THE ROLE OF AUDITORS IN ORGANIZATIONAL GOALS ATTAINMENT

CHAPTER ONE

INTRODUCTION

Background to study: Internal auditing has undergone dramatic changes and has expended its scope to make greater contribution to the organization goals. Internal auditing is also performing its role in diverse cultural and legal environments within different organizations; which varies in size, structure, purpose and also in persons. We must continually broaden our vision and look for barriers that may stand in the way of universal application of the IIA Standards. We must not feel we have reached the ultimate and that development is not needed. Internal auditors are often called as both a policeman and a business partner. An internal auditor is called as a business partner during his/her dealing with client management, and a policeman because of his/her acts an independent reviewer of management of an organization. Internal auditor as a business partner expected to provide expertise to assist an organization to meet its goals; and as a policeman, internal auditor is looking for weakness and flaws in the internal control system. The empirical portion of this study will provide evidence whether compliance with the internal auditing practices and standards will lead the organization towards its effective internal control system to achieve organization goal or not. Review and evaluation of an internal control system and the quality of performance carries to assigned responsibilities are the basic activities of internal audit. The purpose of the appraisal of the adequacy of the internal auditing is to find out whether the recognized system provides reasonable assurance that the organization’s objectives and goals will be met efficiently and reasonably. An ample control is considered to be present if the internal control planned and organized by the administrative management in a manner, which provides reasonable assurance that the organization’s goals and objectives will be achieved efficiently and reasonably.

Internal audit is an independent appraisal function established by the management of an organisation for the review of the internal control system as a service to the organisation. It objectively examines, evaluates and reports on the adequacy of internal control as a contribution to the proper, economic and effective use of resources.

The role of internal auditing in the review of effectiveness of the internal control system is to find out whether the internal control system is functioning well as it is intended to do. The internal control system is called to be effective, if the administrative management direct the system in such a way which provides reasonable assurance that the organization’s goals and objectives will be achieved. Because the basic aim of internal control system of an organization is to provide management with reasonable assurance that the financial information of the organization is reliable and accurate; the organization compile with the stated policies, procedure and planes; assets of the organization is safeguarded and protected from theft and loss; resources are used efficiently and effectively; and finally recognized goals and objectives for operation. Thus, the internal auditing focuses on this internal control framework.

The Civil Service is an indispensable instrument for the implementation of government policies and programmes. This is because it is through the instrumentality of Civil Service that government policies are translated into services for the people (Maikudi, 2012).  On this note, Ugwu-olo (2007) averred that the success or failure of any policy of government is a function of the disposition of the civil servants to its implementation. Similarly, Abasili (2008) argued that no matter how well articulated government programmes may be, they cannot be successfully implemented without effective administrative machinery whose technical competence, loyalty and commitment should translate ministerial policies and programmes into action.

An essential condition for the survival of an organization lies on the ability of its members to act reliably and efficiently to achieve the objectives of the organization. The substantial coordination of behavior can be achieved in numerous ways. In a very small business, the manager can verify directly that the tasks are performed on the way he thinks which is suitable. But the supervision of the manager and the mutual adjustment among various actors Mintzberg, (1982) are quickly becomes insufficient when the number of the firms increased. However it may be wished to maintain these ways of controlling but it would only be applied to the part of the organization.

Therefore it is necessary that management put in place mechanisms to fill the gap in supervision. Business performance is a major concern these days due to importance of the global competition. One factor of this performance lies on the ethical and responsible behavior of its performers. But at the end of the 20th century, the Enron and WorldCom scandals show that there was a lack of control in organizations (Bertin, 2007).

Following these financial scandals, actions were taken. It has become essential to provide an ethical control in the interest of leading to better take into account the content of internal control, in order to overcome the weaknesses of economic and legal support. In a common interest, ways to measure the impact of moral decisions have been found and the company must be able to justify its activities (Ethical norms and values) this control may be performed by the internal audit (Mercier 2000).

