CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
As government has grown in scope size and complexity so too the need for internal auditing accounting for and controlling government receipts and expenditure has resulted in the need for a staggering number of government clerks, accountants and auditors. The need for control over government revenue appropriation and expenditure should not be surprising federal, state and local government is actually the largest industry in the country. However the need for efficient and effective internal auditing system in government ministries and extra- ministerial department can not be over emphasized as the complexity of government activities is obvious . the annual budgets by federal state and local government are generally incorporated into governmental accounting system and financial reports, this is not the case in private sector business organization. Thus the annual budgets in conjunction with government financial reports are the primary focus of public sector audits. Internal auditing is an independent appraisal function established within an organization to examine and organization Taylor and Glezen (1979) it is mainly concerned with appraised of government activities for the review of accounting financial and operations as a service to the management.
INTERNAL EXTERNAL AUDITOR
A person who undertakes audit function is called an auditor. Internal audit has been described as an independent review of operation and records. Sometime continuous undertake within an organization by especially assigned staff of the organization as basis for long protection and constructive services to management Ubesis (1997). External auditor is an independent examination of financial statement of an organization an auditor. Other than an employee of an organization but by appointment by the share holders, like external audit, internal auditing had its role in accent time infect internal and external audit had essentially the same beginning there was no distinction between them prior to the nineteenth century “Ricchute (1975). Both group of auditor rely on the same data base. Also the internal user rely on both internal and external auditors and external user rely on external auditors. Importantly, external auditors can sometime rely upon an internal auditors work when the internal audit function is strong.
As a result an organization internal audit function can have some effect on the scope of independence external auditors extermination. As an independent contractor, the external auditing firm reserves the right to direct and control its own employees, the external auditor is free to use some methods and to expand or duce the kind of works they do. An internal auditor must be independence of both personnel and operational activities of the organization. Independence is essential to the effectiveness of internal auditing. The independence is obtained primarily through the organization independence is essential to the effectiveness of internal auditing.
The organizational status and objectively. Inadequate independence makes internal auditors conclusion and recommendation to be biased. Although internal and external auditing use the same audit methodology they have different objective when conducting and it activities. The objective of internal auditor is to assist management concerning activities reviewed in the organization while the external auditors objective is the to express an opinion in the finical statement. Also external auditing is a societal control which gives external financial information it user internal control serves the organization i.e an organization control which measure and evacuate the effectiveness of the other organization control however, this project in very much interest in the internal audit function the government miniseries. It is mainly con cerned with the appraisal of government activities for the review of accounting financial and operations as a service to the management internal auditing is more or less a management internal auditing is more or less a managerial control which function by measuring and evaluating the effectiveness of other activities that is normally done by an employee. The internal audit assures existence of effective internal control in the policies established by the government
FUNCTIONS OF INTERNAL AUDITOR
1. Internal auditor monitors the economical and efficiency in the use of resource. It appraises the economy.
2. Safeguarding of assets; it should review the means of safeguarding assets also very the existence of such assets.
3. Internal auditor ensures reliability and integrity of information. They review the reliability and integrity of financial information and the means used to identify measure, classify and report such information.
4. Compliance with policies plans procedures laws and regulation the internal audit review the system to ensure compliance with the policies plan, procedures, laws and regulation which could have a significant impact on operation and reports. They determine whether the organization is in compliance
5. It review where necessary make recommendation for the improvement of system control and producers to ensure that they are both efficient and effective in the light of changing circumstances and practices.