Internal Audit As A Tool For Promoting Accountability And Transparency (A Case Study Of Okehi Local Government Area Of Kogi State)

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Internal Audit As A Tool For Promoting Accountability And Transparency (A Case Study Of Okehi Local Government Area Of Kogi State)


Abstract


The major objective of this study is to examine how internal audit can promote Accountability and transparency. The first chapter gave an in-depth of the background to the study, statement of the problem, objective of the study, research question, research study, limitation, definition of term in the course of the study, many literary works were on the literature review and conceptual framework in this chapter, the researcher was able to explain the concept of Internal Control based on the explanation given by different authors. The researcher was able to relate Internal audit as a check on Internal Control. Also, the researcher explained the concept of Accountability and Transparency, limitation of Internal System, and lastly review of previous Studies which the researcher gave a lot of Authors opinion. There is no research that can be done without presenting data. Chapter three, which is the research methodology on respondent who are well informed about auditing. The data collected were mostly analyzed by using chi-square method (x2) to arrived at final conclusion. Chapter Four focuses on the data presentation, analysis and interpretation. Based o the data collected and analyzed. It was discovered that the relationship between Internal audit department and other department strongly affect the Effectiveness of Accountability and Transparency in Okehi Local Government. The factors that hindering the effective performance of auditors includes auditor’s independence, qualification and working experience and laid down rules and regulations, while Chapter Five focus on Summary, Conclusion, Recommendation and Suggestion for further studies.


Table of Contents


  • Title page
  • Dedication
  • Certification
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of Contents
  • List of Tables

Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Study
  • 1.3 Objective of the Study
  • 1.4 Research Question
  • 1.5 Research Hypothesis
  • 1.6 Significance of the Study
  • 1.7 Scope of the Study
  • 1.8 Limitation
  • 1.9 Definition of Terms

Chapter Two:

Literature Review

  • 2.1 Introduction
  • 2.2 Concept of Internal Control
  • 2.3 Internal Audit as a Check on Internal Control
  • 2.4 Internal Check
  • 2.5 Concept of Accountability and Transparency
  • 2.6 Limitation of Internal Control System
  • 2.7 Review of Previous Studies
  • 2.8 Summary

Chapter Three:

Research Methodology

  • 3.0 Introduction
  • 3.1 Research Design
  • 3.2 Population of the Study
  • 3.3 Sampling Method
  • 3.4 Sampling Procedures
  • 3.5 Research Instrument
  • 3.6 Analysis of Data Collected
  • 3.7 Statistical Tools and Analytical Procedures
  • 3.8 Limitation of Methodology

Chapter Four:

Data Analysis Results and Discussion

  • 4.1 Introduction
  • 4.2 Data Analysis
  • 4.3 Analysis of Responds/Items on the Questionnaire
  • 4.4 Testing of Research Hypothesis
  • 4.5 Discussion of Findings

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Introduction
  • 5.2 Summary
  • 5.3 Conclusion
  • 5.4 Recommendation
  • 5.5 Suggestion for Further Studies
  • References
  • Appendix
  • Questionnaire

List of Tables


  • Table 1: Age Distribution of Respondents
  • Table 2: Marital Status of Respondents
  • Table 3: Gender Distribution of Respondents
  • Table 4: Respondents Level of Education
  • Table 5: Working Experience of Respondents
  • Table 6: Percentage Score of the Responses
  • Table 7: Percentage Score of the Responses
  • Table 8: Percentage Score of the Responses
  • Table 9: Percentage Score of the Responses
  • Table 10: Percentage Score of the Responses
  • Table 11: Percentage Score of the Responses
  • Table 12: Percentage Score of the Responses
  • Table 13: Percentage Score of the Responses
  • Table 14: Percentage Score of the Responses
  • Table 15: summary of chi-square (x2) result of the impact of internal auditing in promoting transparency in the local government council
  • Table 16: Summary of Chi-square (X2) result of the impact of internal audit in promoting accountability in Okehi Local Government Area of Kogi State
  • Table 17: Summary of Chi-square (x2) result of the impact of internal auditor’s independence, qualification and working experience in promoting accountability and transparency in Okehi Local Government Council of Kogi State

Chapter One


Introduction

1.1 Background to the Study

The growth and increasing complexity of business environment has made it imperative for management to seek for more of control which has resulted to internal and it serves as control measure in both public and private sector. It is now very rare to find an enterprise of any size which does not have internal control system.

