ABSTRACT
This is a research work that is carried out on the impact of audit report on organizational performance, Ughelli Branch. This study explains what audit is all about, stating clearly that it is a written report about the accuracy and reliability of a client by a qualified auditor which is presented to the management in form of financial statement. Base on this report, the auditor goes on to express his opinion on whether the financial statement of the organization to shows a true and fair view during the year under review. The study clearly review the problems of financial statement of an organization, the areas to be covered on the study which is restricted to P.H.C.N Ughelli in particular, the source of information which involves the use of questionnaires and time limit given to complete the study. Report writing has to do with communication and conveying information and ideas to someone else. This testifies if the report is writing by an independent public account on the basic of a standard examination of the financial statement of a client’s company. The reporting auditor has a message, which he wishes to convey to those who will need his report. In writing a report, an auditor must assume that his researcher will have some basic knowledge of business operators of accounting statement and of the particular company to which the report may concern. The auditor must be independent. The American institute of certified public accountants has established some standards that are to be observed by its member in their professional work. The original under review must have an internal control system, which contain its plan, assignment and responsibilities. The auditor work is carried out at the client’s premises auditors expresses an unqualified opinion on a client’s financial statement when the report does not contain certain reservations. The qualified opinion restricts the auditor’s responsibility for fair presentation in some areas of the financial statement.
TABLE OF CONTENTS
Title i
Approval ii
Certification iii
Dedication iv
Acknowledgement v
Abstract vi
Table of content vii
CHAPTER ONE: Introduction
- Background of the study 1
- Statement of the problem 2
- Purpose of the study 3
- Research questions 3
- Significance of the study 4
- Scope/Delimitation of the study 4
- Limitation of the Study 5
- Operational definition of terms 6
CHAPTER TWO: Literature Review
- Introduction 8
- The Boar of Directors and Its Members 10
- Power of the Board 11
- The General Managers and his Principal Officers 11
- Financial Department 15
- Importance of Power 18
- Qualification of Auditor 19
- Auditors Examinations and Evaluation Standard 20
- Internal Control 21
- Adequate Planning 22
- Audit Evidence 24
- Form and Distribution of the Report 25
- Report on Group Account 25
- Timeless of Reporting 25
- Financial Reporting 26
- Qualified and Unqualified Opinion 27
- Report to Management 28
- Relationship of Auditor to their Parties 28
CHAPTERTHREE: Research Methodology
- Introduction 30
- Research Design 30
- Population of the study 30
- Sample size 30
- Sampling Techniques 31
- Research Instrument 32
- Validation of the Instrument 32
- Reliability of the Instrument 33
- Method of data collection 33
- Method of data analysis 33
CHAPTER FOUR: Data Presentation and Analysis
4.1 Introduction 35
4.2 Data Presentation and Analysis 35
4.3 Discussion of Findings 42
CHAPTER FIVE: Summary, Conclusion and Recommendations
5.1 Summary of findings 44
5.2 Conclusion 45
5.3 Recommendation 45
Bibliography 47
Appendix 48
Questionnaire 49
CHAPTER ONE
INTRODUCTION
- Background of the Study
Audit means written reports about the reliability and accuracy of an account by a qualified person known as an auditor. In Nigeria, the companies and allied matters degree of 1990, section 331 made it compulsory for all corporate bodies to have their accounts audited by professional auditors. The directors or management of organization produce a report called the financial statement while the auditor expresses his opinion on whether such financial position shows a true and fair state during the year under review.
The report prepared by management on which the auditor expresses his opinion is very vital since used by other interest parties (internal and external). Internal users are potential investors, financial analysis etc. hence, the law has recognized that the report be scrutinized by an independent person known as an Auditor. Also, the auditor’s opinion that has been embodied in written form is called Auditor report, which is addressed to those the auditor is responsible from the foregoing, it is realized that audit is very important in the organization operation (particularly with reference to the Power Holding Company OF Nigeria Ughelli). Hence, audit report is very essential in all planning and operation of the organization.
However, its importance cannot be underestimated since the audit may be held liable to a very great extent for what he stated or does not state as his opinion and the responsibility may extend not only to his immediate client, but also to the limited party.
