THE PERFORMANCE OF AN AUDITOR AND AUDITING IN NIGERIA ECONOMY (A CASE STUDY OF UNION BANK)

ABSTRACT

The aim of this research work is to discuss an appraisal of an Auditor and Auditing in Nigeria Economy with reference to Union Bank of Nigeria Limited.

Chapter one deals with introduction of the study, Historical background of the study, Statement of the problem, purpose of the study.

Chapter two, literature review of the historical background of an Audit inspection department in the Banking industry and it objectives.

Chapter three dealt with research method, of an Appraisal of an Auditor as a vital management tool in the banking industry.

Chapter four looked at the findings and repossess of the respondent in terms of table and percentage.

Chapter five dealt with; summary, finding, conclusion and Recommendation

TABLE OF CONTENTS

CHAPTER ONE

1.0     Introduction                                                                             

1.1     Introduction                                                                             

1.2     Purpose of the Study                                                                

1.3     The duties performed and the Extent of independence of the audit (Inspection Department)                                        

1.4.    Brief History of Union Bank of Nigeria Limited               

1. 5    Research Question                                                          

1.6     Scope and Limitation of the study                                 

CHAPTER TWO

2.0     Literature Reviews                                     

2.1     Historical Background of an Auditor                               

2.2     The objective responsibilities and Duties of an auditor

2.3     Relationship between the Internal and External Auditor 

2.4     Advantages and Disadvantages of an Auditor               

2.5     Functions of Inspection Department with Respect to Union Bank of Nigeria Limited                                               

2.6     Perception of the various units and people being audited.                                                                         

CHAPTER THREE

3.0     Research Methodology  

3.1     Introduction                           

3.2     Personal Observation                       

3.3     Oral Interview                                   

3.4     Sampling Techniques             

3.5     Distribution of questionnaire           

3.6     Administrative      of Questionnaire  

CHAPTER FOUR

4.0     Data Analysis and Interpretation     

4.1     Introduction                                     

4.2     Sex of Respondents                          

4.3     Marital Status                         

4.4     Educational qualifications                          

4.5     Branches of the Respondents

4.6     Workers Experience                                             

CHAPTER FIVE

5.0     Summary, Conclusions and Recommendations  

5.1     Summary and Findings

5.2     Conclusion                                                                             

5.3     Recommendations                  

Bibliography

Questionnaire

CHAPTER ONE

INTRODUCTION

1.1   INTRODUCTION

An auditor of the evidence may describe an audit as an examination from which final revenue accounts and balance sheet of an organization have been prepared. In order to ascertain that they present a true and fair view of the summarized transaction for the period under review and of the financial state of the organization at the end date this enable the auditor to report their on.

Therefore an auditor which is part of internal control assists all level of management of the Union bank of Nigeria limited (or any organization) of in performing periodic accounting and administrative procedures and other activities of the organization, including identifying possible means of resources.

Improving the efficiency and economy of operations and use of resources the unit independent of all other department within the bank is direct responsible to the managing director of chief executive. In carrying out assignments, the head and as appropriate, members of the audits state have unrestricted access to all Union banks records, document and personal relative to the subject under review.

1.2   PURPOSE OF THE STUDIES

The objectives of this study are to determine and evaluate:

  • The functions performed by the audit (inspection) department of Union bank of Nigeria limited and how these fairly with the management's needs and requirement.
  • The perception of the various departments and the state of the departments being audited.
  • The contribution by the audit (inspection) departments towards the overall objective of Union bank of Nigeria limited.

The management of an organization has the primary responsibility of running the business efficiently and effectively. This is achieved by the installation of a good audit control line the organizational setup. The controls include physical as well as administrative techniques. An auditor is an importance aspect of those controls the effectiveness and competencies of the inspection department limited are functions of the following:

  1. The Caliber (qualification, experience and maturity) of state in the department.

B.    Nature of the duties, performed and the extent of their independent.

C.    The objective of their report.

The audit (inspection) department contributes as great deal to the development of Union bank of Nigeria limited. It is therefore very important that the person should be capable of understanding and interpreting the system in operation its effectiveness can be measure in term of the extent of which fraud and error are controlled and minimized and the level of compliance with the management policies and gaudiness.

