CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
An essential condition for the survival of a manufacturing industry or more generally of an organization lies on the ability of its members to act reliably and efficiently to achieve the objectives of the industry. The substantial coordination of behavior can be achieved in numerous ways. Supervision of managers and staffs of manufacturing industry is becoming ineffective. However it may be wished to maintain these ways of controlling but it would only be applied to the part of the industry (Brown, 1999). Therefore it is necessary that management put in place mechanisms to fill the gap in supervision. The financial and corporate goal attainment of a manufacturing industry is underpinned by effective internal systems in which the practices of the internal audit has an important role, raising the reliability of the internal control system which is always aimed at improving the process of risk management, and, above all, satisfying the needs of internal users (Fama, 2008). The effective practice of internal audit also supports and enhances the system of responsibility that the executive directors and employees of manufacturing industry have towards the owners and other stakeholders. The Internal Audit Department provides a reliable, objective, and impartial service to the management, board of directors, and audit committee, while stakeholders are interested in return on investments, sustainable growth, strong leadership, and reliable reporting on the financial performance and business practices of a manufacturing industry. Proper understanding of the role and importance of the internal audit is one of the preconditions for successful strategy implementation and attainment of corporate goals of a manufacturing industry.
However, this research aims to examine the effect of internal audit practice on corporate goal attainment of some selected manufacturing firms in Port Harcourt, Rivers State. Corporate goal attainment by manufacturing industries is a major concern these days due to importance of the global competition. One factor of this corporate goal attainment lies on the ethical and responsible behavior of its managers and employees. But at the end of the 20th century, the Enron and WorldCom scandals show that there was a lack of control in companies (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 practice, 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 manufacturing industry must be able to justify its activities (Ethical norms and values), and this control may be performed by the internal audit (Mercier 2000).
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