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AN EVALUATION OF THE ROLE OF INTERNAL AUDITORS IN AN ORGANIZATION [A CASE STUDY OF COCA-COLA, IBADAN]
CHAPTER ONE
1.1 INTRODUCTION
Internal Audit Units are established in organizations in order to assist members of the Organization in the effective discharge of their responsibilities, monitor the use of resources and make recommendations for the improvement of the organizational operations.
The day-to-day operation of an organization is delegated to the management by the Board of Directors. The head of the management often referred to as the Managing Director and Chief Executive Officer serve as a link between the Board of Directors and the management.
An internal auditor is employed as an agent of the management for ensuring effective working of Internal Control System. Independence of auditor is a cornerstone for the quality of his performance.
However, it is practically difficult for an internal auditor to possess any reasonable degree of independence in mind and attitude because of the management influence and scope of the work. It needs to be emphasized that internal audit function as an integral part of the internal control system is concomitant to good corporate governance.
The purpose of internal audit in big companies is to ensure that the account on which the auditor is reporting disclose a true and fair view of the transaction summarized within the period under examination. To ensure completeness and effectiveness in big companies, auditing is very important, the major work covered in the exercising of auditing include examination of internal control, the system of bookkeeping and account, to ensure whether they are appropriate for the nature of the business or activities being carried out by the client and whether all the transactions have been properly recorded under the system. The existence of any internal audit units in big companies is a sign of good control system. If properly conducted, internal audit units can have a great impact on the effectiveness and efficiency of big companies.
Adeniji (2004) suggest that internal audit as an independent appraisal activity established within an organization as a service to it. It is a control, which functions by examining and evaluating the adequacy and effectiveness of other controls.
Adams (2002), opined that internal auditing is an independent appraisal actively for the review of operations as a service to the management. Internal auditor here is one who is employed by the management of an enterprise who may or may not attain minimum academic or professional qualification, that is he may not be a member of any recognized body e.g. ICAN, ANAN.
It is in the view of the above that this study would be conducted to find out the role played by an internal auditor in big companies through proper installation of effective Internal Control System in big companies. Internal control system is examined by internal auditor in order for him to know if the control system is effective. He does this by carrying out compliance test. Internal check is done in order to prevent and detect errors and fraud. It involves the arrangement of bookkeeping and other clerical duties.
Internal Audit is a review of the operations, procedures and records of the business. Internal Auditing is itself an Internal Control which operates by appraising and reporting on the effectiveness of the other controls. Thus, its main objective is to assist management in discharging its responsibilities and to evaluate compliance with corporate procedures. It is often assigned for reviewing the accounting system and related Internal Controls, monitoring their operation and recommending improvement thereto, and also the examination of financial and operating information.
Aquaisua (2004) opines internal audit as the process of continuous review of financial transactions in order to ensure that they are working as the management intends. All the regulations, instructions, accounting system or procedures and rules set should be controlled to ensure that they are working as prescribed. It assures management of the adequacy and appropriateness of the system of internal controls by testing their operations. Usually, Government, financial instructions provide that the Accounting Officers of Ministries or Departments or (non-ministerial) departments will ensure that, subject to the availability of staff, an internal audit unit be established to provide a complete and continuous audit of accounts of revenue, expenditure, plant, allocated stores and un-allocated stores where applicable.
Omoya (1984) suggests that the duty of the internal auditor, who should be responsible to accounting officer will be to audit account and records and for the examination of the systems and procedures in force. His report should be submitted to the Accounting officer copying the Auditor-general of his state. He should have an audit programme which should be submitted to the Accounting Officer and for the acceptance of the Accountant General and Auditor General. Such programmes should ensure that the programme of audit will extend to cover all the records of the ministry, department or unit, in order to satisfy himself that:
i) The safeguards introduced for the prevention of the prompt detection of fraud and loss of cash or stores or plants are adequate. Normal safeguards include the observance of government and departmental regulators and instructors and for existence of internal checks.
ii) The system for the control of the collection of revenue is adequate and that all monies received have been promptly brought to account to the correct head and sub-head.
iii) The system for the control of expenditure is adequate and that all payments made are properly authorized and correct, that they are paid to the right person, for whom they were authorized.
iv) The system for the control of the issue and consumption of stores is adequate, that issues are made to the right person and are used for the purpose for which they are authorized.
v) There are adequate means for which the verification is done by him, of all cash, stores and plant held.
Bigg and Davies (1994) postulates, Internal Auditing is an independent objective assurance and consulting actively designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk Management Control are governance processes. Independence is established by the organizational and reporting structure.
Objectivity is achieved by an appropriate mind-set, the internal audit activity evaluates risk exposures relating to the organization’s governance, operations and information system in related to:
i) Effectiveness and efficiency of operations
ii) Reliability and integrity of financial and operational information
iii) Safeguarding of assets
iv) Compliance with laws, regulations and contracts
Based on the result of the risk assessment, the internal auditors evaluate the adequacy and effectiveness of how risks are identified and managed in the above areas. They also asses other aspects such as ethics and values within the organization, performance management, communication of risk and control information within the organization in order to facilitate or good governance process
The internal auditors are expected to provide recommendations for improvement in those areas where opportunities or deficiencies are identified, while management is responsible for internal controls, the internal audit actively provides assurance to management and the audit committee that internal controls are effective and working as intended.
1.2 BACKGROUND OF INTERNAL AUDITING
The proliferation of large, dispersed, complex corporation starting early in twentieth century, spurred the accelerated development of the internal audit function. The Institute of Internal Auditors (IIA) was founded in 1941, largely in response to this development and modern internal auditing owes much of its early expansion of the scope of internal audit activities and the professionalization of the practice of internal auditing.
The development of professional under pinning for the profession however did not come all at once. It was not until 1947 that the Institute of Internal Auditor issued its first statement of responsibilities.
The code of ethics was issued in 1968 and standard in 1979. The first Certified Internal Auditor (CIA) exams were written in 1974, indicating that, there was that time deemed to be a recognized body of knowledge available for internal audit professionals. The potential value of the internal audit function came later to the public sector motivation. The United States Congress first recognized the potential contribution of internal audit in 1950, in requiring by statute that each executives agency include internal audit in the agency’s of internal control.
In 1973, the Treasury Board made it mandatory for all departments and agencies to internal audits performed on their systems of financial administration. Direction 9.1 of the policy started, departments hall have financial audit performed, which include:
Reviewing and appraising the effectiveness and efficiency of department system of financial administration including the safeguarding of assets. Ascertaining the extent of compliance of department systems and procedures with financial policies, regulations and other instruction of parliament, treasury board and the department of agency.
The internal audit policy component of review policy made no substantive changes to the scope of internal audit, but bolstered the professional under pinning of the practice by integrating treasury board and Institute of Internal Auditors Standards and ethics provision. Also in this policy, frequency requirements were dropped and the concept of risk based audit planning was introduced.
1.2.1 STATEMEMT OF THE PROBLEM
Internal audit provide advantages to the management, it is a tool of ensuring effective implementation of Internal Control System and infact, and it allows such internal control system to be reviewed where necessary. With internal audit, management policies are seen to be complied with and adequate information is made available for the management for decision making.
This research focuses on the weaknesses of internal audit units in an organization, that make it impossible for an internal auditor to carryout its duty at a specific time.
Problem of Appointment: The appointment of internal auditors has been encouraged by some officials who would want to manipulate financial control system so as to promote their fraudulent tendencies.
Problem of Qualification: Since the law does not stipulate a minimum qualification required of an internal auditor, it is not impossible to find out that some internal auditors do not possess the needed qualifications required.
Also to ascertain the level of independence of our auditors and if indeed they have been able to use their professional skills to check and correct the mis-happening in the organization.
Finally, which is the main focus of the research work, the role and evaluation of internal audit in an organization, to check how internal auditors are being frustrated by the chief executives, which makes it difficult to disclose information.
1.3 OBJECTIVES OF THE STUDY
The objectives of this study:
1. To examine the role the internal audit play in an organization
2. To identify problems hindering effective operations of internal audit in Coca-Cola company
3. To examine the preventive measures to applied by internal auditor in coca-cola company
4. To offer recommendations based on the findings of the study.
1.4 RESEARCH QUESTIONS
This research work proposed to assess the role of internal audit in big companies and to ensure adherence and effectiveness of audit work in big companies. The study would see to provide answers to the following research questions:
i) How does internal audit enhance the effectiveness and efficiency of operations of coca-cola company?
ii) What are the problems that are likely to be encountered by the internal audit in carrying out its duties?
iii) How independent is internal audit in coca-cola company?
iv) What are the problems militating the effective operations of internal audit in coca-cola company?
1.5 SIGNIFICANCE OF THE STUDY
The main significant of this research is that it would enlighten the management on the importance of both internal auditing and internal control. Also people who are not in the system such as those in the academic cycle will have a picture of what internal audit and the role played in coca-cola company and organization.
The management benefits from this work by knowing the actual picture of their Internal Control so as to know whether or not it is reliable. Also, government is not left behind in that when completed the research would undoubtedly identify to the government areas where attention would be greatly placed in order to sanitize the system for better revenue generation.
External auditors also benefits from this research work, this is because internal auditor can assist external auditor in familiarizing himself with the accounting system, and act as a liaison between the external auditor and other members of the client staff.
This study would serve as a reference material to students and researchers who would want to conduct further researches/studies on internal auditors in big companies.
1.6 SCOPE OF THE STUDY
The scope of this research is limited to the area of an evaluation of the role of internal auditors in an organization a case study of coca-cola company, Ibadan, Lagos state Branch. The company is used as the case study. The research tends to highlight the ways in which internal audit is carried out in organization and how the internal audits in itself is. The scope of this research will also focus its attention to the status of the internal auditor, his responsibilities, independence practice as well as the problems encountered in the course of carrying its duties and the possible solutions to the problems. It is hoped that the information gathered will greatly reflect the generality of organization.
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Tags: AN EVALUATION OF THE ROLE OF INTERNAL AUDITORS IN AN ORGANIZATION [A CASE STUDY OF COCA-COLA, IBADAN]
ATTENTION:
BEFORE YOU READ THE 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 N5000 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
EFFECT OF TAX INCENTIVES AND CONCESSION ON GROWTH AND DEVELOPMENT OF SMEs IN NIGERIA CASE STUDY OF (SME TAXPAYERS IN IKEJA LAGOS STATE, IBADAN)
CHAPTER ONE
INTRODUCTION
1.1. BACKGROUND TO THE STUDY
Small businesses are seen as one key source of economic growth. For this reason,myriadeconomicpolicieshavebeendevotedtopromotetheeconomic activity within small businesses (Buss 2001).
Small and medium enterprises (SMEs) form the core of majority of the world’s economies. A study carried out by the Federal Office of Statistics shows that in Nigeria, small and medium enterprises make up 97% of the economy (Ariyo, 2005). Although smaller in size, they are the most important enterprises in the economy due to the fact that when all the individual effects are aggregated, they surpass that of the larger companies. The social and economic advantages of small and medium enterprises cannot be overstated.
