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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

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

Chapter One

OBJECTIVESย OFย THEย STUDY

Thisย studyย tendsย toย findย outย someย ofย theย objectivesย whichย willย 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

CHAPTER TWO

ย REVIEWย OFย RELATEDย LITERATURE

  • Overview: According to Anosike (2009), the term โ€œauditโ€ was carried from aLatin word โ€œaudoreโ€ meaning โ€œtoย hearโ€. The idea of audit/auditing emanatedย from the ancient civilization of romans and Egyptians. During that era or ancientย times,ย theย accountย ofย anย estateย orย domain,ย wereย checkedย overย byย thoseย inย  Thus, the idea of stewardship accounting which had its origin in the factย thatย wealthyย menย orย businessย promotersย orย ownersย employedย โ€œstewardsโ€ย toย manageย theirย propertiesย andย accountย forย them.ย Suchย practiceย bringsย aย lotย ofย suspicionย amongstย stewardsย andย theย estateย owners.ย Thisย inย factย givesย riseย toย modern auditing. In the early days of auditing the prime qualification for theย positionย ofย auditorย wasย โ€œreputationโ€,ย aย manย knownย forย thisย integrityย andย independence of mind would be sought for this honored position. The matter ofย technicalย skill,ย abilityย is entirelyย 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 recognizedย accountancyย bodiesย residentย inย Nigeria,ย establishedย fromย timeย toย timeย byย actย orย decreeย and who is carryingย onย professionalย practice.

ย DIFFERENCEย BETWEENย INTERNALย AUDITINGย ANDย INTERNAL AUDITOR

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

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

According to Okereke (2000:24) internal constitute, the evaluation of theย internal control system of an organization which include internal checks (that isย checking of the day to day transaction) it operates continuously as part of theย routine system where the work of one person is proved to be independent to theย workย of another,ย the objectiveย beingย easily detectionย andย preventionย of fraud.

 

CHAPTERย THREE

RESEARCHย METHODOLOGY

ย INTRODUCTION:

According to Anyanwu (2002), research methodology refers to the ways inย which a researcher utilize in administering and collecting of data in order in orderย to getย necessaryย informationย inย aย researchย work.

Thisย chapterย highlights theย methods and procedures adopted inย carryingย out the study of two types of data collection produce were employed in this work,ย they are personal interview and questionnaire some relevant publications wereย studied,ย seminars,ย journalsย andย someย textbookย providedย inย thisย researchย work.

ย RESEARCHย DESIGN

Research design provides the glue that holds the research project together.ย A research design is used to structure the research to show how all major part ofย the research project work together and also tries to address the central researchย questionsย thatย wereย used.

According to Anyanwu (2000:4) defined research design as the frame worksย that indicates the type of information that is needed for the research, the sourceย ofย suchย informationย andย methodย of its collection.

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According to Baridam (1994:44) research design could therefore be seen asย a framework or plan that is used as a guide in collecting and analyzing the data forย study. The study was designed in a manner that would enable sufficient dataย collectionย andย atย theย sameย timeย achieveย theย objective.ย Havingย verifiedย theย problemsย andย developedย empiricalย questionย andย hypothesis,ย theย researchersย engage into a field work to obtain relevant primary data for the execution ofย study. In addition, literature served useful guidelines and assistance. Definitely,ย this is a survey research. Survey research is the method of gathering data fromย respondents to be the representative of some population using an instrumentย composedย of closedย structureย orย openย endedย items (questionnaire).

NOTE: In this research, survey design was used to, so as to ensure originality andย reliability. That is, to ensure that all information gotten were from primary sourceย andย notย secondary data.

SOURCESย OFย DATA

Theย researchersย madeย useย ofย bothย theย primaryย andย secondaryย dataย collectionย sources:

  1. The primary data sources: these include data generated through oralinterview and questionnaire process. They consist of responses elicitedย fromย respondentsย thatย completedย andย returnedย the questionnaires.
  2. Thesecondaryย dataย sources:ย theseย includeย dataย generatedย throughย journals,ย textbook,ย seminars,ย articles,ย newspapersย whichย servedย asย referenceย materialย inย theย literatureย review toย aย large

AREAย OFย STUDY

The emphasis here is on organization under study, which is power holdingย companyย of Nigeriaย (PHCN).

