THE SIGNIFICANCE OF AUDITING IN THE DEVELOPMENT OF ACADEMIC INSTITUTIONS IN NIGERIA

THE SIGNIFICANCE OF AUDITING IN THE DEVELOPMENT OF ACADEMIC INSTITUTIONS IN NIGERIA

CHAPTER ONE

1.1     Background information

Auditing has been the most vital function of every management in any organization, its usefulness cannot be over emphasized because it aids management in arriving at a good decision making. Academic institutions cannot be left out in the train of this activity of auditing record as well as staff. It is on this basis that stems out the need of researching into the significance of auditing in the development of academy institutions in which Maritime Acadeny of Nigeria, Oron, Akwa Ibom State happen to be my case study.

Internal auditing can be defined as an independent appraisal activity within an organization for the review of operations as a service to management. It is a management. It is a managerial control which functions by measuring and evaluating effectiveness of other controls.

The ultimate objectives of all academic institutions is to make sure that the institution is run in a smooth manner, it would be very difficult if not impossible, to run an academic institutions smoothly without the help of auditing and keeping of complete records.

Management cannot make any decision without an up to date record keeping as well as auditing the records of daily activities and auditing these records is bound to collapse at any moment. Few of our traders, especially the so called petty trader “audited records of what they buy and sell, and what they pay and received. In short their business proper auditing of fees collected. Other changes collected, grant/allocation received from government, expenditure incurred (capital and current expenditure). Different vouchers raised, and other financial transactions involving institutions and the outside world.

Apart from that, there are other reasons to be added to the above reasons why proper auditing are need in the academic institutions:

(i)      During the time the salary of workers will be paid, the management will need the audited record which will tell them the exact amount each staff will be paid.

(ii)     A staff needed to be promoted from one level to another, and this can only be done when there is an audited record which will tell when that staff started work and numbers of years he/she stayed in the institution to make sure that the institution grows up.

(iii)    No human being can live without having one problem or the other and through this problem he/she may apply for advance salary will be granted to him or her, the management need to check the audited bank account records of the institution to know whether there is a sufficient cash at the bank to grant such pre-payment.

1.2     Statement of Problems

          There is accurate records auditing of daily financial transactions in some selected secondary school in Oron which can help in management decision making. The selected secondary schools in Oron Local government are making use of the audited financial records, which aids the management decision for the overall interest of the institution. This daily records auditing help in:

(a)     Running the institution more appropriately.

(b)     Eliminating fraud embezzlement and theft which in the institutions.

(c)      Providing information for effective management decision making.

The selected secondary schools are running smoothly due to the availability of audited records and the management are making sure that all transactions going on are properly documented for auditing so that the institutions can stand as the best institutions in the federation.

The first stage of problem in this research is to see how audited records could be used standardize the true financial position in the academy.

The second problem, the study need to tackle is how to apply the audited record in achieving an effective management decision in the academy. More so, the next problem emphasized by the researcher is how to properly achieved or attain the indebt. Usefulness of daily audited records to improved the accounting system of the institutions.

Finally, the researcher also emphasized on how daily financial audited record can be used to reduce if not eliminating fraud of theft within the academic institution.

1.3     Objective of the study

The study enables the management of an institution to know the type of records to be kept for the smooth running of an institution. Through this study, the weak point of every staff is easily identified. The tax authority can easily assessed the institution with the help of the auditing record availability.

This study enables the public to invest their money in any institution without any fear. With this study, the government can quickly assist the academic institution because accurate auditing records are available to show the present position of the institution.

1.4     Research Questions

          The research asks the following questions:

(i)      Does the availability of audit encourages efficiency in the institution?

(ii)     Is it necessary to audit every information found in the record of the institution?

(iii)    Is it proper for staff in the institution to be audited?

1.5     Research Hypothesis

          These are start as null and alternative hypothesis:

  1. HO: The management of the Maritime Academy of Nigeria, Oron need proper auditing records of day to day transaction for the smooth running of the institution.

HI: The management of Maritime Academy of Nigeria, Oron does not need proper auditing records of day to day transaction for the smooth running of institution.

(2)     HO: An auditing system is a major tool used by management to aid a major solving and decision making.

          HI: An auditing system is not a major tool used by management to aid in problem solving and decision making.

(3)     HO: All academy institutions do not need proper auditing records to know the exact fees collected at a particular session.

          HI: All academy institutions do not need proper auditing records to know the exact fees collected at a particular session.

(4)     HO: The management of Maritime Academy of Nigeria, Oron needs accurate auditing records to know the strength of staff in the institutions, the number of hours each staff put to make sure that the institution grows up.

          HI: The management of Maritime Academy of Nigeria, Oron does not need accurate auditing record to know the strength of staff in the institutions, the number of hours each staff put to make sure that the institution grows up.

 

1.6     Significance of the Study

It is expected that this write up will be useful to the students, the government, the management of the institution, the prospective investing public, and the tax authorities.

It is also intended that this study would be of help to students in the department of business administration who may in future wish to research on the topic.

It will be of significance to readers of this topic/project because it would help throw some light in the understanding of the significance of auditing in the development of academic institution in Nigeria, in a not for profit making organizations with special reference to Maritime academy of Nigeria, Oron.

1.7     Scope of the Study

The scope of this research is focused on examining the significance of auditing in the entire management and activities carried out in Maritime academy Oron, it involve the management decision making of the institution through proper auditing of day to day transaction. It streamlines and expresses the rule governing auditing as well as accounting convention.

1.8     Limitation of the Study

The limitations include the time within which the project was stipulated to be complete which is one semester period. This was relatively short compared to the amount of work require to be done.

Another area of limitation is financial consideration. The cost of moving around the school to conduct the study survey, the study of the sample population, administered of questionnaire collect and collate of the responses, as well as the printing of material for their report was quite considerate.

Nevertheless, the researcher was able to overcome some of these imperilment and to meet the required standard of the research project.

1.9     Definition of Terms

(i)      Accounting Standard: Are statement expressing the least expected standard agreed to be the best practice in a given environment or circumstances for the presentation of accounting information.

(ii)     Internal Auditing: can be defined as an independent appraisal activity within an organization for the review of operations as a services to management.

(iii)    Cheque: is a written order to a banker to a certain sum of money to the person name (J.S. Etukudo, 1994:8)

(iv)    Capital: may be defined as wealth reserved or set aside for the production of further wealth (J.V Anyaela, 1995:44

(v)     Agent: is the one who acts on behalf of another person.

(vi)    Cash Book: is a book used in recording cash transactions.

(vii)   Personal Account: It records transaction of personal nature.

(viii)  Debtors: Are people who one money or person to whom goods or services have been sold or rendered on credit (J.S. Etukudo, 1998:5)

 (ix)   Creditors: Are people to whom money is owned or person from whom goods or service have been bought on credit.

(x)     Nominal Account: Are account that deals with income and expenditure of a business.

(xi)    Return Inward Book: is a book that record all sales returns.

(xii)   Petty Cash Book: A journal which record petty cash (S. Lola Akintelure, 1995:11).

(xiii)  Real or Property account: Is an account that deals with assets such as motor car, type writers, generator or plant, stock in trade, machinery and cash, etc (J.O Omuja, 1983:7)

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