ABSTRACT
This research was an attempt to examine “Finance and Auditing Performance in Public Organisation”. However, the objective of this study is to verify impact of internal and external control on the overall management of Nigeria Police Force. The methodology used involved collections of data through primary and secondary sources questionnaire were administered, while hundred (100) structured on staffs of the Nigeria Police Force and all the questionnaires were returned. Data generated were analysed through percentages and the use of chi-square statistical method. Findings of the study showed that lack of good internal and external auditing control is a major cause of fraud in Nigeria Police Force, it also revealed that Nigerian police force with internal and external auditing system can prevent the menace of fraud.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Both internal and external auditing is important every organization for the control and check of employee fraud and other irregularities. Auditing is a Latin word but when interpreted into English, it means “He hears According to International Audit and Assurance Standards Board (IAASB), a sub-committee of the International Federation of Accountant (IFAC) from the above defines an audit “as an independent examination of and expression of opinion on the financial statements of a business enterprises by an appointed auditor in accordance with his terms of “appointment and in compliance with relevant statutory and professional requirements”. Auditing IS also “An integrated process of accumulating ad evaluating evidence by a competent independent person about quantifiable information of a specific economic entity for the purpose of determining and reporting upon the degree of correspondence between the quantifiable information and established criteria. External auditor is a member of a certified or chartered accountant firm whose responsibility is to form and express a professional opinion on the accounts to be present by directors to shareholders, while internal audit is an independent appraisal activity within an organization for the review of operation as a service to management. It is a managerial control which functions by measuring and evaluating the effectiveness of other control.
Internal check has been defined as the check on the auditing or auditor’s incidental function to check and control employee. Although, there is the management of the organization that is responsible for installing and maintain sound internal control system which include internal auditors and external auditors who review the system force and audit financial statement, fraud and mismanagement are still often reported. There have been cases of fraud arising from deliberate action in materially misrepresenting financial result either to cover up deteriorating state of affairs in the organization or secure an advantage for several members of management.
The importance of reliable information and the consequence of fraudulent representation in financial statement are: Economic decision in every society must be based upon information available at the time, the decision is made. For example, the decision of a bank to make a loan to a business is based upon previous financial condition of the company as reflected by its financial statement and other factors. If the decision is to be consistent with the intention of the decision-makers, the information used in the decision process must be reliable. Unreliable information can cause inefficient use of resources to the detriment of society and the decision makers themselves. As society becomes more complex, there is increased like hood that un-reliable information will be provided to decision makers.
The very first audits were detailed review of records designed to determine whether each transaction was recorded in the proper account and in the correct amounts. The primary purpose being the detection of defalcation and the determination of whether person in influential position were acting and reporting responsibly.
After the industrial revolution, the scope and complexity of business expanded greatly. As organization increased in size, they employed large number of peoples, and the accounting system becomes more highly developed. With an expanded accounting system and more people involved, it was possible to segregate duties within and organization. Due to the segregation, the function of asset custody and record keeping were separated, and other effective internal controls were developed to protect assets, prevent and detect defalcations. Internal auditors also become a major part of internal control system. It was then realized that the objectives of fraud detection could be accomplished more effectively than rough adequate system of internal control.
1.2 STATEMENT OF THE PROBLEMS
The essence of auditing and finance system in public establishment like in the Nigeria Police Force is to complement each other in the effective control and check of fraud, mismanagement and other irregularities in the organization. But the fact is that even at the utilization of both the Nigeria Police Force, there still remain one of such public establishment that witness a lot of fraud, mismanagement and other irregularities. It becomes important to investigate in this study, the effectiveness and efficiency of both internal and external auditing system in the establishment in achieving the set objectives or the extent each has complemented each other in the effective control and check of fraud and other irregularities in the organization.
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