This SMEs are seen as a source of employment, competition, economic dynamism, and innovation which stimulate the entrepreneurial spirit and the diffusion of skills. Because they enjoy a wider geographical presence than big companies, SMEs also contribute to better income distribution. Over the years, small and medium enterprises have been an avenue for job creation and the empowerment of Nigeria’s citizens providing about 50% of all jobs in Nigeria and also for local capital formation. Being highly innovative, they lead to the utilization of our natural resources which in turn translates to increasing the country’s wealth through higher productivity. Small and medium scale enterprises have undoubtedly improved the standard of living of so many people especially those in the rural areas.
The mode by which SME development and economic growth can be effectively, efficiently, stimulated and developed is very demanding. As a result of this, the government charges less tax and gives tax holidays in order to encourage investments and economic activities of these small scale entrepreneur in those areas which help to improve production capabilities, activate economic growth as well as the allocation of resources in a socially desirable manner.
To the small scale enterprises, the general feature of agood tax system (tax base rate) is more important than the tax incentives in many developing countries. The tax laws are not clearly written and may be subject to frequent review which makes long-term planning difficult for businesses and add to the perceived risks of undertaking major capital intensive projects.
Taxation is a process or means through which communities or groups are made to contribute a part of their income for the sole purpose of societal administration while tax, is a compulsory levy levied on the people at a given place for the sole purpose of government revenue for government expenditure.
Tax incentive itself, is the use of government spending and tax policies to influence the level of national income. This measure encourages the springing up and gradual growth of new enterprises by the reduction of profit tax, which in turn encourages production, influences the production level and curbs unemployment. So, the government should provide such tax incentives in order to boost development which will bring about an increase in employment opportunities and also cause an improvement in the economy, tax incentives according to Kuewumi (1996) encompass all the measures adopted by government to motive tax payers to respond favorably to their tax obligations. It includes adjustments to tax policy aimed at lessening the effects of taxation on an industry, a group of persons or the provision of certain services. Such measures may subsume the adoption of benign low tax rate; the effective dissemination of fiscal information by tax authority; or the non-imposition of tax at all.
Amadiegwu (2008:74), a tax expert wrote that the objective of tax incentive is that by borrowing rather than taxing, the government has a better chance of expanding investment spending which is essential in enlarging production possibilities and attaining a sustainable improvement in the standard of living of the people.
Dotun and Sanni (2009:265), in their “Nigerian companies’ taxation” stated that these incentives can be targeted on the low income earners, local and developing industries, farmers, which will increase their savings and is necessary for higher investment. Tax incentives create employment opportunities for the people, helps to fight economic depression and inflation thereby increasing the equitable distribution of income and wealth.
1.2. STATEMENT OF PROBLEM
The mortality rate of these small scale enterprises is very high. According to the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) Nigeria, 80% of SMES die before their 5th anniversary. Among the factors responsible for these untimely close-ups are tax related issues, ranging from multiple taxations to enormous tax burdens etc.
In developing countries like Nigeria, there is an urgent need to provide the required enabling environment for the development of SMEs, so that they could adequately play the role expected of them in economic transformation. Such role includes mobilization of domestic savings for investment, appreciable contribution to gross domestic product, increased harnessing of local raw materials, employment generation, and significant contribution of poverty reduction efforts through sustainable livelihoods and enhancement in personnel income, technological development and export diversification (Smatrakalev, 2006), however this is not the case because taxes which are levied for regulating the investment behavior of the households are suffocating the entrepreneur growth and development, and this also serves as a major constraint to the development of the SMEs they are out to cater for.
Various people believes that a tax incentive encourages economic growth and industrial development of SMEs while another believes that it reduces revenue accruable to the government, As a result of this, it does not stimulate the economy. The poverty alleviation programme aimed at reducing the rate of poverty among the masses, was introduced. This programme covered the provision of jobs for able and unemployed youths, provision of loans for small and medium scale enterprises at a minimum lending rate, yet there is no gainsaying that this measures and policies taken so far, yield positive development to the economy.
Finally, most tax experts, consultants, Individuals and economic analysts ignored or criticized the incentive for the following reasons:
1. That the impacts of the tax incentives are not effective in the economy.
2. That the exemption privilege not granted to all SMES places some enterprises at a competitive advantage over others.
3. That the incentive granted are not adequate for the developmental and industrial growth of SMEs.
4. Most entrepreneurs, firms and industries lack the awareness of the incentive.
1.3. OBJECTIVES OF THE STUDY
Tax incentive scheme is an economic policy which exists among many other competing alternatives. The scheme may be an inducement towards rightful investment, securing proposal on private investors lay behind, it then follows that if the scheme is a pale shadow for pilling stock of profitable that the benefits expected from these incentives should be able to justify the cost.
In the light of the above, the study shall seeks to examine the extent to which tax incentives affects the growth and development of small scale entrepreneurs.
Other specific objective includes:
Establish the relationship between tax policy and the growth of SMEs in Nigeria
Assess the various incentives available to small scale entrepreneur.
To examine the relationship between tax incentives and SMEs survival
Ascertain how tax incentives stimulate individuals to establish new enterprises which will boost industrial development and economic growth
Determine how tax incentives affect productivity level and growth of new small scale enterprises.
Assess the economic implication of granting tax incentives to SMEs.
1.5 SIGNIFICANCE OF THE STUDY
Tax incentive is a strong fiscal measure or policy which can stimulate investment and savings leading to capital information. This capital acquisition can be used productively in economic and industrial development of companies and individual can use them effectively. In deciding if these incentives can stimulate the companies and individuals to invest in the economy. One basic fact is this whether the company individual concern decided to go into business because of tax incentives offered.
This study will contribute immensely to existing literature on benefits of tax incentives to small scale enterprises, and as a result of the creation of more SMES and with the expansion of the existing ones, the standard of living of the populace will be positively affected.
It will also broaden the knowledge of small taxpayers on various types of tax incentives available to them, and how the various tax incentive scheme leading to economic diversification result in increasing urban and rural development.
The study is also important as it will help ascertain if fiscal authority is keeping track on tax mobilization with GDP growth and to identify those taxes which are income elastic or otherwise in order to raise overall tax revenue.
Finally this study will be of great significance to government, tax officials, tax authority, small scale entrepreneur, investors, corporate organizations, schools and students who are regular taxpayers, it will serve as a reference point for student who would like to make future research or contribute to the existing literature.
1.6. SCOPE OF THE STUDY
The research study will be limited to the use of questionnaires and oral interviews when appropriate and to a review of related literature (review of relevant books and journals) that could provide an insight into the effect of tax incentives on industrial growth and development of SMEs.
Case studies will be restricted to seventy (70) small business owners who are taxpayers in Ikeja Metropolis, Lagos State.
The State is situated in southwestern region, and it is selected for this research study because it is part of the major industrial areas in the country.
1.7. LIMITATION OF THE STUDY
The constraints of this study may be attributed to:
1. Inherent limitations of the analytical method of gathering information such as the un-cooperative attitude of the respondents.
2. Irrelevant or unreliable information obtained from oral interviews. This is based on the degree of the respondent’s truthfulness in answering the question’s raised during oral interviews. Some of the respondents thought that the research work is meant to expose their enterprise and thus, were not ready to give relevant information.
3. The writer was also faced with time constraint which involved appropriating her time between writing the project work and performing her academic function as well as meeting her social needs.
4. Also encountered was the problem of getting an exact from the school authorities for the purpose of the research work.
1.8. DEFINITION OF TERMS
INCENTIVE:An incentive is a form of tax relief, inform of a reduction in or an exemption from the tax which someone, a firm, or an industry would normally be liable.
TAX INCENTIVES-These are reliefs granted to tax payers or industries in form of an off-set from the total profit before tax liability is determined. In case of industries and firms, tax incentives are given inform of tax holidays which is established by the legislative authorities on such payment of taxes.
INVESTMENT ALLOWANCE- Investment allowance is given as a tax incentive to a certain category of companies for incurring some qualifying capital expenditure on plant and equipment used for the business at the rate of 10% on cost.
RURAL INVESTMENT ALLOWANCE- This is granted to all capital expenditures incurred by companies established in rural areas in respect of providing a lacking infrastructural facility.
TAX HOLIDAYS: this is a temporary exemption of a new firms or investment from certain specified taxes, typically corporate income tax.
CAPITAL ALLOWANCE- This is granted by the act on a qualifying capital expenditure incurred wholly, exclusively, for the purpose of trade or business.
TAX: is a compulsory levy payable by individual economic units or corporate bodies to government without any direct quid pro quo from the government.
8. SMALL SCALE BUSINESS: It is defined as any business undertaken, owned, managed and controlled by not more than two entrepreneurs, has no more than twenty employees, has no definite organizational structure (i.e all employees report to the owners) and has relatively small shares of its market.
BUSINESS GROWTH: this refers to the increase in the size, value and financial performance of a firm or company.
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 (#5000) 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) immediately 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.
HOW TO IDENTIFY SCAM/FRAUD
As a result of fraud in Nigeria, people don’t believe there are good online businesses in Nigeria.
But on this site, we have provided “table of content and chapter one” of all our project topics and materials in order to convince you that we have the complete materials.
Secondly, we have provided our Bank Account on this site. Our Bank Account contains all information about the owner of this website. For your own security, all payment should be made in the bank.
No Fraudulent company uses Bank Account as a means of payment, because Bank Account contains the overall information of the owner
CAUTION/WARNING
Please, DO NOT COPY any of our materials on this website WORD-TO-WORD. These materials are to assist, direct you during your project. Study the materials carefully and use the information in them to develop your own new copy. Copying these materials word-to-word is CHEATING/ ILLEGAL because it affects Educational standard, and we will not be held responsible for it. If you must copy word-to-word please do not order/buy.
That you ordered this material shows you have agreed not to copy word-to-word.
FOR MORE INFORMATION, CALL:
08068231953 or 08168759420
AFFILIATE LINKS:
myeasyproject.com.ng
easyprojectmaterials.com
easyprojectmaterials.net.ng
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Tags: EFFECT OF TAX INCENTIVES AND CONCESSION ON GROWTH AND DEVELOPMENT OF SMEs IN NIGERIA CASE STUDY OF (SME TAXPAYERS IN IKEJA LAGOS STATE, IBADAN]
CHAPTER ONE
INTRODUCTION
1.1. BACKGROUND TO THE STUDY
Small businesses are seen as one key source of economic growth. For this reason,myriad economic policies have been devoted to promote the economic activity within small businesses (Buss 2001).
Small and medium enterprises (SMEs) form the core of majority of the world’s economies. A study carried out by the Federal Office of Statistics shows that in Nigeria, small and medium enterprises make up 97% of the economy (Ariyo, 2005). Although smaller in size, they are the most important enterprises in the economy due to the fact that when all the individual effects are aggregated, they surpass that of the larger companies. The social and economic advantages of small and medium enterprises cannot be overstated.