Internal control system said to be essentially and appraising activity with an organization that contributes to a good controlled environment through an effective internal audit function.

According to Dandago (2002), internal auditing is the independent review or appraisal within an organization of accounting, financial or other operations as basic for protection and constructive service to the management of such an organization.

Accountability is an obligation imposed by law or lawful order or regulation on an officer or other person for keeping accurate record of property, documents or funds.

It is quiet understand that internal audit is the major role play in the public sector and expected to enhance accountability. But there are some sector that is still lack accountability despite the internal audit is put in place by government.

I carry out the research and discover there are some challenges facing by internal auditors that is why internal audit in public sector lack accountability.

The reason of carrying out the research is to correct and maintain proper internal control and adequate internal audit to enhance accountability in public sector.

The challenge that affects internal audit in order not to enhance accountability is inadequate staffing, organizational policy and incompetent staff.

With the challenges listed above, if government can make adjustment and put in place adequate staffing manipulation of organizational policy and employ quality auditors.

If all these can be meaningful and financial statement of every parastata will be fair and free from miss- appropriation.


1.2 Statement of the Problem

The effectiveness and survival of any organization depends on its ability to manage its resources effectively and one of such ways is by establishing an effective internal control system in the organization. It is often argue that despite that there is existing internal audit department in both private and public sector, the rate of fraud I the economic is still on the high side.

It now occur that effective internal audit leads to accountability, and in most cases effective internal control leads to lack of accountability due to the insufficient staffing, organization policy, qualification of staff and incompetent of the internal control unit. The presence of internal audit department has not completely checked the menace of irregularities, fraud and misappropriation. It is therefore important to investigate the level of effectiveness of internal audit in the local government with the view to find out factors that hinder its successful operation. The development therefore appears to put auditors investigative and reporting independently in jeopardy and this may defeat the purpose of internal audit an erode the independent and hence the objective of report to the management. It is therefore doubtful of the independent of the auditors will have any significant impact on the accountability of public sector Nigeria.


1.3 Objective of the Study

This research work is on the role of internal audit as a tool for promoting account ability and transparency in local government with specific reference to Okehi local government area of Kogi state.

Specifically the study seek to;

  1. Investigate the role of internal audit in promoting transparency in the local government council.
  2. Investigate the role of internal audit in promoting accountability in the local government.
  3. Investigate the extent of internal auditor’s independence, qualification and working experience promote accountability and transparency in the local government.

1.4 Research Questions

The study makes effort to provide answer to the following research questions.

  1. What are the roles of internal audit in promoting transparency in the local government council?
  2. What are the roles of internal audit in promoting accountability in the local government council?
  3. Do internal auditor’s independence, qualification and working experience promote accountability and transparency in the local government?

1.5 Research Hypotheses

The following hypotheses were formulated to guide the conduct of this research work;

Hypothesis 1
  • H1: Internal audit has significant impact in promoting transparency in the local government council.
  • H01: Internal audit has no significant impact in promoting transp rency in the local government council.
Hypothesis 2
  • H2: Internal audit has a significant impact in promoting accountability in the local government council.
  • H02: Internal has no significant impact in promoting accountability in local government council.
Hypothesis 3
  • H3: Internal auditor’s independence qualification and working experience has a significant impact in promoting transparency and accountability in the local government council
  • H3: Internal auditor’s independence qualification and working experience has no significant impact in promoting accountability and transparency in the local government council.

1.6 Significance of the Study

The fact remains that the result of the through research project contribute greatly to factors and doctrines which were already in existence. Thus, the finding of the study is an additional work to the existing body of knowledge.

The finding of this research work is expected to provide the guide useful for identifying the internal audit as a tool for promoting accountability in the local government of Nigeria. It is also aimed to providing solution to the problem hindering some firm having proper internal control but lack accountabilities. Beside, the research work will provide skills need to carryout effective internal audit so that public sectors financial statement will have fair value.


1.7 Scope of the study

The scope of the study covers the internal audit as a tool for promoting accountability and transparency. The study is limited to the local government in Nigeria. Due to time and financial constrain, the research work will not be extended to provide the information needed about the internal audit as a tool for promoting accountability and transparency in Okehi Local Government Area Kogi State which is used as a sample.


