Auditing As An Instrument To Disclose Accountability In Public Owned Establishment (A Case Study Of First Bank Anambra State)

Project and Seminar Material for Accountancy / Accounting

Auditing As An Instrument To Disclose Accountability In Public Owned Establishment (A Case Study Of First Bank Anambra State)


The increasing of fraud and misappropriation of public fund and property by the bankers possess a question as to whether auditing plays any significant role towards ensuring proper accountability in the bankers. The focus of the research is to evaluate the extent Auditing helps to check or control embezzlement and misappropriation of public fraud in the bankers also discussed were the problems rendering efficient performance of the Audit Department. A general ravine of what Auditing and Accountability is all about was made. Data will be collected for the project through oral interviews of related literature the outcome of the research will proved that Auditing actually aids Accountability in the bankers and from the findings, the research will recommend the establishment of panel on the implementation of the audit report and employed qualified (professional) Accountants into the bankers. There has been an outcry of poor accountability in the public sector of Nigeria with more emphasis on FIRST BANK PLC. The researcher will be able to know that company’s funds and property are distorted to personal use. Another problem is the identification of the reason for this ugly situation and despite the fact that the accounts of these public organizations are said to be audited, there’s still an increase in fraud and misappropriation of fund and property. The objective of this work is to know the role of audit as an aid to accountably in the public sector with reference to FIRST BANK PLC. The problem facing auditors which tender their performance in FIRST BANK PLC. Regarding cot rains from all indication it can be seen that the research such as this cannot be carried out in one semester. Therefore, the time available is very limited other likely trading factors include: The inability of same officials to disclose certain reliable. Limit information, which they considered confidential, may also limit the study. The loss of transportation as a result of the incessant fined scarcity and consequent rise in price may constrain the movement of the writer. Furthermore, most of materials that may be needed for this research work are likely going to be tendered due to death of materials by government staff. In addition, the funds available to the research may not be enough as well as this risk of being on the road most frequently to search of relevant materials may be likely going to limit the study. Finally, the academic workload in the campus is one of the constrain factors on this research work.

Chapter One


1.1 Background of the Study

This is now a national issue. The increasing incidence of fraud and misappropriation of funds and property by Accounting officers and chief executive in the public sector of the Nigeria economy pose pertinent question as to whether auditing plays any significant role towards ensuring proper accountability and judicious use of fund set aside for various purposes and corporate objectives.

Some programmers and activities organized by these individuals are assumed to be done on behalf of the people therefore deserted to be assured the resources which they put at the disposal of these accounting officers are efficiently, effectively and economically managed, since it is known, that not all of us are judicious in the in the management of our private affairs and much less, the public affairs entrusted to us. A case in point is about distressed banks like continental merchant bank and Nigeria merchant bank. Poor management was the problem with these banks, if these banks hard carried out proper audit and made use of the recommendation, the directors would have reduced proper accounts of their deeds.

Accountability has clearly manifested itself as a principle to be pursued if the status quo is not to be perpetrated. Several past leaders have pledged to introduce a more responsible system of government with accountability but their subsequent conduct or governance have show that they have little or no understanding of the definition and application of accountability, hence the question of what then is accountability arises.

Accountability as it is contained in long man dictionary of contemporary English is the condition or quality of being able (that is having) to give an explanation for ones’ actions. Accountability is also defined as the management of funds and other assets of which individuals or institutions had been custodians.

Auditing is regarded as one of the more recently established professions born out of the complexity of modern business world. It became relevant so as to discourage men from erring and to expose those who erred when they give account of how they managed the funds and property entrusted to them. This account or report is usually done by means of financial statement in order to verify the true and fairness of this report, an independent person- an auditor will audit the account.

An audit is an investigation by an auditor into the evidence form which the final revenue accounts and balance sheet or other statements of an organization have been prepared in order to ascertain that they present true and fair view of the summarized transactions for the organization at the end date, so enabling the auditor to report thereon. There are more involved definitions such as; that issued by the consultancy council of accountancy of accountancy bodies (CCAB), which defined an audit as “ ….the independent examination of and expression of opinion. On the financial statements of an enterprise by an appointed author in pursuance of that appointment and incompliance with any relevant statutory obligations.

