CHAPTER ONE INTRODUCTION 1.1 Background of the Study The nature of modern-day business ventures centres separate ownership from the management, so much that the two are regarded as the two different entities. Business is entrusted in the in the hands of the manager to be managed on balanced of the owners. This occurs both in private and public organization. However, in public organization, individual group of individuals is corporate bodies etc. are appointed to manage the resources of the government on behalf of the public. Therefore, the needs for the effective and efficient management of those resources cannot be over emphasized. Since modern day business organization admit export to be in charge of the management of the resources. It may be necessary for the owner of the resources to be fully aware of the activities of the organization. This implies that the owners need constant information concerning the actions of the management of the organization particular for some important economic decision. This gave rise to explanation on the part of the manager to the resources owner and consequently, the managers are accountable the resources owners. This is termed as Stewardship Accountancy. However, on the accounts presented by the manager may contain errors and may not disclose fraud may be diligently misleading or deliberately misleading etc. Therefore for credibility to be given to this stewardship accounting, on independent competent and honesty, third part is appointed by the resources owners to ascertain the level of truth and fairness that can be occurred with the statement that is presented by the management. This ascertainment is termed Auditing. Abel (2023), auditing can be since await opinions is on the third parties opinion by an independent impartial and professional person. This implies that auditing may be used as a parameter for measuring the worthiness of an organization. Since the auditor will express an independent opinion. However, editing is compulsory in the public organization as it is in private organization, where the auditing of the management is determined by the owners. This is so particular in this present dispensation which canvasses for transparency and accountability in the public organizations. According to Ridwan (2020) as far as the auditors in the public organization is expressing on independent opinion on the financial statements, then the auditing standard and guidelines applied in the private organizations are equally applicable in the public organization. At this point it should be noted that the emphasis of the study is aimed at pointing out the roles of an auditor in making sure that there resources which belong to the member of the public are effectively allocated and applied. It is statutory required that accounts of the government establishment of Nigeria should be audited. The model finance memorandum for government establishment state that “there shall be established each state, the office of the auditor general who shall be appointed by the government and other responsibilities, here power to carry out on regular basis, the auditing of government establishment account. 1.2 Statement of the Problem With the roles that auditing plays in ensuring accountability in an organization to be constantly audited to determine worthiness of the organization at a point in time. In this regard, carryout auditing particularly in public organization faces a lot of problems. Based on the foregoing therefore, this sub chapter two tries to examine this problems as well as complains difficulties and hindrance, vis-à-vis the administration of government establishment. Auditing as a means of ensuring accountability in organization has not been a very effective tool due to the unenthusiastic way that the government is handling issue concerning auditing of public organization as well as the act that the application of value for money has not been fully operational. Consequently, auditing has not really charged the trends of events concerning the action of employees of public organization particularly in Nigeria. The issue of custodian control is well pronounced in the administration of government establishment. This places emphasis on restriction of expenditure and ensuring the expenditure confirm to the budgeted estimate without examination of the intrinsic value of the resources utilization. This custodian control is rather relative and faith to check upon the ability to perform or deliver. 1.3 Research Questions This research question is formulated: i. How effective is auditing in detecting and preventing financial irregularities within Nigeria government establishments? ii. What role does auditing play in promoting transparency and accountability in the management of public funds in government organizations? iii. What is the impact of auditing on improving the overall financial management and governance practices of Nigeria government establishments? 1.4 Objectives of the Study i. To assess the effectiveness of auditing in detecting and preventing financial irregularities within Nigeria government establishments. ii. To examine the role of auditing in promoting transparency and accountability in the management of public funds in government organizations. iii. To evaluate the impact of auditing in improving the overall financial management and governance practices of Nigeria government establishments 1.5 Research Hypotheses Hypothesis one Ho: Auditing does not significantly contribute to the detection and prevention of financial irregularities within Nigeria government establishments. Hi: Auditing significantly contributes to the detection and prevention of financial irregularities within Nigeria government establishments. Hypothesis two Ho: Auditing does not play a significant role in promoting transparency and accountability in the management of public funds in government organizations in Nigeria. Hi: Auditing plays a significant role in promoting transparency and accountability in the management of public funds in government organizations in Nigeria. Hypothesis three Ho: Auditing has no significant impact on improving the overall financial management and governance practices of Nigeria government establishments. Hi: Auditing has a significant impact on improving the overall financial management and governance practices of Nigeria government establishments. 1.6 Significance of the Study The main significance of the study is in line with the problems earlier identified in view of the inevitability nature of accountability in public organization. In general and government establishment administration. Particularly if the resources are to be effectively and efficiently managed it becomes in expedient to state therefore that the cause could be attributed to lack of accountability in the administration of the government establishment. A rare absence of accountability on a government establishment like Ilorin West government establishment will have a resultant affect e.g. fraud, mismanagement and misappropriation of public funds. On this note therefore, the study intends specifically to achieve the following. To bring to light how auditing of government establishment can ensure accountability and consequently prevent fraud. Mismanagement and misappropriation of public funds. 1.7 Scope of the study This study identified the roles played by the auditors in ensuring accountability in public organization reducing to barest minimum the problem of fraud, mismanagement, auditing of public organization. The study equally examined the internal control system of Nigeria government. In addition to these the study also includes the recommendation based on my research findings. 1.8 Limitation of the study Limited access to relevant and accurate information regarding government financial transactions and records can hinder the comprehensive evaluation of auditing effectiveness. The level of transparency in the Nigerian government may affect the availability of data for analysis. If there is a lack of transparency, it can be challenging to obtain reliable information. Political influences and interference may impact the effectiveness of auditing. Political pressures might affect the independence of auditors and the extent to which they can scrutinize government activities objectively. 1.9 Definition of Key Terms Auditing: It is an independent examination of an expression of an opinion on the financial statements. Auditing Evidence: It is a price of information which should guide the auditor informing an opinion on an organization financial report (Okezie 2020). Internal Auditing: It is an independent appraisal activity within an organization further review of operation as a service to the management (Rasheed 2023). Internal Control: It is a whole system of controls financial and otherwise established by the management in order to carryout out the business of the enterprises in ordery and efficient manner ensure adherence to management policies, and safeguard the assets and accuracy records. Internal Check: It is regarded as indicating the check on the day to day transaction which operate on a daily basis as part of the routine system whereby the work of one person is proved independency or complementary to the work of another (Wills More, 2020).
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