ATTENTION:
BEFORE YOU READ THE ABSTRACT OR CHAPTER ONE OF THE PROJECT TOPIC
BELOW, PLEASE READ THE INFORMATION BELOW.THANK YOU!
INFORMATION:
YOU CAN GET THE COMPLETE PROJECT OF THE TOPIC BELOW. THE FULL
PROJECT COSTS N5,000 ONLY. THE FULL INFORMATION ON HOW TO PAY AND GET THE
COMPLETE PROJECT IS AT THE BOTTOM OF THIS PAGE. OR YOU CAN CALL: 08068231953,
08168759420
LOCAL
GOVERNMENT AUDIT AND ITS EFFECT ON COUNCIL’S ACCOUNT
2.1 Definition of Audit
Audit has
been defined in various ways but with little variations. According to Benin
(2001) in his dictionary of management, Vol. 2 defined audit as a critical
examination and analysis of an activity by an independent person performed to
check the efficiency of the activity and often to check security. This
definition is however narrow.The international encyclopedia of social sciences
defined auditing as concerned with the independent verification of the
statement of financial position and the results of operations of an entity.In
Penguin Dictionary of Commerce it was defined as “inspection of a set of books
and or accounts by a person other than the one who prepared them (with the
object of ascertaining whether or not the books are properly kept and or the
accounts shows a true and fair view of the state of affairs of the organization
at the data stated) followed by a report to the persons by whom the auditors
were appointed.” (Greener, 2000)However, the up to date definition being
accepted by many professional bodies is the one defined by the consultative
council of Accountancy bodies (CCAB).According to the definition, an audit is
the independent examination of and expression of opinion on the financial
statements, of an enterprise by an appointed auditor in pursuance of that
appointment and in compliance with any relevant statutory obligation. The statement
adds that the responsibility for the preparation of the financial statements
and the presentation of the information included there in rest with the
management of the enterprise. The Auditor’s responsibility is to report on the
financial statement as presented by management. Jim Ade notes that the main
purpose of an audit is to show whether financial statement reflect true view of
organization position.The preparation of the accounts of local government is a
very complex operation with differing orientations, legal systems and accounts
and control systems. The examination of such account by independent expert
trained in the assessment of financial information is of benefits to those who
control and operate such local government as well as to the nation.It is clear
in all the definitions state above that what is important in this case is the
independability, checking the verification and efficiency of the system,
ascertaining whether the proper books of accounts are maintained not so as to
show a true and fair view of the state of affair of the organization on which
the auditing is built.
Though there
is variation in language and choice of words used by the different authors, it
is crystal clear that they are all saying the same thing.
A Synopsis
of Local Government Audit
In a series
lecture by Jim Ade of the Esan West Local Government Council, he noted that the
study of local government audit is as important as auditing in every other
sector including the financial sector of the economy. This is because local
government being the closest government institution to the people at the
grassroots demand adequate financial resources, which of properly controlled
would benefit the rural communitiesJim reports that in local government, there
is a department referred to as finance and treasury department. This department
is charge with the responsibility of ensuring that local government or public
fund is well administered. This, it achieved by receiving fund, expending fund
and properly accounting for it.However, at a particular point in time an
independent person known as an internal auditor checks to ensure that these
functions (receiving funds, expending funds and accounting for them) are
adequately performed
Local
government audit therefore, is an examination of financial statement or records
of the local government in order to established if they show a true and fair
view.
Independence:
An auditor is expected to be an independent person to be able to function
effectively. Independence enables an auditors to have an independent or
unbiased opinion about the state of affair of local government
Technical
Competence: This is an ability to
express an opinion in a logical manner. He should be able to analyze any
financial situation. No matter how complex it is.
Computer
Literacy: An auditor is expected to be computer literate. He is expected to be
aware of all the going on in the computer technology environment.
Analytical
Knowledge: As an auditor, you, are expected to have a strong analytical skill.
This involved explaining and analyzing a situation in numerical terms. Source:
(Jim Ade, 2012: EWLG lecture).
