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PROJECT TOPIC- Influence of Internal Auditor on the Total Quality Management in a Business Enterprise

PROJECT TOPIC- Influence of Internal Auditor on the Total Quality Management in a Business Enterprise

Abstract

The project examines the influence of internal auditor on the total quality management in a business enterprise. The study’s main objective is to find out if total quality management really exist in integrated data service limited and also to find out if total quality management influence the functions of the internal audit department. The primary source of data collection was used in gathering data from respondents. A structure questionnaire was designed by the researcher and validity by two experts from the statistics department was used to obtain data, Chi-Square (X2) was used to test hypotheses formulated. It was discovered that there is positive effect on the nature of work in total quality management. The study concludes that total quality management is not just another management theory at its discovery stage but a practiced strategy which many surviving conscious organizations around the globe and of course Nigeria has adopted as a survival strategy. Based on the findings, the study recommends amongst others that all the staffs in the company should be trained to enable them participate fully in the implementation of Total Quality Management. Also, further training should be granted to all staff to enable them understand their role on Total Quality Management.

CHAPTER ONE

INTRODUCTION

  • Background to the Study

Owners who appoint managers to look after their properties will want to know what has happened to their properties. They are not usually pleased when there is a negative report. A famous example of this was in the Holy Bible, the gospel according to St. Matthew chapter 25, when the rich man went on a journey and delivered his goods to his servants to account for the goods with which he has been entrusted. He was not pleased with the servant who had not profitably used the goods he has managed in his absence.

A major problem which has always existed between managers and owners is that when managers report to owners, do owners believe the report? The report may contain error or failure of the manager to disclose some relevant information. Hence the solution to this problem of credibility in reports and account lies in appointing an independent person called the auditor to give a fair report. The requirements of the auditors are enhanced by the internal auditor appointed by management to view the internal controls and checks within the organization to ensure conformity with policies and procedures laid down by management.  

The complete absence in Total Quality Management (TQM) in the internal auditor accountant produced in Nigeria institution has created a great vacuum in the various process of an organization to ensure  the quality of its products. However, the TQM is management approach to long term success through customer satisfaction. Total Quality Management is defined as a continuous meeting agreed customer requirement at the lowest cost by releasing the potentials of all employees (Total Quality Management International 1995).

No gain saying that the quality in goods and services has become a pre-requisite for survival in an increasingly competitive market place around the globe. A united company “McDonald” for years, its theme has been quality, service, cleanliness and values. In Nigeria today, organizations like Chevron, Agip, Shell, Nigeria National Petroleum Company (NNPC) who are survival conscious have operating total quality management (Adebayo, 1966).

In view of the above, the internal auditor in total quality management environment should be a champion and facilitator rather than a police. He should assist management to focus in functional excellence not territory safe keeping. The auditor should audit and test of process effectiveness and efficiency and provide an independent assessment of quality improvement activities (Nixon, 2002).

PROJECT TOPIC- Influence of Internal Auditor on the Total Quality Management in a Business Enterprise

  • Statement of Problem

Since the inception of the Total Quality Management (TQM), the role of the internal auditors in theses companies need to be examined and checked because the idea of Total Quality Management placed a new demand upon the performance measurement and reporting structure of the traditional auditing system, for example, in a Total Quality Management (TQM) environment, the internal auditor examines records that the accountant prepare i.e. if there is any error or fraud on what he has examined based on his opinion. They also assist management in forming opinion on a cost efficient in a business enterprise. Internal auditors often assist management in performing internal review assignments covering, for example human resources, procurement (purchasing), marketing and treasury activities, such review include; identification of risk, the identification of control systems and procedure implemented to manage those risks, to evaluate the overall effectiveness of the design and operation of controls in managing the risk identified and to test control to ensure that the internal controls are operating effectively.

  • Research Questions
  1. Does Total Quality Management really exist in Integrated Data Service Limited (IDSL)?
  2. Does the introduction of Total Quality Management influence the functions of the internal audit department?

iii.    To what extent have Total Quality Management affected the functions of the internal auditors?

