion on the auditor practice committee (APC) 1989. This opinion is expressed in the form a report. The person who carries out such examination is known as an auditor.
1.2 Statement of the Problem
For the purpose of protecting the shareholders interest, investors and to make sure that there is no room for mismanagement and improprieties of funds, the auditors is appointed to act as eye and ear or watch dogs towards these activities. The auditor is an accounting expert that is independence of the company’s management.
The problem now is, if the auditor is not responsible for not uncovering fraud act, such duties belong to the management and are only a subsidiary duty to him. How does he give assurance to the various users of final accounts that the financial statement represent a true and fair view of the company. If the auditor is not relevant in uncovering fraud, he is probably not relevant to the company at all. Public expectation is that auditor should and must discover fraud.
1.3 Aim and Objectives of the Study
The aim of the study is to investigate the Auditor as an Indispensable Part of a Profitable Business Organization using Union Bank as a case study. In achieving this aim, the following specific objectives were set out as follows:
- To ascertain the impact of audit on business.
- To examine the performance of accounting system in business organization, if it is up to standard.
- To examine if a good internal control is being practice in the business.
- Identify the problems organization face as a result of the introduction of audit.
- To examine the facts contained in the audit of business finance.
1.4 Significance of the Study
The following are the relevance of the study:
- Business organization will through this research work, improve on their performance since the researcher will let the public know all that in required of the guidelines.
- Fraud identification: The significance is to identify frauds misappropriation or embezzlement of business fund usually in the form of cash or of its other assets.
This study will be of immense benefit to other researchers who intend to know more on this study and can also be used by non-researchers to build more on their research work. This study contributes to knowledge and could serve as a guide for other study.
1.5 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- Does auditing help to minimize fraud in Union Bank?
- Does auditors opinion assists management decision making in Union Bank?
1.6 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
Hypothesis One
- H0: The Auditor is not an indispensable part of a profitable business organization
- H1: The Auditor is an indispensable part of a profitable business organization
Hypothesis Two
- H0: Auditing is not a mirror of shareholders investment and the turn over achieved in Union Bank
- H1: Auditing is a mirror of shareholders investment and the turn over achieved in Union Bank.
1.7 Scope of Study
This research work covers the facts contained in the business finance auditing and organization welcome the auditing processes, the impact the auditing have made so far and problem facing the organization as a result of this business organization finance.
1.8 Limitations of the Study
During the course of this study, many things militated against its completion, some of which are:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Establishment Policies: Establishment policies posed a serious limitation as most staffs are not ready to release information needed for this project work. There were lots of information needed from the staffs of this institution to enhance the study which took them time to release or they did not release at all for security purposes, hence the scope was reduced.
- Research material: availability of research material is a major setback to the scope of the study.
- Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
1.9 Definition of Terms
- Fraud: It is used to refer to irregularities obtain an unjust or illegal benefit.
- Audit Evidence: This audit evidence on information obtained by the audit in arriving at the conclusion on which he bases his opinion on the financial statement
- Review of Financial Statements: The auditor should carry out such review of the financial statements as is sufficient, in conjunction with the conclusion draw form the other auditor evidence obtained, to give him a reasonable basis for his opinion on the financial statements.
- Accounting Evidence: The auditor should ascertain the enterprises system of recording and processing transaction and asses its adequacy as a basis for the preparation of financial statements.
- Letter of Engagement: This provide the auditor with an opportunity to place on record the understanding of the responsibilities management in relation to internal control and fraud and at the same time define the auditor objective and responsibilities.
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