AUDITING AS AN INSTRUMENT FOR ENSURING ACCOUNTABILITY (A CASE STUDY OF POST PRIMARY SCHOOL MANAGEMENT BOARDIN ENUGU STATE)

1.1 BACKGROUND OF THE STUDY

In the origin auditing was not used to cross check accounts by the management or owners’ of the business. Auditing was introduced when the capital used for running the business was large and the fund was entrusted in the hands of few who are managing the business. Under this condition the need to have an auditor becomes apparent to the owners of the business. Auditing is one of the management instruments for efficiency and effectiveness, control and monitoring exercise towards accomplishing organizational goal. Auditing improves the information available for party’s interest in the activities of an organization usually by commenting on the quality of management report, thus enhancing their credibility. Theoretical rationalization for organization audit review focuses on two main themes. They are accountability and economic incentive. Accountability means that the recognition that responsibility or duty is owned by one party to one or more other parties and the idea that it should be possible to monitor the way, the responsibility has been discharged through the provision of some information, explanation report on its performance.

The question of how to increase efficiency and positive result in audit work in the public sector is a perennial problem in Nigeria, and one that is increasingly warring the generality of the people of this country.

        The response has been to upgrade the quality of audit staff and widening of the powers conferred on audit institutions in the public sector. The need for the training of audit staff in modern techniques of auditing which is more effective and result oriented rather than restricting them to the traditional methods of tick and turner which is inadequate and outdated.

        Public sector auditing is centred towards ensuring the proper and efficient use of public funds, development of sound financial management, the orderly executive administrative activities and the communication of information to the public through the publication of objectives reports since there are necessary for the stability and development of the nation, there is the need to map out the machineries and methods of carrying out a research these functions effectively as to achieve a desired result. In the past, the emphasis of an audit was on the traditional methods of auditing which has been mainly the compliance audit, seeing that all books and records comply with the laid down procedures and regulation. But now, there is the need for a shift of emphasis to modern concept of effectiveness and efficiency.  Based on these individual views of auditing and its functions, the researcher took a keen inherent to rest empirically auditing an aid to accountability with the Enugu State Post Primary School Management Board (PPSMB). The increasing incidence of fraud and misappropriation of public fund and property by the accounting officers and chief executives Posses a question as to whether auditing plays any role towards ensuring proper accountability in the state public service.  Auditing is meant to control, deter and find out any fraud or misappropriation of public fund or property by officers entrusted with such duties. It is because of this onerous task that the Enugu State audit department was established to appraise the work of those entrusted with the responsibility of accountability. Government undertakes various transactions through its representatives or agencies and as such, they are required by law to give account of their stewardship. To achieve these purpose, the constitution of the federal republic of Nigeria provides a law established audit departments both at the federal and state levels section 125(1) of the 1999 constitution provides that there shall be an auditor general for each state of the federation who shall be appointed in accordance with the provision of section 126 of this constitution. The sub-section (2) of this section provides that the public account of a state and all offices, ministries, parastatals and the courts of the state shall be audited by the auditor-general for the state concerned, and for that purpose the auditor-general or any person authorized by him in that behalf shall have access to all the books, record, returns and other documents relating to those accounts. The sub-section (3) of this constitution also states that nothing of sub-section (2) of the this constitution shall be constrained as authorizing the auditor-general to audit the accounts or appoint auditor for government statutory corporations, agencies, commission authorities, including all persons and bodies established by law but the auditors-general shall provides such bodies with

1. A list of auditors qualified to be appointed by them as external auditors, and from which the bodies shall appoint their external auditors and
2. A guideline on the level of lies to be paid to external auditors and
3. Commend on their annual account and auditor’s report thereon. The sub-section (4) of this section also states that the auditor-general for the state shall have power to conduct periodic checks of all government statutory corporations, agencies commission, authorities.

Inspite of all these provisions and safeguards, there is still existence of fraud and misappropriation of public funds and properties by those entrusted with their safeguards. In view of the foregoing, this study is aimed at appraising the functions of the Enugu state audit department, problems affecting its efficiencies performance and possible suggestion to enhance its effectiveness.