This SMEs are seen as a source of employment, competition, economic dynamism, and innovation which stimulate the entrepreneurial spirit and the diffusion of skills. Because they enjoy a wider geographical presence than big companies, SMEs also contribute to better income distribution. Over the years, small and medium enterprises have been an avenue for job creation and the empowerment of Nigeria’s citizens providing about 50% of all jobs in Nigeria and also for local capital formation. Being highly innovative, they lead to the utilization of our natural resources which in turn translates to increasing the country’s wealth through higher productivity. Small and medium scale enterprises have undoubtedly improved the standard of living of so many people especially those in the rural areas.
The mode by which SME development and economic growth can be effectively, efficiently, stimulated and developed is very demanding. As a result of this, the government charges less tax and gives tax holidays in order to encourage investments and economic activities of these small scale entrepreneur in those areas which help to improve production capabilities, activate economic growth as well as the allocation of resources in a socially desirable manner.
To the small scale enterprises, the general feature of agood tax system (tax base rate) is more important than the tax incentives in many developing countries. The tax laws are not clearly written and may be subject to frequent review which makes long-term planning difficult for businesses and add to the perceived risks of undertaking major capital intensive projects.
Taxation is a process or means through which communities or groups are made to contribute a part of their income for the sole purpose of societal administration while tax, is a compulsory levy levied on the people at a given place for the sole purpose of government revenue for government expenditure.
Tax incentive itself, is the use of government spending and tax policies to influence the level of national income. This measure encourages the springing up and gradual growth of new enterprises by the reduction of profit tax, which in turn encourages production, influences the production level and curbs unemployment. So, the government should provide such tax incentives in order to boost development which will bring about an increase in employment opportunities and also cause an improvement in the economy, tax incentives according to Kuewumi (1996) encompass all the measures adopted by government to motive tax payers to respond favorably to their tax obligations. It includes adjustments to tax policy aimed at lessening the effects of taxation on an industry, a group of persons or the provision of certain services. Such measures may subsume the adoption of benign low tax rate; the effective dissemination of fiscal information by tax authority; or the non-imposition of tax at all.
Amadiegwu (2008:74), a tax expert wrote that the objective of tax incentive is that by borrowing rather than taxing, the government has a better chance of expanding investment spending which is essential in enlarging production possibilities and attaining a sustainable improvement in the standard of living of the people.
Dotun and Sanni (2009:265), in their “Nigerian companies’ taxation” stated that these incentives can be targeted on the low income earners, local and developing industries, farmers, which will increase their savings and is necessary for higher investment. Tax incentives create employment opportunities for the people, helps to fight economic depression and inflation thereby increasing the equitable distribution of income and wealth.
1.2. STATEMENT OF PROBLEM
The mortality rate of these small scale enterprises is very high. According to the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) Nigeria, 80% of SMES die before their 5th anniversary. Among the factors responsible for these untimely close-ups are tax related issues, ranging from multiple taxations to enormous tax burdens etc.
In developing countries like Nigeria, there is an urgent need to provide the required enabling environment for the development of SMEs, so that they could adequately play the role expected of them in economic transformation. Such role includes mobilization of domestic savings for investment, appreciable contribution to gross domestic product, increased harnessing of local raw materials, employment generation, and significant contribution of poverty reduction efforts through sustainable livelihoods and enhancement in personnel income, technological development and export diversification (Smatrakalev, 2006), however this is not the case because taxes which are levied for regulating the investment behavior of the households are suffocating the entrepreneur growth and development, and this also serves as a major constraint to the development of the SMEs they are out to cater for.
Various people believes that a tax incentive encourages economic growth and industrial development of SMEs while another believes that it reduces revenue accruable to the government, As a result of this, it does not stimulate the economy. The poverty alleviation programme aimed at reducing the rate of poverty among the masses, was introduced. This programme covered the provision of jobs for able and unemployed youths, provision of loans for small and medium scale enterprises at a minimum lending rate, yet there is no gainsaying that this measures and policies taken so far, yield positive development to the economy.
Finally, most tax experts, consultants, Individuals and economic analysts ignored or criticized the incentive for the following reasons:
1. That the impacts of the tax incentives are not effective in the economy.
2. That the exemption privilege not granted to all SMES places some enterprises at a competitive advantage over others.
3. That the incentive granted are not adequate for the developmental and industrial growth of SMEs.
4. Most entrepreneurs, firms and industries lack the awareness of the incentive.
1.3. OBJECTIVES OF THE STUDY
Tax incentive scheme is an economic policy which exists among many other competing alternatives. The scheme may be an inducement towards rightful investment, securing proposal on private investors lay behind, it then follows that if the scheme is a pale shadow for pilling stock of profitable that the benefits expected from these incentives should be able to justify the cost.
In the light of the above, the study shall seeks to examine the extent to which tax incentives affects the growth and development of small scale entrepreneurs.
Other specific objective includes:
- Establish the relationship between tax policy and the growth of SMEs in Nigeria
- Assess the various incentives available to small scale entrepreneur.
- To examine the relationship between tax incentives and SMEs survival
- Ascertain how tax incentives stimulate individuals to establish new enterprises which will boost industrial development and economic growth
- Determine how tax incentives affect productivity level and growth of new small scale enterprises.
- Assess the economic implication of granting tax incentives to SMEs.
1.5 SIGNIFICANCE OF THE STUDY
Tax incentive is a strong fiscal measure or policy which can stimulate investment and savings leading to capital information. This capital acquisition can be used productively in economic and industrial development of companies and individual can use them effectively. In deciding if these incentives can stimulate the companies and individuals to invest in the economy. One basic fact is this whether the company individual concern decided to go into business because of tax incentives offered.
This study will contribute immensely to existing literature on benefits of tax incentives to small scale enterprises, and as a result of the creation of more SMES and with the expansion of the existing ones, the standard of living of the populace will be positively affected.
It will also broaden the knowledge of small taxpayers on various types of tax incentives available to them, and how the various tax incentive scheme leading to economic diversification result in increasing urban and rural development.
The study is also important as it will help ascertain if fiscal authority is keeping track on tax mobilization with GDP growth and to identify those taxes which are income elastic or otherwise in order to raise overall tax revenue.
Finally this study will be of great significance to government, tax officials, tax authority, small scale entrepreneur, investors, corporate organizations, schools and students who are regular taxpayers, it will serve as a reference point for student who would like to make future research or contribute to the existing literature.
1.6. SCOPE OF THE STUDY
The research study will be limited to the use of questionnaires and oral interviews when appropriate and to a review of related literature (review of relevant books and journals) that could provide an insight into the effect of tax incentives on industrial growth and development of SMEs.
Case studies will be restricted to seventy (70) small business owners who are taxpayers in Ikeja Metropolis, Lagos State.
The State is situated in southwestern region, and it is selected for this research study because it is part of the major industrial areas in the country.
1.7. LIMITATION OF THE STUDY
The constraints of this study may be attributed to:
1. Inherent limitations of the analytical method of gathering information such as the un-cooperative attitude of the respondents.
2. Irrelevant or unreliable information obtained from oral interviews. This is based on the degree of the respondent’s truthfulness in answering the question’s raised during oral interviews. Some of the respondents thought that the research work is meant to expose their enterprise and thus, were not ready to give relevant information.
3. The writer was also faced with time constraint which involved appropriating her time between writing the project work and performing her academic function as well as meeting her social needs.
4. Also encountered was the problem of getting an exact from the school authorities for the purpose of the research work.
1.8. DEFINITION OF TERMS
- INCENTIVE:An incentive is a form of tax relief, inform of a reduction in or an exemption from the tax which someone, a firm, or an industry would normally be liable.
- TAX INCENTIVES-These are reliefs granted to tax payers or industries in form of an off-set from the total profit before tax liability is determined. In case of industries and firms, tax incentives are given inform of tax holidays which is established by the legislative authorities on such payment of taxes.
- INVESTMENT ALLOWANCE– Investment allowance is given as a tax incentive to a certain category of companies for incurring some qualifying capital expenditure on plant and equipment used for the business at the rate of 10% on cost.
- RURAL INVESTMENT ALLOWANCE– This is granted to all capital expenditures incurred by companies established in rural areas in respect of providing a lacking infrastructural facility.
- TAX HOLIDAYS: this is a temporary exemption of a new firms or investment from certain specified taxes, typically corporate income tax.
- CAPITAL ALLOWANCE– This is granted by the act on a qualifying capital expenditure incurred wholly, exclusively, for the purpose of trade or business.
- TAX: is a compulsory levy payable by individual economic units or corporate bodies to government without any direct quid pro quo from the government.
- 8. SMALL SCALE BUSINESS: It is defined as any business undertaken, owned, managed and controlled by not more than two entrepreneurs, has no more than twenty employees, has no definite organizational structure (i.e all employees report to the owners) and has relatively small shares of its market.
- BUSINESS GROWTH: this refers to the increase in the size, value and financial performance of a firm or company.
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 (#5000) 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) immediately 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.
HOW TO IDENTIFY SCAM/FRAUD
As a result of fraud in Nigeria, people don’t believe there are good online businesses in Nigeria.
But on this site, we have provided “table of content and chapter one” of all our project topics and materials in order to convince you that we have the complete materials.
Secondly, we have provided our Bank Account on this site. Our Bank Account contains all information about the owner of this website. For your own security, all payment should be made in the bank.
No Fraudulent company uses Bank Account as a means of payment, because Bank Account contains the overall information of the owner
CAUTION/WARNING
Please, DO NOT COPY any of our materials on this website WORD-TO-WORD. These materials are to assist, direct you during your project. Study the materials carefully and use the information in them to develop your own new copy. Copying these materials word-to-word is CHEATING/ ILLEGAL because it affects Educational standard, and we will not be held responsible for it. If you must copy word-to-word please do not order/buy.
That you ordered this material shows you have agreed not to copy word-to-word.
FOR MORE INFORMATION, CALL:
08068231953 or 08168759420
Visit any of my project websites below:
www.easyprojectmaterials.com
www.easyprojectmaterials.com.ng
www.easyprojectmaterial.net
www.easyprojectmaterial.net.ng
www.easyprojectsolutions.com
www.worldofnolimit.com
www.worldofnolimit.com
www.nairaproject.com.ng
www.nairaprojects.com.ng
www.nairaproject.net
www.nairaprojects.net
www.uniproject.com.ng
www.uniprojects.com.ng
Tags: EFFECT OF TAX INCENTIVES AND CONCESSION ON GROWTH AND DEVELOPMENT OF SMEs IN NIGERIA CASE STUDY OF (SME TAXPAYERS IN IKEJA LAGOS STATE, IBADAN]
CHAPTER ONE
INTRODUCTION
1.1. BACKGROUND TO THE STUDY
Small businesses are seen as one key source of economic growth. For this reason,myriad economic policies have been devoted to promote the economic activity within small businesses (Buss 2001).