The
Objective of Local Government Audit
The
objective of an audit is to detect irregularities or fraud. As stated by the
consultative council of accountancy bodies (CCAB) the responsibility for the
prevention and detection of irregularities and fraud rests with the management
who may obtain reasonable assurance that this responsibility will be discharge
by instituting an adequate system of internal control.The auditor’s duties do
not requires him specifically to search for fraud unless required statute or
the specific terms of the agreement. However, the auditor should recognized the
possibility of material irregularities or fraud which could unless adequately
disclose, distort the results or state of affairs shown by the financial
statement therefore the conducting of an audit is itself can often discourage
any attempt to institute, irregularities or fraud.Furthermore, the detecting of
fraud and errors and prevention of errors and fraud in the accounting system is
what is considered the secondary objective of an audit.The now almost notorious
expression of Lopas, L.J. in the case of Kingston Cotton Mill Company Limited
(1896) that the auditor “is a watch dog not a blood hound” is very obviousWhen
a statement of account is presented to government auditor, he will need to
scrutinize the underlying documents such as receipts, payment vouchers, various
ledgers, bank tellers, bank statements etc. He will also ask for explanation
and information from the officers of the organization whose accounts he is
auditing.Besides, the auditor will need to examine the physical assets and the
organization such as buildings, plants and machinery, motor vehicles, stores,
the auditor in trying to satisfy himself as to the correctness or otherwise of
the statement of the account he is examining.His final report will be based on
the opinion he has formed on this examinationViewing the radical changes in
Nigeria today where most Nigerians, including high placed government
functionaries and officials do not see any need for judicious spending of
public funds thus erroneously believing that they are gold mine from which to
help themselves, move emphasis is now been placed on the treatment of the
discovery of fraud as a primary objectives.Okolo (1997) had added more colour
to this fact by saying “it is my submission that the auditing which stipulates
that the discovery of errors and fraud is not a primary objective of an audit
is not applicable to the audit of public funds in Nigeria.However, it has to be
stated therefore that the auditor general (A.G) of the federation and the
directors of audit of the various states of the federation are not only
interested in the correctness of the financial statement, there are also very
much interested in the prudence with which public funds are managed hence is of
expenditure and sometimes queries as “unreasonable expenditure”.The financial
Memoranda has given credence to this by stating in chapter 40.2 that one of the
objectives of the external auditor is to assisting in protecting the assets and
interests of the local government by carrying out a continuous examination of
activities in order to detect fraud, misappropriation, irregular expenditure
and losses due waste, extravagance and maladministration.
Section 117
of the constitution of the federal republic of Nigeria provides the following
There shall
be a director of audit for each who shall be appointed in accordance with the
provision of sec. 118 of this constitution
The public
accounts of a state and all office courts and authorities of the state,
including persons and bodies established by law entrusted with the collection
and administration of public moneys and assets shall be audited and reported on
by the director of audit, and for that purpose, the director of audit or any
person authorized by him in that behalf shall have access to all books,
records, returns and other documents relating to these accounts.
The director
of audit shall submit his reports to the house of assembly of the state and the
house shall cause the reports to be considered by a committee of the house
responsible for public accounts.
in the
exercise of his functions under this constitution, the director of audit shall
not be subjected to the direction or control of any other authority or person.
(FRN, 1999).
Types of
Audit and its Application in Local Government
The range
and dept of audit work undertaken in any given situation will depend upon the
auditor’s owe assessment of the system which produces in the first place the
records which he is required to audit. Since both the complexity and
dependability of systems are almost infinitely variables, the length of time
taken to conduction audit and the number of level of audit personnel to require
to do so, are equally variable. It is possible to draw up the following broad
classification given by Howard (2001)
Complete or
final audit
Continuous
audit
Procedural
audit
Management
audit
Balance
sheet audit
The clans of
audit applicable to the local government accounts is a combination of final,
complete audit and continuous audit. The former applied at the close of the
financial year. Financial statements for that year one sent to Edo state
director of audit through the principal auditor of the various local government
areas. The relevant records such as the following will obtained from the
council.
Payment
vouches
Departmental
vote expenditure account (DVE)
Departmental
vote revenue account (DVRA)
Expenditure
abstract
Investment
abstract
Investment
ledger
Investment
ledger
Advances
ledger
Deposit
ledger
Bank
statement tellers and cheques stamps
Annual
financial statement
Contract
register
HOW
TO GET THE FULL PROJECT WORK
PLEASE,
print the following instructions and information if you will like to order/buy
our complete written material(s).
HOW
TO RECEIVE PROJECT MATERIAL(S)
After
paying the appropriate amount (#5,000) into our bank Account below, send the
following information to
08068231953
or 08168759420
(1)
Your project topics
(2)
Email Address
(3)
Payment Name
(4)
Teller Number
We
will send your material(s) after we receive bank alert
BANK
ACCOUNTS
Account
Name: AMUTAH DANIEL CHUKWUDI
Account
Number: 0046579864
Bank:
GTBank.
OR
Account
Name: AMUTAH DANIEL CHUKWUDI
Account
Number: 2023350498
Bank:
UBA.
FOR
MORE INFORMATION, CALL:
08068231953
or 08168759420
https://projectmaterialsng.blogspot.com.ng/
https://foreasyprojectmaterials.blogspot.com.ng/
https://mypostumes.blogspot.com.ng/
https://myeasymaterials.blogspot.com.ng/
https://eazyprojectsmaterial.blogspot.com.ng/
https://easzprojectmaterial.blogspot.com.ng/
Comments
Post a Comment