Project Abstract

Project Overview

<p> </p><p><b>INTRODUCTION</b></p><p><b>1.1 &nbsp; &nbsp; &nbsp; Background of the<br>Study</b></p><p>The dynamic nature of business environment growth and<br>increasing complexity of business has made it imperative for management to seek<br>for more avenues of control, which has resulted internal audit which serves as<br>a control measure in both public and private sector.</p><p>It is now rare indeed to find an enterprise of any size<br>which does not have an internal auditing function. In many cases internal has<br>eclipse other management services to become efficiency, effectiveness and<br>economy. The need for internal auditing in business organization cannot<br>be ruled out.</p><p>As business expands and the level of transaction increases<br>there had been cases of frauds, misappropriation of cash and other<br>irregularities, which if not checked will obviously not be interested of the<br>organization, that is why internal auditing must be introduced in every form of<br>business organization be it large or small to check such irregularities.</p><p>Internal audit functions are performed by employees of<br>organizations functioning in a staff capacity and reporting to a high level<br>officer in the organization.</p><p>Internal audit is essentially an appraisal activity within<br>organization for the review of accounting, financial and other operation as a<br>basis for services to management.</p><p>Auditing is the examination of certain statement covering<br>the company’s business transactions over a period of time and the financial<br>position of an organization on a certain date in order that true auditor may<br>issue a report on them. They also make sure that the final statement is true<br>and fairly viewed. There are more involved definition, such as that issued by<br>the consultative council of the accountancy bodies (CCAB). This body defined<br>auditing as “The independent examination of an expression of opinion on the<br>financial statement of an enterprise by an appointed auditor in pursuance of<br>that appointment and in compliance with any relevant statutory obligation”.</p><p>The statement adds that the responsibility for the<br>preparation of the financial statement and the presentation of the information<br>included in rests with the management of the enterprise (in the case of a<br>company the director).</p><p>The auditor responsibility is to report on the financial<br>statement as presented by the management. The auditor’s duties do not require<br>him specifically to search for fraud unless require by the statute or on the<br>specific terms of his engagement. However, the auditor should recognize the<br>possibility of material irregularities or fraud which could unless adequately<br>be disclosed or state of affairs shown by the financial statement.</p><p>Auditor therefore examines the financial transaction to test<br>they are in compliance with the generally acceptable accounting principles and<br>that of the financial statement are true and fair.</p><p>Setting up an internal audit department to a large extent<br>help in ensuring that operational activities comply with management policies<br>and other related standards. These will give no room for any form of<br>irregularities. &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; </p><p>Setting up an internal audit department to a large extent<br>help in ensuring that operational activities comply with management policies<br>and other related standards. These will give no room for any form of<br>irregularities. The basis of this study is to inform organizations on the<br>necessity of internal auditing and how it can be properly implemented.</p><p><b>1.2 &nbsp; &nbsp; &nbsp; Statement of the<br>Problems</b></p><p>Inspite of the existence of internal audit department/section<br>in business organization, it is often argued that the rate of fraud in the<br>organization of the economy is still on the increase.</p><p>By delaying payment vouchers, some people argue that the<br>internal auditors are creating more problems than they are solving. Others even<br>see internal auditors as mere tools to witch-hunt and therefore see them as<br>unnecessary evils. An attempt would be made in this study to properly educate<br>other operational managers (who see internal auditors as constituting a<br>nuisance to them) on the proper functioning of internal audit department. The<br>wrong impression held by non audit staff will be eliminate, that internal<br>auditors are merely to detect fraud and therefore must not be concerned with<br>their normal operations.</p><p>The research questions therefore are in the problem of this<br>research work which is restricted to the following: does internal auditing play<br>a role in accomplishing true and fair presentation of statement of profit and<br>loss account and balance sheet? Does internal auditing enhance internal control<br>leading to efficient running of enterprise?</p><p><b>1.3 &nbsp; &nbsp; &nbsp; Objectives of the<br>Study</b></p><p>The objective of the study is to determine the benefit that<br>could accrue to business organization through auditing with specific reference<br>to Hamdala Hotel Kaduna.</p><p>The study will further bring into highlight the importance<br>attached to the auditing system adopted by business organization whether it<br>satisfied their present and future needs.</p><p>It will also show whether the limited liability companies<br>are among the beneficiaries of auditing system.</p><p><b>1.4 &nbsp; &nbsp; &nbsp; Research Hypothesis</b></p><p>This sub-chapter has an important attribute in any research<br>work. In order to come out with a meaningful conclusion at the end of the<br>research works, the researcher postulates the following hypothesis:</p><p>1. H1:<br>&nbsp; &nbsp; That auditing is effective and efficient in business<br>organization.</p><p>H0: &nbsp; &nbsp; That auditing is not effective<br>and efficient in business organization.</p><p>1. H1: &nbsp;<br>That auditing eradicate total fraudulent act in the business organization i.e.<br>auditing represents tool for controlling frauds on resources in an<br>organization.</p><p>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<br>H0: &nbsp; &nbsp; That auditing does not eradicate total fraudulent<br>act in the business organization i.e. auditing does not represent a tool for<br>controlling frauds in resources in an organization.