Small and medium enterprises (SMEs) form the core of majority of the world’s economies. A study carried out by the Federal Office of Statistics shows that in Nigeria, small and medium enterprises make up 97% of the economy (Ariyo, 2005). Although smaller in size, they are the most important enterprises in the economy due to the fact that when all the individual effects are aggregated, they surpass that of the larger companies. The social and economic advantages of small and medium enterprises cannot be overstated.
This SMEs are seen as a source of employment, competition, economic dynamism, and innovation which stimulate the entrepreneurial spirit and the diffusion of skills. Because they enjoy a wider geographical presence than big companies, SMEs also contribute to better income distribution. Over the years, small and medium enterprises have been an avenue for job creation and the empowerment of Nigeria’s citizens providing about 50% of all jobs in Nigeria and also for local capital formation. Being highly innovative, they lead to the utilization of our natural resources which in turn translates to increasing the country’s wealth through higher productivity. Small and medium scale enterprises have undoubtedly improved the standard of living of so many people especially those in the rural areas.
The mode by which SME development and economic growth can be effectively, efficiently, stimulated and developed is very demanding. As a result of this, the government charges less tax and gives tax holidays in order to encourage investments and economic activities of these small scale entrepreneur in those areas which help to improve production capabilities, activate economic growth as well as the allocation of resources in a socially desirable manner.
To the small scale enterprises, the general feature of agood tax system (tax base rate) is more important than the tax incentives in many developing countries. The tax laws are not clearly written and may be subject to frequent review which makes long-term planning difficult for businesses and add to the perceived risks of undertaking major capital intensive projects.
Taxation is a process or means through which communities or groups are made to contribute a part of their income for the sole purpose of societal administration while tax, is a compulsory levy levied on the people at a given place for the sole purpose of government revenue for government expenditure.
Tax incentive itself, is the use of government spending and tax policies to influence the level of national income. This measure encourages the springing up and gradual growth of new enterprises by the reduction of profit tax, which in turn encourages production, influences the production level and curbs unemployment. So, the government should provide such tax incentives in order to boost development which will bring about an increase in employment opportunities and also cause an improvement in the economy, tax incentives according to Kuewumi (1996) encompass all the measures adopted by government to motive tax payers to respond favorably to their tax obligations. It includes adjustments to tax policy aimed at lessening the effects of taxation on an industry, a group of persons or the provision of certain services. Such measures may subsume the adoption of benign low tax rate; the effective dissemination of fiscal information by tax authority; or the non-imposition of tax at all.
Amadiegwu (2008:74), a tax expert wrote that the objective of tax incentive is that by borrowing rather than taxing, the government has a better chance of expanding investment spending which is essential in enlarging production possibilities and attaining a sustainable improvement in the standard of living of the people.
Dotun and Sanni (2009:265), in their “Nigerian companies’ taxation” stated that these incentives can be targeted on the low income earners, local and developing industries, farmers, which will increase their savings and is necessary for higher investment. Tax incentives create employment opportunities for the people, helps to fight economic depression and inflation thereby increasing the equitable distribution of income and wealth.
1.2. STATEMENT OF PROBLEM
The mortality rate of these small scale enterprises is very high. According to the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) Nigeria, 80% of SMES die before their 5th anniversary. Among the factors responsible for these untimely close-ups are tax related issues, ranging from multiple taxations to enormous tax burdens etc.
In developing countries like Nigeria, there is an urgent need to provide the required enabling environment for the development of SMEs, so that they could adequately play the role expected of them in economic transformation. Such role includes mobilization of domestic savings for investment, appreciable contribution to gross domestic product, increased harnessing of local raw materials, employment generation, and significant contribution of poverty reduction efforts through sustainable livelihoods and enhancement in personnel income, technological development and export diversification (Smatrakalev, 2006), however this is not the case because taxes which are levied for regulating the investment behavior of the households are suffocating the entrepreneur growth and development, and this also serves as a major constraint to the development of the SMEs they are out to cater for.
Various people believes that a tax incentive encourages economic growth and industrial development of SMEs while another believes that it reduces revenue accruable to the government, As a result of this, it does not stimulate the economy. The poverty alleviation programme aimed at reducing the rate of poverty among the masses, was introduced. This programme covered the provision of jobs for able and unemployed youths, provision of loans for small and medium scale enterprises at a minimum lending rate, yet there is no gainsaying that this measures and policies taken so far, yield positive development to the economy.
Finally, most tax experts, consultants, Individuals and economic analysts ignored or criticized the incentive for the following reasons:
1. That the impacts of the tax incentives are not effective in the economy.
2. That the exemption privilege not granted to all SMES places some enterprises at a competitive advantage over others.
3. That the incentive granted are not adequate for the developmental and industrial growth of SMEs.
4. Most entrepreneurs, firms and industries lack the awareness of the incentive.
1.3. OBJECTIVES OF THE STUDY
Tax incentive scheme is an economic policy which exists among many other competing alternatives. The scheme may be an inducement towards rightful investment, securing proposal on private investors lay behind, it then follows that if the scheme is a pale shadow for pilling stock of profitable that the benefits expected from these incentives should be able to justify the cost.
In the light of the above, the study shall seeks to examine the extent to which tax incentives affects the growth and development of small scale entrepreneurs.
Other specific objective includes:
- Establish the relationship between tax policy and the growth of SMEs in Nigeria
- Assess the various incentives available to small scale entrepreneur.
- To examine the relationship between tax incentives and SMEs survival
- Ascertain how tax incentives stimulate individuals to establish new enterprises which will boost industrial development and economic growth
- Determine how tax incentives affect productivity level and growth of new small scale enterprises.
- Assess the economic implication of granting tax incentives to SMEs.
1.5 SIGNIFICANCE OF THE STUDY
Tax incentive is a strong fiscal measure or policy which can stimulate investment and savings leading to capital information. This capital acquisition can be used productively in economic and industrial development of companies and individual can use them effectively. In deciding if these incentives can stimulate the companies and individuals to invest in the economy. One basic fact is this whether the company individual concern decided to go into business because of tax incentives offered.
This study will contribute immensely to existing literature on benefits of tax incentives to small scale enterprises, and as a result of the creation of more SMES and with the expansion of the existing ones, the standard of living of the populace will be positively affected.
It will also broaden the knowledge of small taxpayers on various types of tax incentives available to them, and how the various tax incentive scheme leading to economic diversification result in increasing urban and rural development.
The study is also important as it will help ascertain if fiscal authority is keeping track on tax mobilization with GDP growth and to identify those taxes which are income elastic or otherwise in order to raise overall tax revenue.
Finally this study will be of great significance to government, tax officials, tax authority, small scale entrepreneur, investors, corporate organizations, schools and students who are regular taxpayers, it will serve as a reference point for student who would like to make future research or contribute to the existing literature.
1.6. SCOPE OF THE STUDY
The research study will be limited to the use of questionnaires and oral interviews when appropriate and to a review of related literature (review of relevant books and journals) that could provide an insight into the effect of tax incentives on industrial growth and development of SMEs.
Case studies will be restricted to seventy (70) small business owners who are taxpayers in Ikeja Metropolis, Lagos State.
The State is situated in southwestern region, and it is selected for this research study because it is part of the major industrial areas in the country.
1.7. LIMITATION OF THE STUDY
The constraints of this study may be attributed to:
1. Inherent limitations of the analytical method of gathering information such as the un-cooperative attitude of the respondents.
2. Irrelevant or unreliable information obtained from oral interviews. This is based on the degree of the respondent’s truthfulness in answering the question’s raised during oral interviews. Some of the respondents thought that the research work is meant to expose their enterprise and thus, were not ready to give relevant information.
3. The writer was also faced with time constraint which involved appropriating her time between writing the project work and performing her academic function as well as meeting her social needs.
4. Also encountered was the problem of getting an exact from the school authorities for the purpose of the research work.
1.8. DEFINITION OF TERMS
- INCENTIVE:An incentive is a form of tax relief, inform of a reduction in or an exemption from the tax which someone, a firm, or an industry would normally be liable.
- TAX INCENTIVES-These are reliefs granted to tax payers or industries in form of an off-set from the total profit before tax liability is determined. In case of industries and firms, tax incentives are given inform of tax holidays which is established by the legislative authorities on such payment of taxes.
- INVESTMENT ALLOWANCE– Investment allowance is given as a tax incentive to a certain category of companies for incurring some qualifying capital expenditure on plant and equipment used for the business at the rate of 10% on cost.
- RURAL INVESTMENT ALLOWANCE– This is granted to all capital expenditures incurred by companies established in rural areas in respect of providing a lacking infrastructural facility.
- TAX HOLIDAYS: this is a temporary exemption of a new firms or investment from certain specified taxes, typically corporate income tax.
- CAPITAL ALLOWANCE– This is granted by the act on a qualifying capital expenditure incurred wholly, exclusively, for the purpose of trade or business.
- TAX: is a compulsory levy payable by individual economic units or corporate bodies to government without any direct quid pro quo from the government.
- 8. SMALL SCALE BUSINESS: It is defined as any business undertaken, owned, managed and controlled by not more than two entrepreneurs, has no more than twenty employees, has no definite organizational structure (i.e all employees report to the owners) and has relatively small shares of its market.
- BUSINESS GROWTH: this refers to the increase in the size, value and financial performance of a firm or company.
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 (#5000) 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) immediately 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.
HOW TO IDENTIFY SCAM/FRAUD
As a result of fraud in Nigeria, people don’t believe there are good online businesses in Nigeria.
But on this site, we have provided “table of content and chapter one” of all our project topics and materials in order to convince you that we have the complete materials.
Secondly, we have provided our Bank Account on this site. Our Bank Account contains all information about the owner of this website. For your own security, all payment should be made in the bank.
No Fraudulent company uses Bank Account as a means of payment, because Bank Account contains the overall information of the owner
CAUTION/WARNING
Please, DO NOT COPY any of our materials on this website WORD-TO-WORD. These materials are to assist, direct you during your project. Study the materials carefully and use the information in them to develop your own new copy. Copying these materials word-to-word is CHEATING/ ILLEGAL because it affects Educational standard, and we will not be held responsible for it. If you must copy word-to-word please do not order/buy.
That you ordered this material shows you have agreed not to copy word-to-word.
FOR MORE INFORMATION, CALL:
08068231953 or 08168759420
Visit any of my project websites below:
www.easyprojectmaterials.com
www.easyprojectmaterials.com.ng
www.easyprojectmaterial.net
www.easyprojectmaterial.net.ng
www.easyprojectsolutions.com
www.worldofnolimit.com
www.worldofnolimit.com
www.nairaproject.com.ng
www.nairaprojects.com.ng
www.nairaproject.net
www.nairaprojects.net
www.uniproject.com.ng
www.uniprojects.com.ng
Tags: EFFECT OF TAX INCENTIVES AND CONCESSION ON GROWTH AND DEVELOPMENT OF SMEs IN NIGERIA CASE STUDY OF (SME TAXPAYERS IN IKEJA LAGOS STATE, IBADAN]
CHAPTER ONE
1.1 INTRODUCTION
Internal Audit Units are established in organizations in order to assist members of the Organization in the effective discharge of their responsibilities, monitor the use of resources and make recommendations for the improvement of the organizational operations.