- Statement of the Study
The major problem of this study is centered on the Audit report of P.H.C.N., Ughelli.
- The need to test accuracy of the financial statement prepared from the accounting record of the organization.
- That state of affair of the financial position of the organization. That is whether the financial position shows a true and fair view of the organizational operation according to the best information and explanation given to him and as shown by the books if not in what respect, it is false or incorrect.
- Proper utilization of funds by management of the organization
- The implementation of the recommendation made by audit report for the purpose of the organization growth (particularly the P.H.C.N ughelli).
- The need to check and examine the entries in the book of account.
- Objectives of the Study
The objectives of this research on the audit report of the organization particularly P.H.C.N ughelli are as follow:
- To know the true and fair of the financial position of the organization operation.
- To know the accuracy of the financial statement of the organization (P.H.C.N)
- To know the degree of efficiency and economic operation of the organization.
- To know if actually the recommendation made by the auditor report are implemented in order to ascertain the extent of the organizational growth achieved in the organization (P.H.C.N ughelli)
- Research Questions
The following research questions will be answered in the course of this work
- How does audit report create an impact in the power holding company of Nigeria ughelli?
- Who is responsible for the preparation of an audit report?
- What are the significant relationship between an audit and its impact in the power holding company of Nigeria ughelli.
- What are the importance of an audit report in the power holding company of Nigeria, ughelli?
- Significant of the Study
The importance of this research on the audit report of the power holding company of Nigeria ughelli is stated below:
- It helps to know the effective operation of the organization (P.H.C.N)
- It help to test the organization posting of account if they are posted correctly
- It help to know the organization state of financial position (P.H.C.N)
- It help to determine if the auditor recommendation increase the growth and development of the organization.
- Scope of the Study
The study is restricted to the public sector organization with particular reference to the Power Holding Company of Ughelli, Warri. It may include the audit report and some importance aspect of the audit (general standard and standard of examination and evaluation as regards his independence of judgment were included). It does not include the auditor’s report of a limited liability company as regulated by the company degree of 1968.
The investigation were limited to audit report and its impact on public sector organization with respect to Power Holding Company of Nigeria, Ughelli being a corporation owned by federal government, the study of its audit report shall be in accordance with the provision of the degree no.24 of 1st April 1972 section 18.
(2) (3) and other were limited to library facilities, information from the organization and other document evidence only.
This study focused on the standards of report governing the form and content of the auditor’s report and accordingly does not attempt to treat procedures or techniques. In order to have an affective audit report requires the truth of those assumptions.
- Limitation of the Study
It should be noted that despite that fact that investigation was on the audit report and its impact in public sector, sources of the research studies were on large (small limited liabilities companies. It is worthy to note that the information processed in view of the study were from secondary sources like professional journals, textbook, weekly and some daily news papers, etc. taking into consideration, another limitation was lack of sufficient time resulting from the short duration of each academic session of the shool, and as such, one could not really have enough time to travel extensively to gather enough reliable information that will aid one to write extensively as should have been necessary. The public servant and revealing of the secret degree is another embargo on some public servant who thought that such a degree prevent them from responding to certain areas of questions asked.
- Definition of Terms
- Audit: audit is a process whereby the account of a business entity is subjected to an examination that enable an auditor to form an opinion as to their accuracy, truth and Fairless.
- Auditing: auditing can be defined as an examination and inquiry into a statement of accounts the underlying records, document, assets and liabilities by an independence person with a view to express of an opinion as to compliance and correctness of the financial statement to relevant acts and regulation and communicate the opinion to interest users.
- Auditors opinion: auditor opinion can be said to an ascertain or conclusion on reached by the auditor on the general position and state of the financial statement he is reporting upon.
- Statutory Audit: statutory audit are audit carried out because they are required by law.
Statues that requires audit to be made are:
- The companies degree 1968
- H.C.N act of 1992 sector 18 (2) and (3)
- Internal Audit: internal audit are audit conducted by an employee of an organization into any area of its affairs.
- Internal Auditing: internal auditing is an audit carried on by independent personnel.
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