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PROJECT TOPIC- STRATEGIES FOR IMPROVING AUDITING PRACTICES FOR PROPER ACCOUNTABILITY IN BUSINESS ORGANIZATION IN EBONYI STATE

PROJECT TOPIC- STRATEGIES FOR IMPROVING AUDITING PRACTICES FOR PROPER ACCOUNTABILITY IN BUSINESS ORGANIZATION IN EBONYI STATE

CHAPTER ONE
INTRODUCTION

Background of the Study
For every on going concern, there is need for investigation, accountability and probity. In order to satisfy this quest, auditing is found wanting and necessary in order to ascertain the true and fair view of financial position of the organization concerned.
In modern times, economic resources, properties, business entities etc are owned by one person or group of persons and managed by another person or group of persons, a phenomenon known as separation of ownership from control.

Again, elected or appointed officers of social clubs, students union, town unions and other social organizations collect and disburse funds on behalf of their members. Heads of government also manages the revenue and other resources accruing to the citizens of the country on behalf of the people. The cradle of business organization revealed that most business sets up were managed by their owners. The ownership managers was the financial provider and contributor to the enterprise, but with the advent of large scale production and development in scope and in scale of business, a huge capital beyond that affordable by the sole proprietor was needed. Consequently contributors, hereafter called shareholder were required to raise the fund for the business.
The emergence of these shareholders led to the divorce of the business to the hands of the managers as all of them cannot become the owners and managers at the same time. Smith and Keenan (2002), noted that law has made it legal that a business is a legal person different from the owners. Thus, the management of the business will be entrusted to the hands of people who have no financial claims to the business. The responsibilities of the managers is to utilize the shareholders fund efficiently and effectively and also to prepare a quantitative and authentic financial statement (report) stating how the funds or resources was utilized. The mangers periodically present stewardship reports to the shareholders showing the financial position of the business. Such statement presented by the managers may not contain the following.
i. Fraudulent and mismanagement practices
ii. Fail to disclose relevant information such as over invoicing
iii. Fail to conform to financial regulations.
The shareholders may be sceptical about the financial report, particularly as the law does not permit them individual access to go through the books of the company in their desire to keep abreast of the performance of the managers. This sceptism aroused the need for surveillance over the activities of the non-owner managing directors. For the shareholders to be ensured that the reports presented to them by the managers represent the true and fair view of the business.

They appoints a third part an auditor (a verify person who conduct an audit or someone who checks account record) to perform an audit on the company’s account and express his opinion as regards to the true and fairness. The companies and Allied Matter Act (2004), stated that “Every company shall at each Annual General Meeting (AGM) appoint an auditor or auditors to audit their financial statement or report. However, the importance of audit cannot therefore be over looked, since all investors whether creditors or shareholders are entitled to look upon the auditor as the guardian of their various interests.

Section 360 of companies and Allied Matter Act (2004), enumerated the primary objectives of an audit thus:
i. Whether those financial statements show a true and fair view and comply with the relevant statutes and standards.
ii. Whether proper records have been kept.
iii. Whether the financial statements are in agreement with the records.
Auditing according to Santocki definition in Chukwu (2002), can be defined as an examination of the authenticity and reliability of a firms business documents and records. It involves making enquires to ascertain that the financial statements on which the auditor is reporting on and which have been prepared from these records display a true and fair view of the state of affairs at the end of the year. In the same view, Taylor and Glazzen definition in Chukwu (2002), sees auditing as any function that involves the strutting of someone else’s representation. In a narrow sense a financial audit can be described as a systematic examination of operations to determine principles, management policies or state requirements.
The American Accounting Association (A.A.A.) gave a better and more general definition of auditing in its publication (A statement of Basic Auditing Concept) (ASOBAC).
“As a systematic process of objectively obtained and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of respondence between those assertions and established criteria and communicating the result to interested users”.