The day-to-day operation of an organization is delegated to the management by the Board of Directors. The head of the management often referred to as the Managing Director and Chief Executive Officer serve as a link between the Board of Directors and the management.
An internal auditor is employed as an agent of the management for ensuring effective working of Internal Control System. Independence of auditor is a cornerstone for the quality of his performance.
However, it is practically difficult for an internal auditor to possess any reasonable degree of independence in mind and attitude because of the management influence and scope of the work. It needs to be emphasized that internal audit function as an integral part of the internal control system is concomitant to good corporate governance.
The purpose of internal audit in big companies is to ensure that the account on which the auditor is reporting disclose a true and fair view of the transaction summarized within the period under examination. To ensure completeness and effectiveness in big companies, auditing is very important, the major work covered in the exercising of auditing include examination of internal control, the system of bookkeeping and account, to ensure whether they are appropriate for the nature of the business or activities being carried out by the client and whether all the transactions have been properly recorded under the system. The existence of any internal audit units in big companies is a sign of good control system. If properly conducted, internal audit units can have a great impact on the effectiveness and efficiency of big companies.
Adeniji (2004) suggest that internal audit as an independent appraisal activity established within an organization as a service to it. It is a control, which functions by examining and evaluating the adequacy and effectiveness of other controls.
Adams (2002), opined that internal auditing is an independent appraisal actively for the review of operations as a service to the management. Internal auditor here is one who is employed by the management of an enterprise who may or may not attain minimum academic or professional qualification, that is he may not be a member of any recognized body e.g. ICAN, ANAN.
It is in the view of the above that this study would be conducted to find out the role played by an internal auditor in big companies through proper installation of effective Internal Control System in big companies. Internal control system is examined by internal auditor in order for him to know if the control system is effective. He does this by carrying out compliance test. Internal check is done in order to prevent and detect errors and fraud. It involves the arrangement of bookkeeping and other clerical duties.
Internal Audit is a review of the operations, procedures and records of the business. Internal Auditing is itself an Internal Control which operates by appraising and reporting on the effectiveness of the other controls. Thus, its main objective is to assist management in discharging its responsibilities and to evaluate compliance with corporate procedures. It is often assigned for reviewing the accounting system and related Internal Controls, monitoring their operation and recommending improvement thereto, and also the examination of financial and operating information.
Aquaisua (2004) opines internal audit as the process of continuous review of financial transactions in order to ensure that they are working as the management intends. All the regulations, instructions, accounting system or procedures and rules set should be controlled to ensure that they are working as prescribed. It assures management of the adequacy and appropriateness of the system of internal controls by testing their operations. Usually, Government, financial instructions provide that the Accounting Officers of Ministries or Departments or (non-ministerial) departments will ensure that, subject to the availability of staff, an internal audit unit be established to provide a complete and continuous audit of accounts of revenue, expenditure, plant, allocated stores and un-allocated stores where applicable.
Omoya (1984) suggests that the duty of the internal auditor, who should be responsible to accounting officer will be to audit account and records and for the examination of the systems and procedures in force. His report should be submitted to the Accounting officer copying the Auditor-general of his state. He should have an audit programme which should be submitted to the Accounting Officer and for the acceptance of the Accountant General and Auditor General. Such programmes should ensure that the programme of audit will extend to cover all the records of the ministry, department or unit, in order to satisfy himself that:
i) The safeguards introduced for the prevention of the prompt detection of fraud and loss of cash or stores or plants are adequate. Normal safeguards include the observance of government and departmental regulators and instructors and for existence of internal checks.
ii) The system for the control of the collection of revenue is adequate and that all monies received have been promptly brought to account to the correct head and sub-head.
iii) The system for the control of expenditure is adequate and that all payments made are properly authorized and correct, that they are paid to the right person, for whom they were authorized.
iv) The system for the control of the issue and consumption of stores is adequate, that issues are made to the right person and are used for the purpose for which they are authorized.
v) There are adequate means for which the verification is done by him, of all cash, stores and plant held.
Bigg and Davies (1994) postulates, Internal Auditing is an independent objective assurance and consulting actively designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk Management Control are governance processes. Independence is established by the organizational and reporting structure.
Objectivity is achieved by an appropriate mind-set, the internal audit activity evaluates risk exposures relating to the organization’s governance, operations and information system in related to:
i) Effectiveness and efficiency of operations
ii) Reliability and integrity of financial and operational information
iii) Safeguarding of assets
iv) Compliance with laws, regulations and contracts
Based on the result of the risk assessment, the internal auditors evaluate the adequacy and effectiveness of how risks are identified and managed in the above areas. They also asses other aspects such as ethics and values within the organization, performance management, communication of risk and control information within the organization in order to facilitate or good governance process
The internal auditors are expected to provide recommendations for improvement in those areas where opportunities or deficiencies are identified, while management is responsible for internal controls, the internal audit actively provides assurance to management and the audit committee that internal controls are effective and working as intended.
1.2 BACKGROUND OF INTERNAL AUDITING
The proliferation of large, dispersed, complex corporation starting early in twentieth century, spurred the accelerated development of the internal audit function. The Institute of Internal Auditors (IIA) was founded in 1941, largely in response to this development and modern internal auditing owes much of its early expansion of the scope of internal audit activities and the professionalization of the practice of internal auditing.
The development of professional under pinning for the profession however did not come all at once. It was not until 1947 that the Institute of Internal Auditor issued its first statement of responsibilities.
The code of ethics was issued in 1968 and standard in 1979. The first Certified Internal Auditor (CIA) exams were written in 1974, indicating that, there was that time deemed to be a recognized body of knowledge available for internal audit professionals. The potential value of the internal audit function came later to the public sector motivation. The United States Congress first recognized the potential contribution of internal audit in 1950, in requiring by statute that each executives agency include internal audit in the agency’s of internal control.
In 1973, the Treasury Board made it mandatory for all departments and agencies to internal audits performed on their systems of financial administration. Direction 9.1 of the policy started, departments hall have financial audit performed, which include:
Reviewing and appraising the effectiveness and efficiency of department system of financial administration including the safeguarding of assets. Ascertaining the extent of compliance of department systems and procedures with financial policies, regulations and other instruction of parliament, treasury board and the department of agency.
The internal audit policy component of review policy made no substantive changes to the scope of internal audit, but bolstered the professional under pinning of the practice by integrating treasury board and Institute of Internal Auditors Standards and ethics provision. Also in this policy, frequency requirements were dropped and the concept of risk based audit planning was introduced.
1.2.1 STATEMEMT OF THE PROBLEM
Internal audit provide advantages to the management, it is a tool of ensuring effective implementation of Internal Control System and infact, and it allows such internal control system to be reviewed where necessary. With internal audit, management policies are seen to be complied with and adequate information is made available for the management for decision making.
This research focuses on the weaknesses of internal audit units in an organization, that make it impossible for an internal auditor to carryout its duty at a specific time.
Problem of Appointment: The appointment of internal auditors has been encouraged by some officials who would want to manipulate financial control system so as to promote their fraudulent tendencies.
Problem of Qualification: Since the law does not stipulate a minimum qualification required of an internal auditor, it is not impossible to find out that some internal auditors do not possess the needed qualifications required.
Also to ascertain the level of independence of our auditors and if indeed they have been able to use their professional skills to check and correct the mis-happening in the organization.
Finally, which is the main focus of the research work, the role and evaluation of internal audit in an organization, to check how internal auditors are being frustrated by the chief executives, which makes it difficult to disclose information.
1.3 OBJECTIVES OF THE STUDY
The objectives of this study:
1. To examine the role the internal audit play in an organization
2. To identify problems hindering effective operations of internal audit in Coca-Cola company
3. To examine the preventive measures to applied by internal auditor in coca-cola company
4. To offer recommendations based on the findings of the study.
1.4 RESEARCH QUESTIONS
This research work proposed to assess the role of internal audit in big companies and to ensure adherence and effectiveness of audit work in big companies. The study would see to provide answers to the following research questions:
i) How does internal audit enhance the effectiveness and efficiency of operations of coca-cola company?
ii) What are the problems that are likely to be encountered by the internal audit in carrying out its duties?
iii) How independent is internal audit in coca-cola company?
iv) What are the problems militating the effective operations of internal audit in coca-cola company?
1.5 SIGNIFICANCE OF THE STUDY
The main significant of this research is that it would enlighten the management on the importance of both internal auditing and internal control. Also people who are not in the system such as those in the academic cycle will have a picture of what internal audit and the role played in coca-cola company and organization.
The management benefits from this work by knowing the actual picture of their Internal Control so as to know whether or not it is reliable. Also, government is not left behind in that when completed the research would undoubtedly identify to the government areas where attention would be greatly placed in order to sanitize the system for better revenue generation.
External auditors also benefits from this research work, this is because internal auditor can assist external auditor in familiarizing himself with the accounting system, and act as a liaison between the external auditor and other members of the client staff.
This study would serve as a reference material to students and researchers who would want to conduct further researches/studies on internal auditors in big companies.
1.6 SCOPE OF THE STUDY
The scope of this research is limited to the area of an evaluation of the role of internal auditors in an organization a case study of coca-cola company, Ibadan, Lagos state Branch. The company is used as the case study. The research tends to highlight the ways in which internal audit is carried out in organization and how the internal audits in itself is. The scope of this research will also focus its attention to the status of the internal auditor, his responsibilities, independence practice as well as the problems encountered in the course of carrying its duties and the possible solutions to the problems. It is hoped that the information gathered will greatly reflect the generality of organization.
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 (#5000) 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) immediately 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.
HOW TO IDENTIFY SCAM/FRAUD
As a result of fraud in Nigeria, people don’t believe there are good online businesses in Nigeria.
But on this site, we have provided “table of content and chapter one” of all our project topics and materials in order to convince you that we have the complete materials.
Secondly, we have provided our Bank Account on this site. Our Bank Account contains all information about the owner of this website. For your own security, all payment should be made in the bank.
No Fraudulent company uses Bank Account as a means of payment, because Bank Account contains the overall information of the owner
CAUTION/WARNING
Please, DO NOT COPY any of our materials on this website WORD-TO-WORD. These materials are to assist, direct you during your project. Study the materials carefully and use the information in them to develop your own new copy. Copying these materials word-to-word is CHEATING/ ILLEGAL because it affects Educational standard, and we will not be held responsible for it. If you must copy word-to-word please do not order/buy.
That you ordered this material shows you have agreed not to copy word-to-word.
