1.1 Background to the Study
There is a general awareness all over the world for the need to pay greater attention to the improvement of government establishment. The reason is obvious, government constitutes the largest single business entity and her pattern of expenditure through its various parastatals, agencies and commission stimulate lot of economic activities. As a result of these government huge involvement in economic activities, initiatives are being taken all over the world toward improvement of the standard of account and auditing department in government. The public sector accounting has the responsibility of developing systematic arrangement to assist management in the performance of the services of the constitution. While the public sector auditor has among other duties, the complementary role to examine whether management actually performed efficiently.
The public sector auditor has to satisfy himself that the account presented have been prepared in accordance with statutory and constitutional requirement and regulation and that the proper accounting practice have been observed in their complication with the growing sized and complexity of public sector in the recent years. The importance of the statutory auditor has correspondingly increase so that it is today a major factor in establishing the quality of public sector internal control and its development has made a considerable contribution to the improvement of the government establishment.
The purpose of this research is to investigate the effectiveness of a statutory auditor in fraud management in government establishment using Federal Pay Office Benin City as my case study.
1.2 Statement of Problem
Most organization and individual employ the service of an external auditor in order to comply with the legal requirement of the act. They may be unaware of the usefulness of the auditor to the organization and as a result of the ignorance, the auditor is bound to encounter some inherent problem in performing his duties properly.
To put an end to the problem, the auditor on his own extra care, from an independent opinions which can be wholly relied upon by the financial statement users.
Therefore as regard the corporation under the study, the examination of the following problems are considered worthwhile and thus deserve an adequate attention.
· Lack of understanding of the purpose of auditing among the society in general.
· Lack of a well defined goal oriented policies aimed at building up a strong and sound financial system.
· Inability for the government owned establishment to maintain a sound system of internal control.
1.3 Research Questions
The following research questions were formulated by the researcher for the conduct of this project:
1. To what extent do frauds affect economic development of the country?
2. To what extent have fraud and mis-appropriation of public fund and properties persisted in the government establishment?
3. How regular is audit work supposed to be carried out in government establishment?
1.4 Objectives of the Study
The objectives of this study are as follows:
1. To find out how frauds affect economic development of the country.
2. To examine the extent of fraud and mis-appropriation of public fund and properties persisted in the government establishment.
3. To ascertain how regular audit work are carried out in government establishment.
1.5 Statement of Hypothesis
The following hypothesis will guide this study:
Ho: The Auditor does not play effective and efficient role in managing fraud in government owned establishment.
HI: The Auditor play effective and efficient role in managing fraud in government owned establishment.
Ho: The total amount involved in fraud has no effect on the development of Nigerian economy.
Hi: The total amount involved in fraud has affected on the development of Nigerian economy.
1.6 Significance of the Study
The significance of this study is that, it will teach the inherent disabilities and limitation of auditing in government owned establishment. It is expected that the result of this study will help improve financial reporting by government owned establishment providing annual reports in accordance with the requirement of Audit Acts, 1990.
The significance of the study to the society in general is to correct the wrong notion on the wealth of government.
It is significant to the government in ensuring that standard in the ministry manual of responsibilities and procedures are maintained.
It is important to the Auditor by showing to them the risk that confronts the auditors in his/her duties, the legal action that could be taken against the auditor if he/she deficit in his duty.
Finally, it is expected that this study will serve as a reference point to future researchers.
1.7 Scope of the Study
There is the need for the statutory auditor to be effective so as to create improvement in the government parastatals. Positive improvement in the public sector will definitely benefit the citizens of the Nigerian nation. The research was based mainly on the Federal Paid Office Benin City. Decision and conclusions were only based on the views expressed by respondents and special investigation was conducted in addition.
1.8 Limitation of the Study
The factors that tend to hinder the scope of this study include:
Reluctant attitude of Respondents: The researcher work was equally saddled with the problem of the reluctant attitude of respondents who found it difficult to avail the researcher with information necessary for the work for fear of exposition.
Distance: Long distance or appropriate place of interest to obtain relevant information was a problem encountered.
1.9 Definition of Terms
Fraud: This is the action or an instance of deceiving somebody in order to make money or obtain goods illegally.
Detection: The act of discovering or the fact of being discovered.
Protection: This is the action of stopping something from happening or arising.
Role: According to the Oxford Advanced Learners Dictionary, role is defined as the function or position that somebody has or is expected to have in an organization.
Role mode: The degree to which somebody is involved in a situation.
Accounting: By the American Accounting Association is defined as the process of identifying, measuring, classifying and communicating economy information to permit informed judgement and decision by users of the information. It should therefore be noted that there are three classes of accounting which include the following;
Financial accounting: This can be defined as a systematic identification, measuring, classifying, summarizing, communication and interpreting of financial information so as to enable stakeholders to have stewardship report and make investment decisions.
Management accounting: This is defined as the application of professional knowledge and skill in the preparation of accounting information in such a way as to assist management in the formulation of policies and planning and controlling of the operations of the undertaking.
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