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 auditor 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 impact of internal auditing on corporate management of Falcom Nig. Ltd.
- To know how lack of information in Falcom Nig. Ltd 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 impact 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 independent 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 titled “the impact of internal auditing on corporate management” attempts to determine the ways by which internal auditing has impacted corporate 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 who 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 (auditor) attempt to make enquiry, 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 the impact of internal auditing on corporate management using Falcom Nig. Ltd. as a case study. The study is meant to cover the whole Falcom Nig. Ltd since studying the organization as a whole would entail sampling data from both their head office and other collected from the chosen branch would form 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 a 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
This is a type of audit that is performed within the organization and it is done on a continuous basis unlike external audit that is done once (1) in a year.
Internal audit can be defined as an independent examination of, and expression of opinion on the financial statements of an enterprise by an auditor working within the enterprise.
: 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.
An independent criterion appointed to verify and investigate the books of accounts and vouchers of a business prepared by others. He approaches his tasks in a critical frame of mind; Mejia Mejia (1982:22). An auditor is someone that is a member of one of the recognized Accountancy bodies resident in Nigeria and who is a carrying out a professional accounting practice.
this refers to all the relevant and reliable data obtained and recorded by the auditor which is sufficient to help him in arriving at conclusions on which he bases his independent opinion on the financial statements.
True And Fair View:
This means items in the accounts taken individually or collectively do not present a fair view if they are misleading.
An audit arrangement that is conducted by an external auditor. It is an independent appraisal examination of financial statements of an enterprise by an appointed auditor in compliance with any relevant statutory authority.
A crime of obtaining money by deceiving people.
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.