Accounting Project Topics

Evaluation of Value for Money Audit, as a Tool for Fraud Control in the Public Sector

Evaluation of Value for Money Audit, as a Tool for Fraud Control in the Public Sector

Evaluation of Value for Money Audit, as a Tool for Fraud Control in the Public Sector

Chapter One


This study tends to find out some of the objectives which will include:

  1. To find out the effect of value for money audit in fraud detection and control in the public
  2. To find out the relationship between internal control and fraud
  3. To determine to what extent is the value for money audit relevant to the effectiveness and control of an
  4. To find out why there is a lack of transparency and inadequate methods of
  5. To find out why there is inadequate internal control



  • Overview: According to Anosike (2009), the term “audit” was carried from aLatin word “audore” meaning “to hear”. The idea of audit/auditing emanated from the ancient civilization of romans and Egyptians. During that era or ancient times, the account of an estate or domain, were checked over by those in  Thus, the idea of stewardship accounting which had its origin in the fact that wealthy men or business promoters or owners employed “stewards” to manage their properties and account for them. Such practice brings a lot of suspicion amongst stewards and the estate owners. This in fact gives rise to modern auditing. In the early days of auditing the prime qualification for the position of auditor was “reputation”, a man known for this integrity and independence of mind would be sought for this honored position. The matter of technical skill, ability is entirely secondary.

The word auditor soon acquired a secondary meaning i.e. section 358, sub section 1.6 of companies and allied matters decree (C A M D) of (1990); defines as an auditor as an accountant who has undergone training and a member of recognized accountancy bodies resident in Nigeria, established from time to time by act or decree and who is carrying on professional practice.


According to Azubuike (2005: 84) internal audit is the function of records, appraising the producers and organization of a business and review effectiveness of the system of internal check. Okereke (2000: 24) defines internal auditing as a control function aimed at evaluating the adequacy and effectiveness of other control.

In an organization, the internal audit function is carried out specially the assigned staff called the internal auditors. The power and authority of the internal auditor depends to a large extent on management and level of incumbent in the management structure.

According to Okereke (2000:24) internal constitute, the evaluation of the internal control system of an organization which include internal checks (that is checking of the day to day transaction) it operates continuously as part of the routine system where the work of one person is proved to be independent to the work of another, the objective being easily detection and prevention of fraud.





According to Anyanwu (2002), research methodology refers to the ways in which a researcher utilize in administering and collecting of data in order in order to get necessary information in a research work.

This chapter highlights the methods and procedures adopted in carrying out the study of two types of data collection produce were employed in this work, they are personal interview and questionnaire some relevant publications were studied, seminars, journals and some textbook provided in this research work.


Research design provides the glue that holds the research project together. A research design is used to structure the research to show how all major part of the research project work together and also tries to address the central research questions that were used.

According to Anyanwu (2000:4) defined research design as the frame works that indicates the type of information that is needed for the research, the source of such information and method of its collection.

According to Baridam (1994:44) research design could therefore be seen as a framework or plan that is used as a guide in collecting and analyzing the data for study. The study was designed in a manner that would enable sufficient data collection and at the same time achieve the objective. Having verified the problems and developed empirical question and hypothesis, the researchers engage into a field work to obtain relevant primary data for the execution of study. In addition, literature served useful guidelines and assistance. Definitely, this is a survey research. Survey research is the method of gathering data from respondents to be the representative of some population using an instrument composed of closed structure or open ended items (questionnaire).

NOTE: In this research, survey design was used to, so as to ensure originality and reliability. That is, to ensure that all information gotten were from primary source and not secondary data.


The researchers made use of both the primary and secondary data collection sources:

  1. The primary data sources: these include data generated through oralinterview and questionnaire process. They consist of responses elicited from respondents that completed and returned the questionnaires.
  2. Thesecondary data sources: these include data generated through journals, textbook, seminars, articles, newspapers which served as reference material in the literature review to a large


The emphasis here is on organization under study, which is power holding company of Nigeria (PHCN).


The population of the study here is on selected staffs in four of the unit or department of the power sector namely: audit unit, finance, account, and public relation department. The population of the study is 133




The presentation of data collected means the way of presenting and arranging the different forms of data obtained through various data collecting techniques to enable the researcher perform analysis and exact new meaning from it. The data collected will be presented in simple table. The data analysis was based on the answers to the key question received from the various departments. The key questions in the questionnaires will be analyzed by the use of simple percentage. A total of 133 questionnaires were distributed and a total number of 100 were returned.