ย POPULATIONย OFย THEย STUDY

The population of the study here is on selected staffs in four of the unit orย department ofย theย powerย sectorย namely: auditย unit, finance, account,ย andย publicย relationย department. Theย populationย of theย studyย is 133

CHAPTERย FOUR

ย DATAย PRESENTATION,ย ANALYSISย ANDย INTERPRETATION

ย DATAย PRESENTATION

The presentation of data collected means the way of presenting andย arrangingย theย differentย formsย ofย dataย obtainedย throughย variousย dataย collecting techniques to enable the researcher perform analysis and exactย new meaning from it. The data collected will be presented in simple table.ย The data analysis was based on the answers to the key question receivedย from the various departments. The key questions in the questionnaires willย be analyzed by the use of simple percentage. A total of 133 questionnairesย wereย distributedย and aย totalย numberย of 100ย wereย returned.

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

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

 

CHAPTERย FIVE

SUMMARYย OFย FINDINGS,ย CONCLUSIONย ANDย RECOMMENDATION

ย Summaryย ofย researchย findings

This study was channeled towards the discovery of the various fraudย detection and problems associated with the power holding company ofย Nigeria, Abuja. This objective was achieved through the research questionsย formulatedย fromย theย statementย ofย theย problemย asย thisย enabledย theย researcherย toย designย andย collectย responsesย fromย theย distributedย questionnaires brought out the following findings which are enumeratedย below.

Thereย isย aย significantย effectย ofย theย valueย forย moneyย auditย performanceย inย fraudย detectionย andย controlย inย publicย sector.

Valueย forย moneyย auditย playsย aย vitalย roleย inย promotingย theย effectivenessย andย efficiencyย of activities inย the publicย sectors.

Fraudย inย theย publicย sectorย couldย beย reducedย drasticallyย throughย efficientย operationย of auditย 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 theย magnitudeย of fraudย preventionย inย theย publicย sector.

Inadequateย internalย controlย couldย beย theย causeย ofย fraudย inย theย powerย sector.

Fraud detection and control is not the primary concern of value for moneyย auditย inย theย publicย sector.

Theย extentย ofย corruptionย prevailingย inย theย publicย sector,ย placesย adverseย influencesย onย the valueย for moneyย auditย duties.

Provision of effective internal control system in public establishments couldย enhanceย theย performanceย ofย valueย forย moneyย audit,ย especiallyย inย theย areaย ofย fraudย control.

CONCLUSION

ย 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 notย fraudย detectionย andย controlย butย onย theย independentย examinationย ofย financial records of an organization so as to express an opinion on whetherย or not such records were prepared in accordance with relevant statues, asย wellย as,ย representย aย trueย andย fairย viewย ofย theย stateย ofย affairsย ofย theย 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 beforeย theย organizationย inย generalย meetingย duringย hisย tenureย of office.

RECOMMENDATION

Based on the findings, the following recommendation were made as theseย will go a long way in helping the power holding company in terms of fraudย detectionย andย controlย inย the publicย sector.ย Theย 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 shouldbeย implementedย to theย later,ย 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

BIBLIOGRAPHY

  • Anosike,ย I.ย (2009).ย Auditingย andย Investigation.ย Owerri:ย Globalย Pressย Limited.
  • Anyanwu,ย K.ย (2009).ย Fraudย preventionย andย controlย inย recordย management. Owerri: I.M.S.Uย Press.
  • Alugbuo,ย L.ย (2002).ย Commonย concernย ofย managers.ย Owerri:ย Achugoย Publications.
  • Azubuike, G. (2005). Auditing: A Nigeria Perspective. Enugu: Rhyce Kerexย Publishers.
  • Albrecht, D. (2001). โ€œCan Auditors Detect Fraudsโ€. The journal of forensicย Accounting,ย Volย 8,ย Pgย 4.
  • Anyanwu,ย K.ย (2002).ย Researchย Methodologyย inย Businessย andย socialย sciences. Owerri:ย Avanย Globalย Pressย Ltd.
  • Barridam,ย M.ย (1994).ย Researchย Methodsย Administrationย sciencesย inย Nigeria.ย Portย Harcourt:ย Beckย andย Publisherย Ltd.
  • Chukwu,ย H.ย (2005).ย Auditingย andย investigation,ย Aladimma,ย Owerri:ย Cityย Printย Publishers.

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