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THE IMPACT OF INTERNAL ADDITING ON THE PERFORMANCE OF A COMPANY. (A CASE STUDY OF ZENITH BANK PLC, AGBOR)
This research was undertaken to the impact of internal audit on the performance of a company. The purpose was to find out the functions they have contributed to the overall of the company. Others includes whether internal audit has any problem hindering the performance of the staff duties in the company and the resultant effect if so, in carrying out this research, the researcher apart from zenith bank plc Agbor sampled some companies based in Agbor. Some of the major findings were that internal audit performs the following function which is internal audit appraisal activities or staff performance in a company and compare it with the set standard. Ensure that company’s records are accurate and reliable. To see that the entire department the company complies with companies policies guide against fraud with the organization they (internal auditors) are suggestion to management on ways of improving performance and guiding the organization against future short comings. Finally, there is a great need for internal audit, companies are required by the combined code of corporate government the absence in any company has some attendance effects including production of accurate and unreliable record, prevalence of fraud and mix use of fraud and a lot of operational deficiency on the part of the worker.
1.1 BACKGROUND OF THE STUDY
This research is an attempt to study the impact of internal auditing on the performance of a company using zenith bank plc as a case study.
Therefore accountability and reporting in both public and private sector can not be emphasized. The human material and financial resource of the nation are being managed by the executive on behalf of the citizens, while in corporate bodies or set up organization, the managers manages the affairs of the company.
The long outstanding issue is how to ensure that the executives and manager (directors) perform their stewardship function satisfactory. This desire has led to the introduction of the internal control which has been defined by ICAN, ANAN AND ACCA as the whole system of controlling financial and other established management in order to carry the business of the enterprise in a more orderly and efficient manner, ensuring adherence to management policies safeguard the asset and secure as possible the completeness and the accuracy of the records of the internal audit which constitute part of the internal control system established by the management which assist management to determine the result of performance of delegated responsibilities and authorities of ascertain if the companies financial and accounting policies procedure and control are implemented.
Internal audit has therefore been defined by “J.T.U” Okolo (1980) as the independent review or appraisal within the organization by the specially assigned staff of organization of the financial accounting and all other operation as a basic for protective and advisory service to manage. This research therefore is meant to evaluate and bring to limelight the role played by the internal audit to a company’s performance. Thus the researcher titled this work “the impact of internal audit on performance of a company”.
1.2 STATEMENT OF PROBLEM
Companies fund and properties are entrusted to certain individual or employees in the companies and in most cases the individual work are not brought under thorough supervision.
The result therefore is keeping of incomplete records of accounting failure to adhere strictly to companies accounting standard and guidelines.
This research therefore attempts to highlight the impact of internal auditing on the performance of a company and makes suggestion about possible solutions.
1.3 OBJECTIVE OF THE STUDY
This research work is undertaken to study the impact of internal auditing on the performance of a company. It is also to find out the extent of which management has appraised their own operation and how competent they have been in determining operation weakness and ills.
1.4 RESEARCH QUESTIONS
For the purpose of this research study, the following questions are developed:
1 To what extent does audit ensure the accuracy of and reliability of accounting records in companies?
2 To what extent does audit report express usual financial situation.
3 Does audit evaluate reports and account given to management?
4 To what extent does adequate internal control system facilitate auditing process?
5 To what extent does the company understand the true and fair view of the auditor?
6 What is the proper prospective of the auditor’s job?
1.5 RESEARCH HYPOTHESIS
1 Hi: Audit ensures accuracy and reliability in a company record:
Ho: Audit does not ensure accuracy reliability in companies’ record.
2 Hi: Audit reports express usual financial situation
3 Hi: Audit evaluates reports and account given to management.
Hi: Adequate internal control system does not facilitate auditing process?
4 Ho: Does the companies have confidence in auditors report?
1.6 SIGNIFICANCE OF STUDY
This research work is intended to offer different levels of significance to various categories of readers and those who may like to make reference to the topic of study. The significance of the study is that, it will highlight the advantages on the company’s performance by having internal audit. Internal audit when established will in no doubt contribute to the successful implementation of management policies as well as safeguard management policies as well as the company’s asset and enhances operation effectiveness and efficiency.
1.7 LIMITATION OF STUDY
There is no research study no matter how well conducted that is free from certain contain constrains. For instance, time compelled this research to be restricted to Zenith Bank Plc, Agbor Branch. Staffs are not usually or easily co-operating which forced the researcher to visit their offices severally before they could complete the questionnaire.
1.8 DEFINITION OF TERMS
1 Audit; Audit is the examination of an expression of opinion on the financial statement of enterprise by an appointed audit in pursuit of what appointment.
2 Stewardship: Stewardship is the act of taking care or managing something, for instance, property of an organization money or valuable object on behalf of the owner (shareholders)
3 Impact: Impact is the powerful effect that a factor has over a situation on somebody of something.
4 Appraisal: Appraisal is a judgment of value of performance with set of standard goals and objectives.