Equally, operation procedures of Nigeria auditing guidelines described auditing as an independent examination of an expression of opinion on the financial statements of an enterprise by an appointed auditor in pursuance of that appointment and incompliance with any relevant statutory obligation.
However, auditing practices for proper accountability in business organizations requires an auditor to report in his opinion whether the balance sheet, profit and loss account are shown and presented, and items are described in such a way that show not only a true but also a fair view and give in a prescribed manner the information required by the Companies and Allied Matters Act (CAMA). Therefore this study is designed to find out the strategies for improving auditing practices for proper accountability in business organizations in Ebonyi State.

PROJECT TOPIC- STRATEGIES FOR IMPROVING AUDITING PRACTICES FOR PROPER ACCOUNTABILITY IN BUSINESS ORGANIZATION IN EBONYI STATE

Statement of the Problem
There is no doubt that fraud, misappropriation, mismanagement and embezzlement of fund have become the order of the day in most business organizations in our country Nigeria, and Ebonyi State is not exception. That is why most of the business organizations are still operating in low level of production and services. Some business organizations in Ebonyi State are still battling with the same problem despite the various measures which have been adopted to curb the problems.
This study is therefore concerned with determining the strategies to improve auditing practices in order to ensure proper accountability in business organizations in Ebonyi State.

Purpose of the Study
This study aims at investigating the strategies for improving auditing practices for proper accountability in business organizations in Ebonyi State.
Specifically the study sought to:
1. Ascertain to what extent the existing audit practices shows proper accounting purposes in business organizations in Ebonyi State.
2. Ascertain to what extent the statement of accounts of the companies comply with the requirements of Companies and Allied Matters Act (CAMA).
3. Ascertain to what extent the statement of accounts of the companies present true and fair view of the period under review.
4. Determine the strategies for improving auditing practices in business organizations in Ebonyi State.

Research Questions
1. To what extents does the existing audit practices in business organization in Ebonyi State shows proper accountability?
2. To what extent does the statement of accounts of companies comply with the requirement of Companies and Allied Matters Act (CAMA).
3. To what extent does the statement of accounts of companies present its true and fair view of the period under review?
4. What are the strategies for improving auditing practices in business organizations in Ebonyi State?

Significance of the Study
This study will sensitize the various Business Organization In Ebonyi State, the need to improve the auditing practices in their organization so as to ensure accountability and curb corrupt practices in their organizations. It will be of benefit to both local and foreign investors. Auditing reveals the true and fair view of an organization. Through the audited account, the investors get to know the financial position of the organization they want to invest in. Also, business organizations will find this work rewarding. It will help them to know how to improve their auditing practices in order to ensure accountability.
Finally, this study will instill discipline in the minds of the employees of an organization such that it will prevent irregular aware that they should give account of their works. Students shall also benefit from this study, as it would pave way for further study.

Limitations of the Study
The following where the challenges encountered by the researcher during the process of carrying out this study. They are:
1. Respondents Attitude: Some of the respondents were not co-operative as they displayed negative attitude towards this study. But the information obtained from those who co-operated were enough to carry out this research work.
2. Lack of Finance: Due to lack of finance the researcher could not cover all the business organizations in her case of study, but the selected organizations covered were sufficient enough to carryout the research work since what is applicable in one organization is almost the same in another organization.

Scope of the Study
The study will cover six (6) selected business organizations in Ebonyi State Nigeria.
The study is designed to investigate on the strategies for improving auditing practices in business organizations in Ebonyi State, to what extent does the statement of account of the companies comply with the requirement of the Companies and Allied Matter Act (CAMA), to what extent does the statement of account of companies present its true and fair view of the period under review, ascertain how the existing audit practices in business organizations in Ebonyi State ensures proper accountability, the effects of having the account of business organizations un-audited for a very long time.

PROJECT TOPIC- STRATEGIES FOR IMPROVING AUDITING PRACTICES FOR PROPER ACCOUNTABILITY IN BUSINESS ORGANIZATION IN EBONYI STATE

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