PROBLEMS AND PROSPECTS OF AUDITING IN GOVERNMENT ORGANIZATION (A CASE STUDY OF FEDERAL MORTGAGE BANK ENUGU STATE)

        CHAPTER ONE


                                        INTRODUCTION


        1.1 Background of the Study


         Government organization have played a greater part in


        the  economic  growth  of  any  economy,  especially  in  the


          Nigerian economy.  The contributions they have made so far


        cannot  be    overemphasized  because  their utmost  aims  of


          establishment is to provide  some vital or essential services


        to improve the social and economic well being of the people.


         These  government  organizations  are  mainly  being


        funded  either  by  the  federal  or  state  government  through


        their  budgetary  allocations  made  to  them  yearly  and  they


        can also obtain loans or overdraft from commercial bank as


        well  as  subvention  from  government.    These  funds  are


        expected  to  be  utilized  effectively  and  efficiently.    But  in


        most practices they are being misappropriated or embezzled


        by some government officials. 


         As  a  result  of  this  mis-appropriation  which  has


          characterized  most  of  the  government  organizations. 


        Honestly  and    prudently  managed.    The  audit  is  expect  to
        show whether proper principles of accounts and audit ethics


        have  been  adhered  to  and  that  financial  statements


          prepared give a true and fair view. 


        1.2 Statement of the Problem


        In  any  business  Organization  in  which  allocation  and


          application  of  funds  serves  as  a  backbone  for  financial


        activities to  be  carried  out  the  following  are  problems  in


        which are bund to be encountered. 


            1. Embezzlement of fund by some government Officials 


            2. Failure  to  exercise  due  professional  care  and  the


                    appropriate level of professional skepticism.


            3. Overreliance on inquiry as a form of audit evidence 


            4. Deficiency in confirming accounts receivable 


            5. Failure  to  recognize  related  party  transactions  and


                    assuming internal control exist when they may not.  


        These  and  other  factors  contribute  to  problems  of  auditing


        in government organization.


        1.3 Purpose of the Study
        The  purpose  of  studying  this  topic  is  to  examine  the


        importance,  problems  and  prospects  of  auditing  in


          government institution.


            § To  ascertain  the  problems  encountered  while  auditing


                in government establishment.


            § To  know  if  auditors  exhibit  enough  professional


                competence in conduct of their work.


            § To  know  how  effective  auditing  is  in  government


                establishment  


        1.4 Research Questions


        This  research  work  seeks  to  ask  the  following  questions


        among others, deduced from the purpose of the study.


            § Are  auditors  being  threatened  or  intimidated  during


                their audit work.


            § Are  auditors  being  faced  with  some  problems  during


                their audit work.


            § Are  vital  documents  needed  for  the  audit  of  the


                organization being held from the auditors


 


 
        1.5 Research Hypothesis 


        Based on the purpose, and research questions the following


          hypothesis are put forward. 


        Ho Financial reports submitted are not in consonance with


                the  transactions  carried  out  by  the  government


                establishment 


        HI Financial report submitted are in consonance with the


                transactions  carried  out  by  the  government


                establishment.


        Ho Treats  and  intimidation  do  not positively affect  the


                quality of auditors work in government establishment.


        HI Treat  and  intimidation positively affect  the  quality  of


                auditors work in government establishment.


        Ho Poor  professional  conducts  by  auditors  do not  affect


                the  quality  of  work done  by  auditor  in  government


                establishment.


        HI Poor  Professional  conduct  by  auditors  affects  the


                quality of work  done  by  auditors  in  government


                  establishments.


 
        1.6 Significance of the study


        Where audit  principles  and  procedures  are  carried  out  in


                government  organizations  the  following  benefits  are


                derived  of  which  these  work  will  be  beneficial  to  the


                following people and establishments:


            § Government  good  audit  work  will  prevent,  expose


                fraud,  errors  and  irregularities in  government


                establishment. 


            § Auditors: will benefit by knowing the challenges facing


                them in their audit work and thereafter the prospects. 


            § Banks; will  also  benefit  because  it  will  give them


                insight on how to handle audit work successfully. 


            § Students and researchers  will  benefit  by  gaining


                knowledge  on  the  audit  challenges  to  banks  and  the


                prospects. 


        1.7 Scope and limitation of the study


                This  project  would  cover  arrears  such  as  audit


        principle(s)  and  procedures  giving  as  in  depth  analysis  on


        how audit work is carried out in government organizations.