These responses gotten from the questionnaire are presented in a tabular form, analyzed in percentage and expressed on the S points rating scale.

The analysis of variance (ANOVA) was used in testing of the hypothesis and the interpretation of the outcome of these data.




 Summary of research findings

This study was channeled towards the discovery of the various fraud detection and problems associated with the power holding company of Nigeria, Abuja. This objective was achieved through the research questions formulated from the statement of the problem as this enabled the researcher to design and collect responses from the distributed questionnaires brought out the following findings which are enumerated below.

There is a significant effect of the value for money audit performance in fraud detection and control in public sector.

Value for money audit plays a vital role in promoting the effectiveness and efficiency of activities in the public sectors.

Fraud in the public sector could be reduced drastically through efficient operation of audit roles.

Evaluation of the effectiveness of value for money audit in the actualization of organization, and appropriate motivation can aid improving the performance of these auditors.

Political instability and inadequate policy implementation contribute to the magnitude of fraud prevention in the public sector.

Inadequate internal control could be the cause of fraud in the power sector.

Fraud detection and control is not the primary concern of value for money audit in the public sector.

The extent of corruption prevailing in the public sector, places adverse influences on the value for money audit duties.

Provision of effective internal control system in public establishments could enhance the performance of value for money audit, especially in the area of fraud control.


 One of the major problems that confront value for money audit is devising ways of tackling the occasional and recurring menace of fraud that affects business. Though the primary aim of value for money audit duties is not fraud detection and control but on the independent examination of financial records of an organization so as to express an opinion on whether or not such records were prepared in accordance with relevant statues, as well as, represent a true and fair view of the state of affairs of the organization.

In the public sector, where the extent of fraud is high, the challenge on value for money audit by managers, and executives in ensuring a fraud less organization set-up is enormous. Government of various levels, who are the chief custodian of public goods, relies on the function of these values for money audit. In conjunction with other various machineries for crime control, to curb the magnitude of fraud prevailing in the public sector. In line with this development all states have established in them, the office of auditor general for power sectors affairs and other state parastatals.

In agreement to the above, Okereke (200:19) says that the main duty of an auditor is to report to the members the accounts examined by them and balance sheet, profit and loss accounts and groups accounts laid before the organization in general meeting during his tenure of office.


Based on the findings, the following recommendation were made as these will go a long way in helping the power holding company in terms of fraud detection and control in the public sector. The recommendations are:

  1. Value for money audit in public sector should be equipped, supported and protected so as to be effective and efficient in their act of fraud detection and
  2. Government should create an agreement where those indicated by the auditor general for crime relating to fraud in spite of their status are brought into the book.
  3. Policy formulated to enhance the extent of control in public sector shouldbe implemented to the later, to ensure
  4. Effective internal control should be pursued in the organization as a means of reducing the tendency of fraud commitment in the
  5. Sanctions should be meted unto auditors that show undue collaboration with any public staff or civil servants, for the purpose of perpetrating fraud in public sectors and beyond.
  6. The level of effectiveness in value for money audit rules and duties could influence the extent of fraud in the public sector, this consideration should place


  • Anosike, I. (2009). Auditing and Investigation. Owerri: Global Press Limited.
  • Anyanwu, K. (2009). Fraud prevention and control in record management. Owerri: I.M.S.U Press.
  • Alugbuo, L. (2002). Common concern of managers. Owerri: Achugo Publications.
  • Azubuike, G. (2005). Auditing: A Nigeria Perspective. Enugu: Rhyce Kerex Publishers.
  • Albrecht, D. (2001). “Can Auditors Detect Frauds”. The journal of forensic Accounting, Vol 8, Pg 4.
  • Anyanwu, K. (2002). Research Methodology in Business and social sciences. Owerri: Avan Global Press Ltd.
  • Barridam, M. (1994). Research Methods Administration sciences in Nigeria. Port Harcourt: Beck and Publisher Ltd.
  • Chukwu, H. (2005). Auditing and investigation, Aladimma, Owerri: City Print Publishers.
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