1.8 Limitation

A research work of this kind is always constrained by many limitations. Among the limiting factors encountered during the cause of carrying out this work include:

Time Constraints:

This factors limits the study scope limited time coupled with other academic commitments like lecture time which marrows the degree of effort that would be devoted to the work.

Financial Constraints:

This is the striking problem that limit the scope of this work insufficiency financial resources.
This has restricted the extent of data collection and ability to obtain adequate material.

Confidentiality:

This was encountered of the part of the executive officers of the cases study because of their unwillingness to disclose information for fear being against them.


1.9 Definition of Terms

Internal Audit:

It is an independent, objective assurance and consulting activities designed to add value and improve and organization.

Internal Control:

It is a whole system of control, financial or otherwise established by the management to ensure it carries out its functions in orderly manner, safeguard its assets and ensure as far possible the accuracy a reliability of its records.

Accountability:

The obligation of an individual or organization to account for its activities, accept responsibility for them, and to disclose the results in a transparent manner. It is also includes the responsibility for money or other entrusted property.

Transparency:

Lack of hidden agendas ad conditions, accompanied by all availability of full information required for collaboration, cooperation and collective decision making.

Local Government:

This is the third-tier of government in the Nigeria sate. It is a form of public administration which in a majority of contexts, exist as the lowest tier of administration within a given state.


Chapter Five


Summary, Conclusion and Recommendation

5.1 Introduction

This chapter present information summary of the entire study, the conclusion drawn from the findings and recommendations made.


5.2 Summary

The study is a survey work on internal audit as a tool for promoting accountability and transparency in local government secretariat with specific reference to Okehi Local Government Area of Kogi State. A descriptive research design of survey type was adopted for the study which involve the use of a well structured questionnaire to elicit relevant data for the study from the sample subject of the study.

Three research questions were raised and three hypothesis were generated and tested to guide the conduct of the research work. A sample of seventy (70) staff were randomly selected as the sample for the study. Seventy (70) lapses of the questionnaire were distributed and 64 were returned which representing 91.4% of the total questionnaire administered. The data collected through the administered questionnaire ere analysis using frequency count and simple percentage while the hypotheses tested through the use of chi-square (x2) statistic at 0.05 alpha level of significance.

The summary of the findings revealed thus;

  1. Internal audit has a significant impact in promoting accountability in the local government council.
  2. Internal audit has a significant impact in promoting transparency in the local government council.
  3. Auditor’s independence, qualification and working experience has significant impact the quality of audit, accountability and transparency in the local government council.

5.3 Conclusion

The following conclusion were made from the investigation carried out on the role of internal audit in promoting accountability and transparency in local government council with specific reference to Okehi Local Government Area of Kogi State.

Assessment of compliance with internal audit mechanism in the local government council has significant impact in promoting accountability in.

Internal audit enhance organization transparency and significantly promote efficiency of the organization.
Internal auditor’s independence qualification and working environment significantly influence the organization accountability and transparency.


5.4 Recommendation

A system of effective controls is a critical component or organization accountability and transparency. In line with the findings and conclusions drawn, the following recommendations were suggested;

Management within the local government council should always ensure that an appropriate procedure of the organization auditing are followed to enhance organization accountability and transparency.

Organization should be absolute comply with operational guideline and regulation. Every local government council has its operational assessments, Accounting, Information and Communication to promote efficient use of internal audit.

A more integrated approach to internal control placing a greater emphasis on its ability to proactively prevent loss and encourage efficiency should be encourage in the local government council.

There should be an effective and comprehensive internal audit of the internal control system carried out by operatically independent, appropriately trained and competent staff.

Internal auditing should be exercised at every phase of operation of the bank, there should be also continuous improvement in the internal audit techniques and teaches to promote accountability and productivity.

There should be discipline in the part of the management not over-ride the controls, and encourage staff participation indecision making to facilitate good working environment that promote auditors independence.

There should be regular evaluation of control in order to determine their effectiveness in operation and identify weakness, so that corrective action can be taken.


5.5 Suggestions for Further Studies

The study suggested that a further study should be carried out to investigate the challenges facing internal auditing in an organization in Kogi State.

The study also suggested that in further should be undertaken to establish the impact of internal auditing in local government administration in Kogi State.


Internal Audit As A Tool For Promoting Accountability And Transparency (A Case Study Of Okehi Local Government Area Of Kogi State)


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Internal Audit As A Tool For Promoting Accountability And Transparency (A Case Study Of Okehi Local Government Area Of Kogi State)


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