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PROJECT TOPIC- EFFECT OF VALUE FOR MONEY AUDIT ON THE MANAGERIAL PERFORMANCE OF PRIVATE FIRMS IN ENUGU STATE: A STUDY OF INNOSON TECHNICAL AND INDUSTRIAL CO. LTD ENUGU, EMENE, ENUGU STATE

PROJECT TOPIC- EFFECT OF VALUE FOR MONEY AUDIT ON THE MANAGERIAL PERFORMANCE OF PRIVATE FIRMS IN ENUGU STATE: A STUDY OF INNOSON TECHNICAL AND INDUSTRIAL CO. LTD ENUGU, EMENE, ENUGU STATE

ABSTRACT

This work titled “Effect of value for money audit on the managerial performance of private firms in Enugu State: A study of Innoson Industrial and Technical Co. Ltd. Emene, Enugu”. This research is aimed at determining if value for money audit affect the correctness of financial statements, determine the extent to which value for money audit helps in enforcing compliance to rules and regulations governing private firms, ascertain the impact of value for money audit on the managerial performance of private firms. The researcher adopted survey research design, data were collected and analyzed using Chi-square statistical tools. Based on the analysis it was recommended that the practice and procedures of value for money audit in private sector organizations should be in accordance with the 1999 constitution, there is need for audit policy memorandum. Audit policy memorandum is a documentary evidence that adequate standing plan is carried out. This audit plan is used again and again but it should be flexible and framed in broad terms so as to encourage an open-minded approach, professional ethics must be considered. This includes good knowledge of the theory and practice of accounting, confidentiality, objectivity, integrity, independence sector experience, competence methodology and painstaking and the introduction of Internal control is fundamental to the success of value for money system because authorization, appraisal, appraisal and control of resources are essential elements for economy, effectiveness and efficiency, time table policy should be made mandatory that audit assignment must be completed to meet stated deadline for the submission of reports according to the constitution or any other statue and finally, there should be uniform policy report format for all findings and be integrated into the audit policy memorandum.

CHAPTER ONE

INTRODUCTION

1.1. Background of the Study

Auditing has existed as long as man has been required to account for their transactions. A famous example is in St. Mathew’s Gospel (Chapter 25) when the rich man went on a journey and delivered his goods to a servant to look after them while he was away. On his return, he asked each of these servants to account for the goods with which he had been entrusted. In the ancient ages, great land owners would not manage their own land, but would appoint stewards to manage their own land for them.

The account of these land owners were checked by having them called out by those who gave them to those in authority (land owners) for hearing otherwise called stewardship accounting. Auditing can be defined as the process of an independent examination of vouchers, internal control system and financial statements of an organization by a person or a group of persons called auditors so that the auditors can form and express opinion whether the vouchers, internal control system and financial statement, give a true and fair view of the organization.

Auditing is carried in both the public and private sectors. In the case of public sector, there are two foremost types of audit that are carried out namely: Regulatory audit and financial audit and the third type is value for money (VFM) audit which is yet to be fully integrated in most part of the world. According to Bechberger (2007), it is observed in the past decades that in order to fight global corruption and strengthening transparency and accountability in public sector organization across the world, public sector organizations are now under pressure from the public to integrate value for money principles in their management practices.

Value for money according to National Audit Office (2007) means providing a service or a product in a way which is economical efficient and effective. Value for money audit is therefore, the type of audit that is used to assess the value for money system in any organization. It is an independent examination of the criteria (economy, efficiency and effectiveness) for the value for money to confirm that the organizations available resources are used wholly, necessarily, reasonably and exclusively so as to maximize progress towards the chosen objective.

The private sector is the private initiative aimed at profit/wealth maximization for the owners Mill champ (1996) defines internal audit as an independent appraisal function within an organization for the review of system of control and the quality of review of systems of control and the quality of performance as a service to the organization. The research seek to empirical and statistically ascertain the effect of value for money audit on private sector of the Nigerian economy, while the private sector of the economy is studied at large; the study Innoson Technical and Industrial Co. Ltd, Emene, Enugu is particularized.

PROJECT TOPIC- EFFECT OF VALUE FOR MONEY AUDIT ON THE MANAGERIAL PERFORMANCE OF PRIVATE FIRMS IN ENUGU STATE: A STUDY OF INNOSON TECHNICAL AND INDUSTRIAL CO. LTD ENUGU, EMENE, ENUGU STATE

1.2. Statement of the Problem

The private sector according to Anyanwu (1993) is that part of the economy not under direct government control. It entails production and distribution that is in private hands. It serves as a complement to the public sector since increased public sector efficiency results from improvements and places government in a better position to focus on the objectives, conduct and performance of those enterprises that remain in the public sector (Hamming and Mansoor 1987). Despite this enormous role, the sector has been beclouded with problems such as:

  1. Financial impropriety
  2. Lack of auditing control
  3. Lack of independence of the internal control
  4. Incomplete recording of business transactions
  5. Over blow expenses to reckless spending
  6. Noncompliance and adherence to accounting standard and guide lines.
  7. Mismanagement of scarce funds

1.3 Objectives of the Study

The broad objective of the study is to examine the effect of value for money audit on the managerial performance of private firms in Enugu State: Specifically the study sought to:

  1. Determine if value for money audit affect the correctness of financial statements.
  2. Determine the extent to which value for money audit helps in enforcing compliance to rules and regulations governing private firms.
  3. Ascertain the impact of value for money audit on the managerial performance of private firms.
    • Research Question
  4. To what extent does value for money audit affect the correctness of financial statements?
  5. To what extent does value for money audit help in enforcing compliance to rules and regulations governing private firms?

What is the impact of value for money audit on the managerial performance of private firms?

PROJECT TOPIC- EFFECT OF VALUE FOR MONEY AUDIT ON THE MANAGERIAL PERFORMANCE OF PRIVATE FIRMS IN ENUGU STATE: A STUDY OF INNOSON TECHNICAL AND INDUSTRIAL CO. LTD ENUGU, EMENE, ENUGU STATE

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