FOR MORE INFORMATION, CALL:
08068231953 or 08168759420
Visit any of my project websites below:
www.easyprojectmaterials.com
www.easyprojectmaterials.com.ng
www.easyprojectmaterial.net
www.easyprojectmaterial.net.ng
www.easyprojectsolutions.com
www.worldofnolimit.com
www.worldofnolimit.com
www.nairaproject.com.ng
www.nairaprojects.com.ng
www.nairaproject.net
www.nairaprojects.net
www.uniproject.com.ng
www.uniprojects.com.ng
Tags: AN EVALUATION OF THE ROLE OF INTERNAL AUDITORS IN AN ORGANIZATION [A CASE STUDY OF COCA-COLA, IBADAN]
CHAPTER ONE
1.1 INTRODUCTION
Internal Audit Units are established in organizations in order to assist members of the Organization in the effective discharge of their responsibilities, monitor the use of resources and make recommendations for the improvement of the organizational operations.
The day-to-day operation of an organization is delegated to the management by the Board of Directors. The head of the management often referred to as the Managing Director and Chief Executive Officer serve as a link between the Board of Directors and the management.
An internal auditor is employed as an agent of the management for ensuring effective working of Internal Control System. Independence of auditor is a cornerstone for the quality of his performance.
However, it is practically difficult for an internal auditor to possess any reasonable degree of independence in mind and attitude because of the management influence and scope of the work. It needs to be emphasized that internal audit function as an integral part of the internal control system is concomitant to good corporate governance.
The purpose of internal audit in big companies is to ensure that the account on which the auditor is reporting disclose a true and fair view of the transaction summarized within the period under examination. To ensure completeness and effectiveness in big companies, auditing is very important, the major work covered in the exercising of auditing include examination of internal control, the system of bookkeeping and account, to ensure whether they are appropriate for the nature of the business or activities being carried out by the client and whether all the transactions have been properly recorded under the system. The existence of any internal audit units in big companies is a sign of good control system. If properly conducted, internal audit units can have a great impact on the effectiveness and efficiency of big companies.
Adeniji (2004) suggest that internal audit as an independent appraisal activity established within an organization as a service to it. It is a control, which functions by examining and evaluating the adequacy and effectiveness of other controls.
Adams (2002), opined that internal auditing is an independent appraisal actively for the review of operations as a service to the management. Internal auditor here is one who is employed by the management of an enterprise who may or may not attain minimum academic or professional qualification, that is he may not be a member of any recognized body e.g. ICAN, ANAN.
It is in the view of the above that this study would be conducted to find out the role played by an internal auditor in big companies through proper installation of effective Internal Control System in big companies. Internal control system is examined by internal auditor in order for him to know if the control system is effective. He does this by carrying out compliance test. Internal check is done in order to prevent and detect errors and fraud. It involves the arrangement of bookkeeping and other clerical duties.
Internal Audit is a review of the operations, procedures and records of the business. Internal Auditing is itself an Internal Control which operates by appraising and reporting on the effectiveness of the other controls. Thus, its main objective is to assist management in discharging its responsibilities and to evaluate compliance with corporate procedures. It is often assigned for reviewing the accounting system and related Internal Controls, monitoring their operation and recommending improvement thereto, and also the examination of financial and operating information.
Aquaisua (2004) opines internal audit as the process of continuous review of financial transactions in order to ensure that they are working as the management intends. All the regulations, instructions, accounting system or procedures and rules set should be controlled to ensure that they are working as prescribed. It assures management of the adequacy and appropriateness of the system of internal controls by testing their operations. Usually, Government, financial instructions provide that the Accounting Officers of Ministries or Departments or (non-ministerial) departments will ensure that, subject to the availability of staff, an internal audit unit be established to provide a complete and continuous audit of accounts of revenue, expenditure, plant, allocated stores and un-allocated stores where applicable.
Omoya (1984) suggests that the duty of the internal auditor, who should be responsible to accounting officer will be to audit account and records and for the examination of the systems and procedures in force. His report should be submitted to the Accounting officer copying the Auditor-general of his state. He should have an audit programme which should be submitted to the Accounting Officer and for the acceptance of the Accountant General and Auditor General. Such programmes should ensure that the programme of audit will extend to cover all the records of the ministry, department or unit, in order to satisfy himself that:
i) The safeguards introduced for the prevention of the prompt detection of fraud and loss of cash or stores or plants are adequate. Normal safeguards include the observance of government and departmental regulators and instructors and for existence of internal checks.
ii) The system for the control of the collection of revenue is adequate and that all monies received have been promptly brought to account to the correct head and sub-head.
iii) The system for the control of expenditure is adequate and that all payments made are properly authorized and correct, that they are paid to the right person, for whom they were authorized.
iv) The system for the control of the issue and consumption of stores is adequate, that issues are made to the right person and are used for the purpose for which they are authorized.
v) There are adequate means for which the verification is done by him, of all cash, stores and plant held.
Bigg and Davies (1994) postulates, Internal Auditing is an independent objective assurance and consulting actively designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk Management Control are governance processes. Independence is established by the organizational and reporting structure.
Objectivity is achieved by an appropriate mind-set, the internal audit activity evaluates risk exposures relating to the organization’s governance, operations and information system in related to:
i) Effectiveness and efficiency of operations
ii) Reliability and integrity of financial and operational information
iii) Safeguarding of assets
iv) Compliance with laws, regulations and contracts
Based on the result of the risk assessment, the internal auditors evaluate the adequacy and effectiveness of how risks are identified and managed in the above areas. They also asses other aspects such as ethics and values within the organization, performance management, communication of risk and control information within the organization in order to facilitate or good governance process
The internal auditors are expected to provide recommendations for improvement in those areas where opportunities or deficiencies are identified, while management is responsible for internal controls, the internal audit actively provides assurance to management and the audit committee that internal controls are effective and working as intended.
1.2 BACKGROUND OF INTERNAL AUDITING
The proliferation of large, dispersed, complex corporation starting early in twentieth century, spurred the accelerated development of the internal audit function. The Institute of Internal Auditors (IIA) was founded in 1941, largely in response to this development and modern internal auditing owes much of its early expansion of the scope of internal audit activities and the professionalization of the practice of internal auditing.
The development of professional under pinning for the profession however did not come all at once. It was not until 1947 that the Institute of Internal Auditor issued its first statement of responsibilities.
The code of ethics was issued in 1968 and standard in 1979. The first Certified Internal Auditor (CIA) exams were written in 1974, indicating that, there was that time deemed to be a recognized body of knowledge available for internal audit professionals. The potential value of the internal audit function came later to the public sector motivation. The United States Congress first recognized the potential contribution of internal audit in 1950, in requiring by statute that each executives agency include internal audit in the agency’s of internal control.
In 1973, the Treasury Board made it mandatory for all departments and agencies to internal audits performed on their systems of financial administration. Direction 9.1 of the policy started, departments hall have financial audit performed, which include:
Reviewing and appraising the effectiveness and efficiency of department system of financial administration including the safeguarding of assets. Ascertaining the extent of compliance of department systems and procedures with financial policies, regulations and other instruction of parliament, treasury board and the department of agency.
The internal audit policy component of review policy made no substantive changes to the scope of internal audit, but bolstered the professional under pinning of the practice by integrating treasury board and Institute of Internal Auditors Standards and ethics provision. Also in this policy, frequency requirements were dropped and the concept of risk based audit planning was introduced.
1.2.1 STATEMEMT OF THE PROBLEM
Internal audit provide advantages to the management, it is a tool of ensuring effective implementation of Internal Control System and infact, and it allows such internal control system to be reviewed where necessary. With internal audit, management policies are seen to be complied with and adequate information is made available for the management for decision making.
This research focuses on the weaknesses of internal audit units in an organization, that make it impossible for an internal auditor to carryout its duty at a specific time.
Problem of Appointment: The appointment of internal auditors has been encouraged by some officials who would want to manipulate financial control system so as to promote their fraudulent tendencies.
Problem of Qualification: Since the law does not stipulate a minimum qualification required of an internal auditor, it is not impossible to find out that some internal auditors do not possess the needed qualifications required.
Also to ascertain the level of independence of our auditors and if indeed they have been able to use their professional skills to check and correct the mis-happening in the organization.
Finally, which is the main focus of the research work, the role and evaluation of internal audit in an organization, to check how internal auditors are being frustrated by the chief executives, which makes it difficult to disclose information.
1.3 OBJECTIVES OF THE STUDY
The objectives of this study:
1. To examine the role the internal audit play in an organization
2. To identify problems hindering effective operations of internal audit in Coca-Cola company
3. To examine the preventive measures to applied by internal auditor in coca-cola company
4. To offer recommendations based on the findings of the study.
1.4 RESEARCH QUESTIONS
This research work proposed to assess the role of internal audit in big companies and to ensure adherence and effectiveness of audit work in big companies. The study would see to provide answers to the following research questions:
i) How does internal audit enhance the effectiveness and efficiency of operations of coca-cola company?
ii) What are the problems that are likely to be encountered by the internal audit in carrying out its duties?
iii) How independent is internal audit in coca-cola company?
iv) What are the problems militating the effective operations of internal audit in coca-cola company?
1.5 SIGNIFICANCE OF THE STUDY
The main significant of this research is that it would enlighten the management on the importance of both internal auditing and internal control. Also people who are not in the system such as those in the academic cycle will have a picture of what internal audit and the role played in coca-cola company and organization.
The management benefits from this work by knowing the actual picture of their Internal Control so as to know whether or not it is reliable. Also, government is not left behind in that when completed the research would undoubtedly identify to the government areas where attention would be greatly placed in order to sanitize the system for better revenue generation.
External auditors also benefits from this research work, this is because internal auditor can assist external auditor in familiarizing himself with the accounting system, and act as a liaison between the external auditor and other members of the client staff.
This study would serve as a reference material to students and researchers who would want to conduct further researches/studies on internal auditors in big companies.
1.6 SCOPE OF THE STUDY
The scope of this research is limited to the area of an evaluation of the role of internal auditors in an organization a case study of coca-cola company, Ibadan, Lagos state Branch. The company is used as the case study. The research tends to highlight the ways in which internal audit is carried out in organization and how the internal audits in itself is. The scope of this research will also focus its attention to the status of the internal auditor, his responsibilities, independence practice as well as the problems encountered in the course of carrying its duties and the possible solutions to the problems. It is hoped that the information gathered will greatly reflect the generality of organization.
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 (#5000) 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) immediately 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.
HOW TO IDENTIFY SCAM/FRAUD
As a result of fraud in Nigeria, people don’t believe there are good online businesses in Nigeria.
But on this site, we have provided “table of content and chapter one” of all our project topics and materials in order to convince you that we have the complete materials.
Secondly, we have provided our Bank Account on this site. Our Bank Account contains all information about the owner of this website. For your own security, all payment should be made in the bank.
No Fraudulent company uses Bank Account as a means of payment, because Bank Account contains the overall information of the owner
CAUTION/WARNING
Please, DO NOT COPY any of our materials on this website WORD-TO-WORD. These materials are to assist, direct you during your project. Study the materials carefully and use the information in them to develop your own new copy. Copying these materials word-to-word is CHEATING/ ILLEGAL because it affects Educational standard, and we will not be held responsible for it. If you must copy word-to-word please do not order/buy.
That you ordered this material shows you have agreed not to copy word-to-word.