</p><p>Infact, the researcher is concerned with the examination of<br>empirical evidence to test the efficiency of this hypothesis to examine the<br>evaluation and also use of auditing in business organization. It is hope that<br>by the end of the exercise the writer should be able to outline the importance<br>of auditing in business organization.</p><p><b>1.5 &nbsp; &nbsp; &nbsp; Significance of the<br>Study</b></p><p>The major significance of the study is to enlighten the<br>public on the need to adopt the usefulness of auditing in business<br>organization. Business organization are facing serious problem due to lack on<br>internal auditing. If more attention is given to it, it will contribute greatly<br>towards the development of the organization as a whole. It is significant to<br>study the importance of auditing in business organization in Nigeria and by so<br>doing it gives management a better insight as to know how to operate with the<br>auditors in order to make the objective of the organization or company.</p><p>To the management/directors, the benefit from this system<br>will help in terms of internal control and the prevention of fraud that may<br>occur in the organization. It would also show the importance attached to<br>audited account made by auditors to the management and external users is<br>financially sound and having met up with the requirements of the information.</p><p>As the organization /company continues to exist and make<br>profit, management will now know that auditing is good in term of financial<br>statement given by the auditor that the account is true and fair.</p><p>In addition, it widen the knowledge of the researcher, in<br>the course of study and other researchers can go through it for further<br>knowledge of gathering relevant facts.</p><p><b>1.6 &nbsp; &nbsp; &nbsp; Scope of the Study</b></p><p>Judging from the fact that auditing has contribute in measurable<br>to organization in enhancing their efficiency, productivity as well as<br>profitability. The study is focused on the following as an acid test of<br>auditing relevance to organization and company: examining the existing auditing<br>in the organization; method of appointing removal and remuneration of auditors<br>as well as the operation of internal control in Hamdala Hotel, Kaduna.</p><p><b>1.7 &nbsp; &nbsp; &nbsp; Historical<br>Background of the Case Study (Hamdala Hotel, Kaduna)</b></p><p>Hamdala Hotel Kaduna is one of the international Hotels,<br>which is solely owned by the New Nigeria Development Company Limited (NNDC). It<br>is managed by Arewa Hotel Limited, which also manages a number of other hotels.</p><p>As the oldest hotels in Northern Nigeria, it was officially<br>opened in January, 4th 1961, by the late Sir. Ahmadu Bellow then Sardauna of<br>Sokoto, Premier of Northern Nigeria. It was commissioned to promote tourism and<br>provide up to date services in Kaduna and the neighboring states.</p><p>The decision to construct such on ultra modern international<br>hotel in Kaduna was to provide standard accommodation and catering service for<br>other government functionaries on official visit to Kaduna.</p><p>Being the first international hotel in Kaduna the one<br>hundred and ninety four bedroom hotel has been playing an important role in<br>solving accommodation problems for both government and the private companies<br>who may like to accommodate their visitors by giving them accommodation for<br>brief period. The hotel is widely recognized.</p><p>Handala hotel is located along Mohammed Buhari way and it is<br>opposite Murtala Muhammed square polo field and the Kaduna club among others.</p><p>The Hotel is made up of six (6) departments and cursory look<br>into the several organization and chart shorts that it consists of the<br>following departments:</p><ul><li>Food<br>and beverages department</li><li>Accounts<br>department</li><li>Personnel<br>department</li><li>Front<br>office department</li><li>Maintenance<br>department</li></ul><p>At the top of the organizational chart is the chief<br>executive with the rank of managing director, who is responsible for the smooth<br>running of the affairs of the hotel. Next to him is the general manager then<br>the departmental managers, like housekeeping. The house keeping department is<br>in charge of keeping the surrounding clean and keeping the rooms tidy ready for<br>a quest check in.</p><p>The food and beverages, the chief is in charge of kitchens<br>affairs and these are other mangers assisting the food and beverages because of<br>the sub-section under 17, example, banqueting handed by the banquet managers<br>and other important department as mentioned above.</p><p>Hamdala hotel has contributed in one small measures to the<br>development of business more especially in the times of seminars, launching,<br>rather, symposium, training, end of the year parties, wedding reception and<br>many more people comes from far and near to share common views for the purpose<br>of business transaction and individual needs. Many organization also use the<br>hotel for holding meetings and even launching of new products and for with<br>worthwhile activities that have impact on the society.</p><p><b>1.8 &nbsp; &nbsp; &nbsp; Definition of Terms</b></p><ul><li><b>Fictitious<br>Account: </b>They are account that does not exist. There are the<br>types that stolen money is usually lodged.</li><li><b>Irregularities:</b><br>This can be defined as the act of doing something in such a way that gives<br>against the usual way.</li><li><b>Forgery:</b><br>According to the website dictionary forgery is the falsification or<br>counterfeiting which involve the making of false document writing knowing<br>it to be false and with the interest that is acted upon as genuine.</li><li><b>Audit</b>:<br>Accounting to Webster business dictionary is an examination of accounting<br>document and of supporting evidence for the purpose of reaching propriety<br>fairness, consistency and conformity with accepted principles.</li><li><b>Internal<br>audit</b>: This refers to the institutionalized examination of<br>accounting procedures with an organization.</li><li><b>Financial<br>regulation</b>: these are rules, regulations and guideline governing<br>financial transition. </li></ul> <br><p></p>