AUDITING AS AN AID TO ACCOUNTABILITY IN THE PUBLIC SECTOR A CASE STUDY OF NNPC ENUGU STATE

CHAPTER ONE

INTRODUCTION

1.1 AN OVERVIEW ACCOUNTABILITY

This is now a national issue. The increasing incidence of fraud and misappropriation of funds and property by Accounting officers and chief executive in the public sector of the Nigeria economy pose pertinent question as to whether auditing plays any significant role towards ensuring proper accountability and judicious use of fund set aside for various purposes and corporate objectives. Some programmers and activities organized by these individuals are assumed to be done on behalf of the people therefore deserted to be assured the resources which they put at the disposal of these accounting officers are efficiently, effectively and economically managed, since it is known, that not all of us are judicious in the in the management of our private affairs and much less, the public affairs entrusted to us. A case in point is about distressed banks like continental marchant bank and Nigeria marchant bank. Poor management was the problem with these banks, if these banks hard carried out proper audit and made use of the recommendation, the directors would have reduced proper accounts of their deeds.

Accountability has clearly manifested itself as a principle to be pursued if the status quo is not to be perpetrated. Several past leader have pledged to introduce a more responsible system of government with accountability but their subsequent conduct or governance have show that they have little or no understanding of the definition and application of accountability, hence the question of what then is accountability arises. Accountability as it is contained in long man dictionary of contemporary English is the condition or quality of being able (that is having) to give an explanation for ones actions. Accountability is also defined as the management of funds and other assets of which individuals or institutions had been custodians.

Auditing is regarded as one of the more recently established professions born out of the complexity of modern business world. It became relevant so as to discourage men from erring and to expose those who erred when they give account of how they managed the funds and property entrusted t them. This account or report is usually done by means of financial statement in order to verify the true and fairness of this report, an independent person- an auditor will audits the account. An audit is an investigation by an auditor into the evidence form which the final revenue accounts and balance sheet or other statements of an organization have been prepared in order to ascertain that they present true and fair view of the summarized transactions for the organization at the end date, so enabling the auditor to report thereon. There are more involved definitions such as; that issued by the consultancy council of accountancy of accountancy bodies (CCAB), which defined an audit as “ ….the independent examination of and expression of opinion. On the financial statements of an enterprise by an appointed author in pursuance of that appointment and incompliance with any relevant statutory obligations.