FOR MORE INFORMATION, CALL:
08068231953 or 08168759420
Visit any of my project websites below:
www.easyprojectmaterials.com
www.easyprojectmaterials.com.ng
www.easyprojectmaterial.net
www.easyprojectmaterial.net.ng
www.easyprojectsolutions.com
www.worldofnolimit.com
www.worldofnolimit.com
www.nairaproject.com.ng
www.nairaprojects.com.ng
www.nairaproject.net
www.nairaprojects.net
www.uniproject.com.ng
www.uniprojects.com.ng
Tags: AN EVALUATION OF THE ROLE OF INTERNAL AUDITORS IN AN ORGANIZATION [A CASE STUDY OF COCA-COLA, IBADAN]
CHAPTER ONE
1.1 INTRODUCTION
Internal Audit Units are established in organizations in order to assist members of the Organization in the effective discharge of their responsibilities, monitor the use of resources and make recommendations for the improvement of the organizational operations.
The day-to-day operation of an organization is delegated to the management by the Board of Directors. The head of the management often referred to as the Managing Director and Chief Executive Officer serve as a link between the Board of Directors and the management.
An internal auditor is employed as an agent of the management for ensuring effective working of Internal Control System. Independence of auditor is a cornerstone for the quality of his performance.
However, it is practically difficult for an internal auditor to possess any reasonable degree of independence in mind and attitude because of the management influence and scope of the work. It needs to be emphasized that internal audit function as an integral part of the internal control system is concomitant to good corporate governance.
The purpose of internal audit in big companies is to ensure that the account on which the auditor is reporting disclose a true and fair view of the transaction summarized within the period under examination. To ensure completeness and effectiveness in big companies, auditing is very important, the major work covered in the exercising of auditing include examination of internal control, the system of bookkeeping and account, to ensure whether they are appropriate for the nature of the business or activities being carried out by the client and whether all the transactions have been properly recorded under the system. The existence of any internal audit units in big companies is a sign of good control system. If properly conducted, internal audit units can have a great impact on the effectiveness and efficiency of big companies.
Adeniji (2004) suggest that internal audit as an independent appraisal activity established within an organization as a service to it. It is a control, which functions by examining and evaluating the adequacy and effectiveness of other controls.
Adams (2002), opined that internal auditing is an independent appraisal actively for the review of operations as a service to the management. Internal auditor here is one who is employed by the management of an enterprise who may or may not attain minimum academic or professional qualification, that is he may not be a member of any recognized body e.g. ICAN, ANAN.
It is in the view of the above that this study would be conducted to find out the role played by an internal auditor in big companies through proper installation of effective Internal Control System in big companies. Internal control system is examined by internal auditor in order for him to know if the control system is effective. He does this by carrying out compliance test. Internal check is done in order to prevent and detect errors and fraud. It involves the arrangement of bookkeeping and other clerical duties.
Internal Audit is a review of the operations, procedures and records of the business. Internal Auditing is itself an Internal Control which operates by appraising and reporting on the effectiveness of the other controls. Thus, its main objective is to assist management in discharging its responsibilities and to evaluate compliance with corporate procedures. It is often assigned for reviewing the accounting system and related Internal Controls, monitoring their operation and recommending improvement thereto, and also the examination of financial and operating information.
Aquaisua (2004) opines internal audit as the process of continuous review of financial transactions in order to ensure that they are working as the management intends. All the regulations, instructions, accounting system or procedures and rules set should be controlled to ensure that they are working as prescribed. It assures management of the adequacy and appropriateness of the system of internal controls by testing their operations. Usually, Government, financial instructions provide that the Accounting Officers of Ministries or Departments or (non-ministerial) departments will ensure that, subject to the availability of staff, an internal audit unit be established to provide a complete and continuous audit of accounts of revenue, expenditure, plant, allocated stores and un-allocated stores where applicable.
Omoya (1984) suggests that the duty of the internal auditor, who should be responsible to accounting officer will be to audit account and records and for the examination of the systems and procedures in force. His report should be submitted to the Accounting officer copying the Auditor-general of his state. He should have an audit programme which should be submitted to the Accounting Officer and for the acceptance of the Accountant General and Auditor General. Such programmes should ensure that the programme of audit will extend to cover all the records of the ministry, department or unit, in order to satisfy himself that:
i) The safeguards introduced for the prevention of the prompt detection of fraud and loss of cash or stores or plants are adequate. Normal safeguards include the observance of government and departmental regulators and instructors and for existence of internal checks.
ii) The system for the control of the collection of revenue is adequate and that all monies received have been promptly brought to account to the correct head and sub-head.
iii) The system for the control of expenditure is adequate and that all payments made are properly authorized and correct, that they are paid to the right person, for whom they were authorized.
iv) The system for the control of the issue and consumption of stores is adequate, that issues are made to the right person and are used for the purpose for which they are authorized.
v) There are adequate means for which the verification is done by him, of all cash, stores and plant held.
Bigg and Davies (1994) postulates, Internal Auditing is an independent objective assurance and consulting actively designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk Management Control are governance processes. Independence is established by the organizational and reporting structure.
Objectivity is achieved by an appropriate mind-set, the internal audit activity evaluates risk exposures relating to the organization’s governance, operations and information system in related to:
i) Effectiveness and efficiency of operations
ii) Reliability and integrity of financial and operational information
iii) Safeguarding of assets
iv) Compliance with laws, regulations and contracts
Based on the result of the risk assessment, the internal auditors evaluate the adequacy and effectiveness of how risks are identified and managed in the above areas. They also asses other aspects such as ethics and values within the organization, performance management, communication of risk and control information within the organization in order to facilitate or good governance process
The internal auditors are expected to provide recommendations for improvement in those areas where opportunities or deficiencies are identified, while management is responsible for internal controls, the internal audit actively provides assurance to management and the audit committee that internal controls are effective and working as intended.
1.2 BACKGROUND OF INTERNAL AUDITING
The proliferation of large, dispersed, complex corporation starting early in twentieth century, spurred the accelerated development of the internal audit function. The Institute of Internal Auditors (IIA) was founded in 1941, largely in response to this development and modern internal auditing owes much of its early expansion of the scope of internal audit activities and the professionalization of the practice of internal auditing.
The development of professional under pinning for the profession however did not come all at once. It was not until 1947 that the Institute of Internal Auditor issued its first statement of responsibilities.
The code of ethics was issued in 1968 and standard in 1979. The first Certified Internal Auditor (CIA) exams were written in 1974, indicating that, there was that time deemed to be a recognized body of knowledge available for internal audit professionals. The potential value of the internal audit function came later to the public sector motivation. The United States Congress first recognized the potential contribution of internal audit in 1950, in requiring by statute that each executives agency include internal audit in the agency’s of internal control.
In 1973, the Treasury Board made it mandatory for all departments and agencies to internal audits performed on their systems of financial administration. Direction 9.1 of the policy started, departments hall have financial audit performed, which include:
Reviewing and appraising the effectiveness and efficiency of department system of financial administration including the safeguarding of assets. Ascertaining the extent of compliance of department systems and procedures with financial policies, regulations and other instruction of parliament, treasury board and the department of agency.
The internal audit policy component of review policy made no substantive changes to the scope of internal audit, but bolstered the professional under pinning of the practice by integrating treasury board and Institute of Internal Auditors Standards and ethics provision. Also in this policy, frequency requirements were dropped and the concept of risk based audit planning was introduced.
1.2.1 STATEMEMT OF THE PROBLEM
Internal audit provide advantages to the management, it is a tool of ensuring effective implementation of Internal Control System and infact, and it allows such internal control system to be reviewed where necessary. With internal audit, management policies are seen to be complied with and adequate information is made available for the management for decision making.
This research focuses on the weaknesses of internal audit units in an organization, that make it impossible for an internal auditor to carryout its duty at a specific time.
Problem of Appointment: The appointment of internal auditors has been encouraged by some officials who would want to manipulate financial control system so as to promote their fraudulent tendencies.
Problem of Qualification: Since the law does not stipulate a minimum qualification required of an internal auditor, it is not impossible to find out that some internal auditors do not possess the needed qualifications required.
Also to ascertain the level of independence of our auditors and if indeed they have been able to use their professional skills to check and correct the mis-happening in the organization.
Finally, which is the main focus of the research work, the role and evaluation of internal audit in an organization, to check how internal auditors are being frustrated by the chief executives, which makes it difficult to disclose information.
1.3 OBJECTIVES OF THE STUDY
The objectives of this study:
1. To examine the role the internal audit play in an organization
2. To identify problems hindering effective operations of internal audit in Coca-Cola company
3. To examine the preventive measures to applied by internal auditor in coca-cola company
4. To offer recommendations based on the findings of the study.
1.4 RESEARCH QUESTIONS
This research work proposed to assess the role of internal audit in big companies and to ensure adherence and effectiveness of audit work in big companies. The study would see to provide answers to the following research questions:
i) How does internal audit enhance the effectiveness and efficiency of operations of coca-cola company?
ii) What are the problems that are likely to be encountered by the internal audit in carrying out its duties?
iii) How independent is internal audit in coca-cola company?
iv) What are the problems militating the effective operations of internal audit in coca-cola company?
1.5 SIGNIFICANCE OF THE STUDY
The main significant of this research is that it would enlighten the management on the importance of both internal auditing and internal control. Also people who are not in the system such as those in the academic cycle will have a picture of what internal audit and the role played in coca-cola company and organization.
The management benefits from this work by knowing the actual picture of their Internal Control so as to know whether or not it is reliable. Also, government is not left behind in that when completed the research would undoubtedly identify to the government areas where attention would be greatly placed in order to sanitize the system for better revenue generation.
External auditors also benefits from this research work, this is because internal auditor can assist external auditor in familiarizing himself with the accounting system, and act as a liaison between the external auditor and other members of the client staff.
This study would serve as a reference material to students and researchers who would want to conduct further researches/studies on internal auditors in big companies.
1.6 SCOPE OF THE STUDY
The scope of this research is limited to the area of an evaluation of the role of internal auditors in an organization a case study of coca-cola company, Ibadan, Lagos state Branch. The company is used as the case study. The research tends to highlight the ways in which internal audit is carried out in organization and how the internal audits in itself is. The scope of this research will also focus its attention to the status of the internal auditor, his responsibilities, independence practice as well as the problems encountered in the course of carrying its duties and the possible solutions to the problems. It is hoped that the information gathered will greatly reflect the generality of organization.
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 (#5000) 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) immediately 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.
HOW TO IDENTIFY SCAM/FRAUD
As a result of fraud in Nigeria, people don’t believe there are good online businesses in Nigeria.
But on this site, we have provided “table of content and chapter one” of all our project topics and materials in order to convince you that we have the complete materials.
Secondly, we have provided our Bank Account on this site. Our Bank Account contains all information about the owner of this website. For your own security, all payment should be made in the bank.