Organizational performance can also be "the ability of an organization to identify and implement appropriate strategies within the framework of the aims it pursues" (Bouquin, 1997). The objectives are vary; organizations may want to become the largest company in the world or to remain a successful specialized business, or even be best able to achieve the goals it has set. Once the purposes have been defined, success depends on the ability to define appropriate strategies and to implement them. Organizational arrangements must ensure the level of performance in both economic and strategic scopes and we call internal control the combination of such devices. It is necessary to periodically test the effectiveness and suitability of a particular aspect of internal control. Auditing is the process of studying and evaluating internal control and certain of its aspects, as well as its expected performance. The ensuing result may help to determine the effectiveness of the company. It is something important because the challenges of every business day are for the companies to be competitive so as not to be forced out of the market.

1.2 Statement of the problem

The auditing function is often regarded to be an independent process of ensuring an accurate and fair reporting of the financial records of the organization and of the effective use of resources. This however does not exclude it from the corperate objective of the organization. It is therefore pertinent that the objectivity function of auditing be aligned with the corperate objective of the organization. As organizations pursue objectives in an economic environment we seek to find out, if internal audit can contribute to corporate goals, it can also help employees keep their place in the company

It could help all the actors of the company in every level to make the company get better. Internal audit is a method of controlling which allows different business partners such as shareholders, personnel, financial institutions the state to ensure the quality and reliability of the information provided. The problem confronting this research is to determine the role of the auditor in the achievement of organizational objectives with a case appraisal of the Oyo state.

1.3 RESEARCH QUESTION

Question 1 

What are the best internal audit practices?

QUESTION 2 

What are the roles of internal audit in organization goals achievements?

1.4 OBJECTIVE OF THE STUDY

1. To have an overview of the roles of the auditor and the nature of the auditing function.

2. To determine the best internal audit practices

3. To determine if auditing is not the backbone of organizational goal attainment.

4. To determine the role of the audit and auditor in the achievement of organizational objective in nestles plc 

1.5 STATEMENT OF HYPOTHESIS

Hypothesis One

Ho: Auditing is not the backbone of organizational goal attainment.

Hi: Auditing is the backbone of organizational goal attainment.

Hypothesis Two

Ho: The role of auditor in the achievement of organizational objective in Oyo state civil service commission is low

Hi: The role of auditor in the achievement of organizational objective in Oyo state civil service commission is high.

1.6 SIGNIFICANCE OF THE STUDY

The study intends to provide project the importance of the role of auditors in the achievement of organizational objective.

It shall also serve as a veritable source of information on the fundamental issues of auditing

The research is also expected to make reasonable impact in the following areas.

1. Enlighten private and Government agencies on the impact of auditing in organizational effectiveness.
2. Educate the researcher’s audience in the concept of auditing so as to increase their awareness level.
3. It  would serve  as a base for future researchers who may want to dive into the world of auditing as their research area
4. It would proffer workable recommendations based of research findings, so as to solve organizational challenges.

 

1.7 SCOPE OF THE STUDY

The study shall appraise the nature of the role of auditing in the achievement of organizational objective with a case study of the Oyo state civil service commission.

1.8 LIMITATIONS OF THE STUDY

However, in the course of this research, the following constraints were encountered thus:

1. Non-availability of enough resources (finance): A work of this nature is very tasking financially, money had to be spent at various stages of the research such resources which may aid proper carrying out of the study were not adequately available.
2. Time factor: The time used in carrying out the research work is relatively not enough to bring the best information out of it. However, I hope that the little that is contained in this study will go a long way in solving many greater problems.

1.9 DEFINITION OF TERMS

AUDITING DEFINED: Internal audit is an independent appraisal function established by the management of an organisation for the review of the internal control system as a service to the organisation. It objectively examines, evaluates and reports on the adequacy of internal control as a contribution to the proper, economic and effective use of resources

ORGANIZATIONAL OBJECTIVE DEFINED: Organizational objective are the ends which the organisation intends to achieve usually defined quarterly, half yearly, or annually  and expressed quantitatively or qualitatively interms of profit, quotas, budgets etc.

CIVIL SERVICE: "Civil Service of the state" means service of the government of a state in a civil capacity as staff of the office of the Governor, Deputy Governor or a ministry or department of the government of the state assigned with the responsibility for any business of the government of the state. (The Nigeria Constitution, as amended, 1999. Section 318)

PUBLIC SERVICE: Public Serviceis a body or organ which enjoys continuity of existence. It is made up of the Civil Service, the Teaching Service, the Health Service, the Local Government Service, the Judiciary, Parastatal Organisations, Government-Owned Companies and Tertiary Institutions.