The law also makes provisions for the establishment of audit department as seen from the above definition, SEC 357 of companies and allied matters act auditors that will audit the financial statement of the company at the annual general meeting. The question now is that in spite of all these provisions and safeguards one still experiences the alarming rate of fraud and misappropriation of public funds and property by those entrusted with their safe guards. It is not surprising that great emphasis is being laid on proper auditing as means to enhance accountability in the public sector of the nations.

1.2 Statement of Problem

There has been an out-cry of poor accountability in the public sector of Nigeria with more emphasis on first bank plc. The effectiveness of an independent audit is not however limited to the added statement of creditability derived from the audit itself. There is the statutory effect of the prospective audit on employer who may be tempted to defraud their employers and or management that may find it expedient to endeavour to deceive third party users by preparation of misleading financial statements. The problem is that the funds and property of the organizations are entrusted to certain individual workers in the organization and in most cases; these individual employees are not brought under through surveillance. The result is that most of the funds and for property are distorted to personal use.
Another Problem is the identification of the reasons for this ugly situation and why despite the fact that the accounts of these public organizations are said to be audited, there’s still an increase in fraud and misappropriation of fund and property.

1.3 Objectives of the Study

The object of this study is to find out;

  1. The role of audit as instrument to disclose accountability in the government owned establishment with reference to First Bank Plc.
  2. The problems facing auditors, which hinder their performance in First Bank Plc.
  3. The roles being played by auditors towards protection of funds and property in First Bank Plc.
  4. Whether the standard of auditing has fallen in recent years.
  5. The effectiveness of audit report and their implementation to First Bank Plc. It is the supreme belief that the information collected from this study will highlight the benefits of auditing towards ensuring proper accountability in the public sector and also serve as a foundation for our regular audit.

1.4 Significance of Study

The study is significant for the following:


This study will serve as a foundation for further research on this topic to students in the school for financial studies.

Financial House:

This study will be of great important to financial house wishing to improve on their standard of operation. It will assist them in their system of internal control and so help to check fraud.


This study will help to highlight the causes of fraud and misappropriation of property and funds in the organization and provide suggestion to stop the practice. Other includes banks, professional’s bodies and infact the general public.

1.5 Research Hypothesis

To effectively conduct this research, the following hypotheses are desired to help us in our analysis.

These are as follows:

  1. Ho: Auditing, as an instrument to disclose accountability has not been more useful to first bank plc over the year.
    Hi: Auditing, as an instrument to disclose accountability has been more useful to first bank plc over the year.
  2. Ho: Effective auditing and investigation have not really minimized the rate of fraud and misappropriation in first bank plc (Nigeria National Petroleum Company.
  3. Ho: The management of first bank plc has not been implemented auditors’ reports guidelines.
    Hi: The management of first bank plc has been implementing auditors’ reports guidelines.

1.6 Definiton of Terms

The terms used makes the study more understandable, these terms are as follows:


Investigation into the evidence form which trial revenue accounts and balance sheet are prepared to ascertain true and fair view.


These are the professional persons in charge in audit.


This is the rendering of return on stewardship relating to management of fraud and assets which individual have been custodian.

Financial Statement:

This is the balance sheet of an organization showing of assets and liabilities whether there is profit or loss for the period of 1 year. (ie 12 months)

Consultative Council of Accountancy Bodies (CCAB):

Bodies, which bring laws and rules, stated for accountancy bodies.

External and Internal Duties:

Internal auditors are auditors whose primary duties is not to detect fraud but with negligence could be sure while external auditor are auditors from various firms to check on company’s record.

Operational Manual:

This is manual used in guiding operations.


This is an organization involved in every aspect from staff to staff etc.

Internal Check:

This is the statement of auditing 114 as allocation of authority showing routine checks.

Internal Control:

This means the whole system of controls, finance and otherwise, established by the management.

Internal Auditor:

A review of operation and records sometimes continuous undertaken within a business by a special assigned staff.

Government Accounting Procedures (GAP):

Government Accounting Procedures (GAP), which guides series of laws.


This is a complete examination of a period of transactions a business and matter in which its transactions are recorded.


Finding against fraud.

Balance Audit:

Accurate audit.

Chapter Five

Summary of Finding Conclusion and Recommendations.

5.1 Summary of Findings

The research is focused the parameters that give credence to efficient and effective accountability of audit work to the public sector or otherwise

The study ha systematically led the researcher to unearth some resounding truths about the phenomenon. From the preceding chapter, it was noted that all the three hypothesis tested were positive.

