DETERMINATION OF THE PERCEPTION OF AUDITING IN PUBLIC SECTOR AS AN INSTRUMENT OF ACCOUNTABILITY

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DETERMINATION OF THE PERCEPTION OF AUDITING IN PUBLIC SECTOR AS AN INSTRUMENT OF ACCOUNTABILITY

CHAPTER ONE

INTRODUCTION

1. Background of the Study

Public owned business are not managed by individual shareholders, similarly resources within the Nigerian Economy are not managed by citizen of the Federal Republic of Nigeria because it is not possible for all the invested shareholder to hold management position in the business, directors are elected and the function of managing the business for qualitative services delivery, product design, control efficient use of resources are placed in the hands of the board directors.

Similarly, the elected representatives from various constituently of the Federal Republic of Nigeria are saddled with the task of lawmaking, the executive at all level i.e. Federal, State and Local Government are saddled with the people by providing public amenities and infrastructure.

The two instances bring us to the subject of stewardship accountancy. It is the responsibility of the director to give account of their stewardship to the shareholders. In like manner, the elected leaders in government are to give account of the citizens of the Federal Republic of Nigeria appropriately. However, one may want to ask how would the elected representative gives accounts to the people? The 1989 act and 1990 Companies Allied Matter Act (amended). The company act of 1948 and the Nigeria companies Act of 1968 aid the constitution of Federal Republic of Nigeria legal instrument that compel accountability and stewardship accounting.

Therefore, auditor in public sector especially within the embers of government at all level has been described as ineffective, inefficient, in fact, they have been described as only stooge of their manners.

It has also been adduced from different quarters that the subject of accountability has been ignored by successive government in Nigeria. This fact is substantiated by evidence of money laundering and other forms of fraudulent acts by the people in government.

Auditing is a systematic process of objectively obtaining and evaluating evidence regarding ascertains about economic actions and events to ascertain the degree of correspondence between assertions and established criteria, and communicating the result to interested users. Therefore, auditing derives its root from stewardship accounting is the name given to the practice by which productive resources by one person or group of persons are managed by one another. 

Limited liabilities companies owned by shareholders and managed by director appointed by shareholders. The directors are expected to prepare financial statement and present to shareholder at annual general meeting, the shareholder being a layman appoint an auditor to study the correctness and completeness of the statement and express his opinion to them.

Government resources are owned by the people who want to know how these resources are being applied to the executive. The people representative (National Assembly), the equivalent of an annual general meeting of shareholder approve executive appointment and they are expected to prepare financial statement through accountant general of the state present or federation present to the auditor general who is appointed by the people representative for auditing. He audit and give report to the National Assembly his findings.

1. Statement of Problem

Among the social ills plaguing the country (Nigeria) today are fraud, embezzlement and vandalisation of public fund properties in the public and private establishment. In today’s society, the notable ploughing confronting Nigeria which includes the vices mentioned above call for the setting up of this mechanism to curb the inherent lapses existing in organization. It can also be based that lack of appropriate internal control system also serves as the menace confronting auditors in public sector

1. Objectives of the Study

The main objective of the study is to determine the perception of Auditing in public sector as an instrument of Accountability.

          The specific objectives are;

1. To determine if there is effective auditing in the Nigerian Public Sector.
2. To determine the extent of adherence by auditors to regulatory framework in auditing public financial statement.
3. To examine the perception of auditing in public sector as an instrument of Accountability.
   1. Research Questions

The Research questions will therefore be:

1. Is there effective auditing in the Nigerian Public Sector?
2. Do Auditors adhere to regulatory frame work in auditing public financial statement?
3. What is the perception of auditing in public sector as an instrument of Accountability?
   1. Statement of Hypothesis

The study therefore is hypothesized as follows:

Hypothesis 1

H_11: There is effective auditing in the Nigerian Public Sector.

Ho₁: There is no effective auditing in the Nigerian Public Sector.

Hypothesis 2

Ho:    Auditors do not adhere to regulatory frame work in auditing public financial statement.

H₁:    Auditors adhere to regulatory frame work in auditing public financial statement

1. Significance of the Study

The perception of auditing in public sector is being researched into, to help determine the independent appraisal function and quality of performance for the view of Accountability in the public sector.

The study is significant to broaden existing knowledge and also serve as a basis for other research in this field of study and this would be of benefit to auditors for the purpose of good Accountability.

The study is also of benefit to the organization when there is internal check to prevent the occurrence of fraud.

1. Scope of the Study

The research work covers the perception of auditing in public sector, affecting the accountability of some selected organization with great emphasis on National Assembly in Abuja for a period of five years (2016 – 2020).

The research took a sample on National Assembly Abuja.

A descriptive research was adopted in the study to understand the regulatory frame work of any audit as well as objectives and the distinction between Auditing and Accountability.

1. Definition of Terms

Auditing: This is an independent examination of an expression of opinion of financial statement of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevant law and regulation.

Auditor:  A person who is statutory deemed competent to examine the financial statement of a company and issue a professional opinion as to whether the financial statement shows a true and fair view of the company or organization at the end of the financial year.

Independence:  An auditor must not be perceived as being under the influence out his work and express his opinion without fear or favor.

Financial Statement:  These are requirements that an auditor provides information on asset and income often asked of the clients or employees; financial statement includes statement of accounting policies, profit and loss account, and balance sheet.

Fraud:  Fraud has been referred to as irregularities in the financial statement and they are deliberate actions that are taken. It can be through manipulation of account which is carried out by the managers or it could be outright of the company’s asset which involves defalcation.

Accountability:  This is the process by which the receipt and payment of an organization accounting system are measured. It is a situation by which assets and liability of a business is declared public to the tax payer or the shareholder in accordance to the organization financial ethnics.

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