The researcher aims to examine the major cause of fraud or misappropriation of public funds in state public service and offer useful suggestions to arrest the ugly situation, this study will be of immense importance for it will appraise the performance of the Enugu State audit department and assess the extent it has been able to achieve its objectives.

The research will also offer useful suggestions on how best to achieve accountability in the state public service.

1.2 STATEMENT OF PROBLEM

 There has been an entry of poor accountability in the state public service, companies both public and private owned. This cause for proper and overall audit and effective working of the machineries established by government and companies to exercise control over funds. Auditing is believed by many to be a medium to ascertaining the true financial position of companies and government establishment.  Despite this important role of auditing, accountability in these sectors has not proved adequate and the researcher wants to find out if auditing is actually an aid to accountability.

1.3 OBJECTIVES OF THE STUDY

The fundamental objective of this investigation is to determine if actually auditing is an aid to accountability. Specific objectives include:

1. To examine if there is any significant relation between auditing  and accountability in (PPSMB)
2. To determine the extent of inadequate auditing leads to misappropriation, embezzlement and deflation.
3. To ascertain if auditing is a strong tool for accountability

1.4 RESEARCH QUESTIONS

The selected research questions that guide this study are:

1. Is there any significant relationship between auditing and accountability in (PPSMB)?
2. In what ways is inadequate auditing heads to misappropriation, embezzlement and deflation?
3. Is auditing a strong tool for accountability?

1.5 HYPOTHESES

 In order to arrive to a reasonable conclusion in the study of auditing as an aid to accountability, it is very eminent to formulate a set of testable hypothesis based on available data. To ensure true and fairness of this studying, the under mentioned hypothesis should be tested in the study.

Hypothesis 1

Ho:   There is no significant relationship between auditing and accountability in (PPSMB)

Hi:    There is significant relationship between auditing and accountability in (PPSMB)

Hypothesis 2

Ho:  Inadequate auditing does not lead to misappropriation, embezzlement and deflation

Hi:Inadequate auditing leads to misappropriation, embezzlement and deflation

1.6 SCOPE OF THE STUDY

The scope of the study centred on the usefulness of auditing in a public sector titled, “Auditing as an aid to accountability” with a particular reference to the Enugu State Post Primary School Management Board. It also covers the problem of internal audit department in the public services and solution to their problems.

1.7 SIGNIFICANCE OF STUDY

At the end of the research, the following achievements will be recorded and it is splited into two which is the practical and academic significance:

1.    The auditing will find work very eminent for it will explore deeply their areas of operation and the section of the constitution that empowered the operation of audit in the public service.
2.   It will also make them understand that adequate remuneration of their staff will reduce misappropriation and embezzlement in their establishment
3.    The management both in the private and in the public sector will also be taught the need to put the machinery in notion towards establishing adequate internal check which will certify the efficiency and effectiveness of their internal control.
4.   Although this work is referenced to the state board, the member of the board of directors and the shareholders will also find this work useful for it will make them understand the usefulness of carrying out a research concerning audit in their establishments.
5.    The students and would be researchers who would to research on a similar topic will also has provided some researchable question for them.  

1.8 OPERATIONAL DEFINITION OF TERMS  

It is very eminent to define some professional terms and language used in this work to make it easily understandable to interested readers of other disciplines.

1.    Public fund: This the government independent and accounting entity with a self-balancing set of accounts recording cash and or other resources together with all related liabilities, segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulation, restriction or limitation.
2.    Audit: AJEMBI O.A (1995) describe audit as an examination by an individual or a firm of a set of financial statement and to the underlying books and records which result, the auditing provides an opinion on the financial statement.
3.    Accountability: This simply defined as the process of keeping and documenting all the relevant data of an event
4.   Stewardship account: This is an account required of the stewards or agents to render to the person they are subject to the management of a firm render stewardship account to the members of the board, of director.
5.    Compliance audit: This is a kind of audit method carried to ensure that all books and records are in agreement with the laid down procedures and regulations.