The statistical tools adopted are means of comparing the significant difference in response to a given question or action. After testing and analyzing the hypothesis, it could be seen that in majority cases and occasion, in the public sector audit aid accountability.

The position is supported by 100% of the respondents it was also observed that 51.4% of the respondent agreed that the problems facing auditor are the causes which hinder their performance in the public sector. 86.5% of the respondents assert that audits existence does not lead to public funds and property. In addition 97.3% of the respondents believed that the standard should be revisited by its body makes while 100% of the respondents agreed that the reporters of auditor are very effective to the public sector. The researcher also shows that auditor recommendation are not regularly implemented and it show a respondent rate of 91.9%

The research also reveals that 91.9% of the respondents agreed that auditor discover frauds and irregularities in the operation of the public sector occasionally.

Investigation in the course the research, as disclosed by the questionnaires, show that 97.3% of the respondents assert that auditing control system helps the public sector to achieve its objectives and this or profitable 94.6% respondents rate believe that inefficient accounting system is considered the major problem militating against proper fund management in the public sector while 100% of the respondents claims that neglect in internal auditors recommendation effects fund management negatively

Another important revelation of this research shows that 100% of the respondent agrees that internal auditor ascertain the reliability and timeless of the management information generated internal also that auditors in terms of procedure for share transfer check the sage custody of shares certificates and company seal regularly. 94.6% of the respondent agreed that internal auditor ensure appropriate training experience and proficiency for his staff which is very vital.

5.2 Conclusion

Having examined in details the position of auditor and their vital roles towards ensuring proper accountability in the public sector one could rightly conclude that without the auditors, the government activities would be in confusion. It is because of the invaluable role of the auditor and that he is often described as the “watch dog of the public fund” the auditor is seen as the last hope of the public sector. By attesting that financial statement contains a true and fair view automatically relaxes the minds of the owners of the business and users of the financial statements. Government auditors have contributed in no small measure towards the development of this our country through the recovery of public funds, which have gone into the hands of certain unpatriotic individuals. Auditing is only a tool for the promotion of sound financial management and cannot be substituted for honesty and moral integrity on the part of the public offices.
It can only help in resisting but can not eliminate entirely the demands of selfish individuals. The researcher therefore concluded the auditing actually aids accountability in the public sector. After due consideration, the researcher will not fail to cite some set backs in the audit as an aid to accountability in the public sector areas cited are as follow

  1. Even through that frauds are detected by the auditor, yes the implementation of auditor recommendation are ignored this does not anchor well for effective fund control and management.
  2. There is lack of sufficient qualified and competent accounting personals. This implies segregation of duties which is an important feature of management control over financial transitions

However, it should be pointed out that proper administration set up accounting records and information system exist in the public sector, indiscipline, and other human factor of the management staff have remained the major constrains to efficient accountability as an aid to the public sector.

There is hope that the advert of the new civilian administration, whose policy thrusts are more pronounced in the eradication of corruption and fraud lent practices in high and low places will go a long way to discipline among management staff (mostly in accounting section) and thus improve the aid of auditing as accountable in the public sector.

5.3 Recommendations

As a result of the findings from this study are suggest the following recommendations which may offer solution to some of the problems. This recommendation includes:

  1. There is need for a comprehensive internal audit the scope of internal audit should be expanded to include economy efficiency and effectiveness audits.
  2. The management which has an audit report must ensure that the reported funds are used for the purpose intended.
  3. Auditors of great integrity and transparent honesty should be rewarded specially for their honesty.
  4. Post payment audit should be adopted.
  5. Accountability should be enforced and emphasis should be placed on training of staff and seminars.
  6. Adoption of efficient accounting.
  7. Performance and programmers aiding accountability in the management should be adopted and encouraged.
  8. Qualified and competent accounting personnel should be employed and allowed to control financial functions.
  9. Discipline is mostly the key factor for the accounting staff in the management to have an efficient accountability as an aid to the public sector.
  10. The accounting bodies should revisited the standard of auditing, so that when active measured are taken to rebuild the standard more profitability arises.
  11. Distinction between auditors of different function should be stated always, this is done as not to cause confusion in the management but to encourage division of labour more profitability.
  12. The federal government should include serve punishment or conviction for any accounting officer or civil servant who try to conceal accounting or auditing document in any way or try to pose obstacles to auditors in the course of their duties the appointment of such officer should be terminated outright.

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