No Fraudulent company uses Bank Account as a means of payment, because Bank Account contains the overall information of the owner
CAUTION/WARNING
Please, DO NOT COPY any of our materials on this website WORD-TO-WORD. These materials are to assist, direct you during your project. Study the materials carefully and use the information in them to develop your own new copy. Copying these materials word-to-word is CHEATING/ ILLEGAL because it affects Educational standard, and we will not be held responsible for it. If you must copy word-to-word please do not order/buy.
That you ordered this material shows you have agreed not to copy word-to-word.
FOR MORE INFORMATION, CALL:
08068231953 or 08168759420
Visit any of my project websites below:
www.easyprojectmaterials.com
www.easyprojectmaterials.com.ng
www.easyprojectmaterial.net
www.easyprojectmaterial.net.ng
www.easyprojectsolutions.com
www.worldofnolimit.com
www.worldofnolimit.com
www.nairaproject.com.ng
www.nairaprojects.com.ng
www.nairaproject.net
www.nairaprojects.net
www.uniproject.com.ng
www.uniprojects.com.ng
Tags: AN EVALUATION OF THE ROLE OF INTERNAL AUDITORS IN AN ORGANIZATION [A CASE STUDY OF COCA-COLA, IBADAN]
CHAPTER ONE
1.1 INTRODUCTION
Internal Audit Units are established in organizations in order to assist members of the Organization in the effective discharge of their responsibilities, monitor the use of resources and make recommendations for the improvement of the organizational operations.
The day-to-day operation of an organization is delegated to the management by the Board of Directors. The head of the management often referred to as the Managing Director and Chief Executive Officer serve as a link between the Board of Directors and the management.
An internal auditor is employed as an agent of the management for ensuring effective working of Internal Control System. Independence of auditor is a cornerstone for the quality of his performance.
However, it is practically difficult for an internal auditor to possess any reasonable degree of independence in mind and attitude because of the management influence and scope of the work. It needs to be emphasized that internal audit function as an integral part of the internal control system is concomitant to good corporate governance.
The purpose of internal audit in big companies is to ensure that the account on which the auditor is reporting disclose a true and fair view of the transaction summarized within the period under examination. To ensure completeness and effectiveness in big companies, auditing is very important, the major work covered in the exercising of auditing include examination of internal control, the system of bookkeeping and account, to ensure whether they are appropriate for the nature of the business or activities being carried out by the client and whether all the transactions have been properly recorded under the system. The existence of any internal audit units in big companies is a sign of good control system. If properly conducted, internal audit units can have a great impact on the effectiveness and efficiency of big companies.
Adeniji (2004) suggest that internal audit as an independent appraisal activity established within an organization as a service to it. It is a control, which functions by examining and evaluating the adequacy and effectiveness of other controls.
Adams (2002), opined that internal auditing is an independent appraisal actively for the review of operations as a service to the management. Internal auditor here is one who is employed by the management of an enterprise who may or may not attain minimum academic or professional qualification, that is he may not be a member of any recognized body e.g. ICAN, ANAN.
It is in the view of the above that this study would be conducted to find out the role played by an internal auditor in big companies through proper installation of effective Internal Control System in big companies. Internal control system is examined by internal auditor in order for him to know if the control system is effective. He does this by carrying out compliance test. Internal check is done in order to prevent and detect errors and fraud. It involves the arrangement of bookkeeping and other clerical duties.
Internal Audit is a review of the operations, procedures and records of the business. Internal Auditing is itself an Internal Control which operates by appraising and reporting on the effectiveness of the other controls. Thus, its main objective is to assist management in discharging its responsibilities and to evaluate compliance with corporate procedures. It is often assigned for reviewing the accounting system and related Internal Controls, monitoring their operation and recommending improvement thereto, and also the examination of financial and operating information.
Aquaisua (2004) opines internal audit as the process of continuous review of financial transactions in order to ensure that they are working as the management intends. All the regulations, instructions, accounting system or procedures and rules set should be controlled to ensure that they are working as prescribed. It assures management of the adequacy and appropriateness of the system of internal controls by testing their operations. Usually, Government, financial instructions provide that the Accounting Officers of Ministries or Departments or (non-ministerial) departments will ensure that, subject to the availability of staff, an internal audit unit be established to provide a complete and continuous audit of accounts of revenue, expenditure, plant, allocated stores and un-allocated stores where applicable.
Omoya (1984) suggests that the duty of the internal auditor, who should be responsible to accounting officer will be to audit account and records and for the examination of the systems and procedures in force. His report should be submitted to the Accounting officer copying the Auditor-general of his state. He should have an audit programme which should be submitted to the Accounting Officer and for the acceptance of the Accountant General and Auditor General. Such programmes should ensure that the programme of audit will extend to cover all the records of the ministry, department or unit, in order to satisfy himself that:
i) The safeguards introduced for the prevention of the prompt detection of fraud and loss of cash or stores or plants are adequate. Normal safeguards include the observance of government and departmental regulators and instructors and for existence of internal checks.
ii) The system for the control of the collection of revenue is adequate and that all monies received have been promptly brought to account to the correct head and sub-head.
iii) The system for the control of expenditure is adequate and that all payments made are properly authorized and correct, that they are paid to the right person, for whom they were authorized.
iv) The system for the control of the issue and consumption of stores is adequate, that issues are made to the right person and are used for the purpose for which they are authorized.
v) There are adequate means for which the verification is done by him, of all cash, stores and plant held.
Bigg and Davies (1994) postulates, Internal Auditing is an independent objective assurance and consulting actively designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk Management Control are governance processes. Independence is established by the organizational and reporting structure.
Objectivity is achieved by an appropriate mind-set, the internal audit activity evaluates risk exposures relating to the organization’s governance, operations and information system in related to:
i) Effectiveness and efficiency of operations
ii) Reliability and integrity of financial and operational information
iii) Safeguarding of assets
iv) Compliance with laws, regulations and contracts
Based on the result of the risk assessment, the internal auditors evaluate the adequacy and effectiveness of how risks are identified and managed in the above areas. They also asses other aspects such as ethics and values within the organization, performance management, communication of risk and control information within the organization in order to facilitate or good governance process
The internal auditors are expected to provide recommendations for improvement in those areas where opportunities or deficiencies are identified, while management is responsible for internal controls, the internal audit actively provides assurance to management and the audit committee that internal controls are effective and working as intended.
1.2 BACKGROUND OF INTERNAL AUDITING
The proliferation of large, dispersed, complex corporation starting early in twentieth century, spurred the accelerated development of the internal audit function. The Institute of Internal Auditors (IIA) was founded in 1941, largely in response to this development and modern internal auditing owes much of its early expansion of the scope of internal audit activities and the professionalization of the practice of internal auditing.
The development of professional under pinning for the profession however did not come all at once. It was not until 1947 that the Institute of Internal Auditor issued its first statement of responsibilities.
The code of ethics was issued in 1968 and standard in 1979. The first Certified Internal Auditor (CIA) exams were written in 1974, indicating that, there was that time deemed to be a recognized body of knowledge available for internal audit professionals. The potential value of the internal audit function came later to the public sector motivation. The United States Congress first recognized the potential contribution of internal audit in 1950, in requiring by statute that each executives agency include internal audit in the agency’s of internal control.
In 1973, the Treasury Board made it mandatory for all departments and agencies to internal audits performed on their systems of financial administration. Direction 9.1 of the policy started, departments hall have financial audit performed, which include:
Reviewing and appraising the effectiveness and efficiency of department system of financial administration including the safeguarding of assets. Ascertaining the extent of compliance of department systems and procedures with financial policies, regulations and other instruction of parliament, treasury board and the department of agency.
The internal audit policy component of review policy made no substantive changes to the scope of internal audit, but bolstered the professional under pinning of the practice by integrating treasury board and Institute of Internal Auditors Standards and ethics provision. Also in this policy, frequency requirements were dropped and the concept of risk based audit planning was introduced.
1.2.1 STATEMEMT OF THE PROBLEM
Internal audit provide advantages to the management, it is a tool of ensuring effective implementation of Internal Control System and infact, and it allows such internal control system to be reviewed where necessary. With internal audit, management policies are seen to be complied with and adequate information is made available for the management for decision making.
This research focuses on the weaknesses of internal audit units in an organization, that make it impossible for an internal auditor to carryout its duty at a specific time.
Problem of Appointment: The appointment of internal auditors has been encouraged by some officials who would want to manipulate financial control system so as to promote their fraudulent tendencies.
Problem of Qualification: Since the law does not stipulate a minimum qualification required of an internal auditor, it is not impossible to find out that some internal auditors do not possess the needed qualifications required.
Also to ascertain the level of independence of our auditors and if indeed they have been able to use their professional skills to check and correct the mis-happening in the organization.
Finally, which is the main focus of the research work, the role and evaluation of internal audit in an organization, to check how internal auditors are being frustrated by the chief executives, which makes it difficult to disclose information.
1.3 OBJECTIVES OF THE STUDY
The objectives of this study:
1. To examine the role the internal audit play in an organization
2. To identify problems hindering effective operations of internal audit in Coca-Cola company
3. To examine the preventive measures to applied by internal auditor in coca-cola company
4. To offer recommendations based on the findings of the study.
1.4 RESEARCH QUESTIONS
This research work proposed to assess the role of internal audit in big companies and to ensure adherence and effectiveness of audit work in big companies. The study would see to provide answers to the following research questions:
i) How does internal audit enhance the effectiveness and efficiency of operations of coca-cola company?
ii) What are the problems that are likely to be encountered by the internal audit in carrying out its duties?
iii) How independent is internal audit in coca-cola company?
iv) What are the problems militating the effective operations of internal audit in coca-cola company?
1.5 SIGNIFICANCE OF THE STUDY
The main significant of this research is that it would enlighten the management on the importance of both internal auditing and internal control. Also people who are not in the system such as those in the academic cycle will have a picture of what internal audit and the role played in coca-cola company and organization.
The management benefits from this work by knowing the actual picture of their Internal Control so as to know whether or not it is reliable. Also, government is not left behind in that when completed the research would undoubtedly identify to the government areas where attention would be greatly placed in order to sanitize the system for better revenue generation.
External auditors also benefits from this research work, this is because internal auditor can assist external auditor in familiarizing himself with the accounting system, and act as a liaison between the external auditor and other members of the client staff.
This study would serve as a reference material to students and researchers who would want to conduct further researches/studies on internal auditors in big companies.
1.6 SCOPE OF THE STUDY
The scope of this research is limited to the area of an evaluation of the role of internal auditors in an organization a case study of coca-cola company, Ibadan, Lagos state Branch. The company is used as the case study. The research tends to highlight the ways in which internal audit is carried out in organization and how the internal audits in itself is. The scope of this research will also focus its attention to the status of the internal auditor, his responsibilities, independence practice as well as the problems encountered in the course of carrying its duties and the possible solutions to the problems. It is hoped that the information gathered will greatly reflect the generality of organization.
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Tags: AN EVALUATION OF THE ROLE OF INTERNAL AUDITORS IN AN ORGANIZATION [A CASE STUDY OF COCA-COLA, IBADAN]