  1. Did Total Quality Management (TQM) affect your pattern of workers compared to what it was before?
  2. Where new demands made on the internal auditing functions with the introduction of Total Quality Management (TQM)?
  3. Where staff in the internal audit department sent for training or retraining with the introduction of Total Quality Management (TQM)?
  • Objective of the Study
  1. To find out if Total Quality Management really exist in Integrated Data Service Limited (IDSL).
  2. To find out if Total Quality Management influence the functions of the internal audit department.

iii.    To find out if total quality management affects the functions of the internal audit.

  1. To evaluate if the Total Quality Management affect your pattern of work as compared to what it was before.
  2. To find out if new demands made on the internal auditing function with the introduction of Total Quality Management.
  3. To find out if staff in the internal audit department sent for training or retraining with the introduction of Total Quality Management.
  • Statement of Hypotheses

In view of the above stated objectives, it is important that the following hypotheses are formulated.

Hypothesis One     

HO:   Total Quality Management (TQM) has a negative effect on the pattern of work.

HI:    Total Quality Management (TQM) has a positive effect on the pattern of work.

Hypothesis Two

HO:   There are no 21st century challenges on Total Quality management (TQM) in Integrated Data Service Limited.

HI:    There are 21st century challenges on Total Quality Management (TQM) in Integrated Data Service Limited.

  • Significance of the Study

The significance of this study on the role of internal auditor in Total Quality Management is as follows;

  1. It will provide basis for qualitative management in the sphere of government.
  2. It will serve as reference material for future researcher.

iii.    It will provide a basis for the enforcement of regular placement of companies.

  1. It will enhance the reliability to be placed on prepared financial statements of corporate organization.
  • Scope of the Study

Due to not sufficient time and financial constraint and for the fact that the company is based on Nigeria and the result obtain cover a period of five years from 2009 – 2013.

In order to ease the problem of internal auditor of the firm, it should be noted that there are many factors which affect qualitative management other than the role and dividend policy. However it is recognized that some of the accountants may be characterized by different accounting policies and in some cases window dressing. All these must therefore be born in mind when drawing conclusion and influence from the result of this study.

Also for the sake of simplicity and proper analysis a number of assumption are made in this study. They are as follows;

  1. That the information supplied by the firm in this questionnaire and their published account are accurate and correct.
  2. The internal audit risks are assumed not to be constant and they are the same in the entire firm.

This study was carried out using Benin City branch of IDSL though its headquarter is in Lagos and a sample size of 60 was used for effective result. 

  • Limitations of the Study

In the course of this study, the researcher encountered a lot of problem to contend with which militated against the smooth course of the study. Following limiting factors were encountered;

  1. Since Total Quality Management (TQM) is a new era of k knowledge there was constraining factors like books, journals and literatures.
  2. Time constraint: There was actually no adequate time available for the researcher in the course of this project work for the fact that the work was carried out in the midst of moral lectures, tests and exams. 
  • Definition of Terms
  • Internal Audit: Internal audit can be defined as audit carried out by employees of an enterprise who are specially assigned by management to conduct a review of the accounting and internal control systems and to make recommendations to management on how to improve the system (Institute of Internal Auditors, 1998).
  • Internal Control Represent: All such techniques, policies rules and procedures which the management of an organization has developed for its day to day operations. It is the effective and efficient way of managing the affairs of an organization that leads to the birth of Total Quality Management (TQM).

Total Quality Management: A critical look on the word Total Quality Management (TQM) applies to quality at all levels, all employees, all functions, processes, input, output, all supplies and customers. Quality in Total Quality Management (TQM) is meeting concrete demands, expectations and desire e.g. attitude, behaviour, credibility, consistency etc which they reduce error, waste, re-warps and scraps.

PROJECT TOPIC- Influence of Internal Auditor on the Total Quality Management in a Business Enterprise

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