With reference to Union bank of Nigeria Limited, on which the research is based, the inspection unit is a big department of about 150 staff strength most of whom are of high integrity and matured these qualities are manifested in the inspection report issued by the department.

1.3   THE DUTIES PERFORMED AND THE EXTENT OF AUDIT (INSPECTION) INDEPENDENT OF THE DEPARTMENT

The duties of the inspection department are to:

(a)    Review and verify that the policy of Union Bank of Nigeria Limited are carried out properly and consistently all department.

(b)    Review and verify that all department proceed user are carried out consistently and in a satisfactory manner.

(c)    Review and verify the soundness, and equacy and application of System procedures and interval controls, including computer, installations and recommend and improvement where necessary.

(d)    Review and determine the extension, which the bank's assets are accounted for and safe guarded from loses of all kinds.

Ensure that there is an adequate and effective system of controls over loans and overdrafts.

(f)     Review capital and administration expenditure of the Bank and Propose possible savings or more effective use of expenditure incurred.

(g)    Visit branches in order to verify the correct application of the Bank's policies and accuracy of accounting and records and ensure the effective utilization of Bank's resources.

(h)    Provide a source of qualified staff to assist other departments if and when required to do so, enter by advising on system or by supplying personnel.

The inspection department is being treated with respect and given free hand to operate. The degree of independence allows the department to discharge its duty accordingly.

The activities performed by the inspection department are perceived by the management as worthwhile because they are described as the "Watch Dog" of the organization.

Hence, the degree of reliance on the reports issued by the department by management is very high. Management views their reports as an essential measure in correcting the lapses within the organization.

On the other hand, the various departments and the staff being audited sometimes perceived the inspection department as a unit that is out to victimize, as such, in most cases the degree of cooperation is very especially with the middle and junior staff cadres.

However, with different perception of the inspection department in the bank, the department still contributed to the realization of individual departments objectives through recommendations contained in their reports to management. The implementation of this recommendation leads to improvement in the bank.

BRIEF HISTORY OF UNION BANK OF NIGERIA LIMITED

The colonial Bank was granted in 1916 to operate in Nigeria. It first office was opened in Lagos in 1917 and subsequently expended into the up-country where it established offices in Jos, Kano and Port Harcourt.

In 1925, Barclays Bank concluded an agreement with the well-known Colonial Bank and result gave birth to the Barclays bank (Nigeria Limited). It continued under the name until March 12, 1979 when the name Union Bank of Nigeria Limited was adopted.

The federal government now owns substantial par to the equity share capital of the bank amounting to 5.67% whilst Nigeria shareholders have equity holding of 28.33%, Barclays Bank International holds an equity of 20% and loans policy has also been carried into the management this the executive management of the Bank is now finally in the hands of Nigeria.

1.3.1        ORGANIZATION STRUCTURE

The Bank is divided into four divisions for ease of control and monitoring of performance. These administrative divisions are administration and services operations - Lagos district, operations up country and finance and planning each of these divisions are handed by an executive director who is directly responsible to this managing director. The managing director is the chief executive and also an ex­-officio member of the board of directors, in the bank. In view of his load of responsibilities a special assistant is aiding him.

Major policies are established and important decisions are taking by the executive committee but where necessary they are referred to the board of director for ramification. The committee comprises the managing director, the executive director; all the assistant general managers, the chief inspector and the advance controllers policies and decision which are passed down the line for implementation include advances, representation, business development capital and recurrent expenditure, remune rations and services conduction's and appointment of staff to mention a few.

Four official are directly responsible to the executive director (administration and services). They are the assistant general managers, local (company secretary/Legal adviser). Assistant general manager premises, the assistant general manager (Staff) who takes charge of all staff matters and finally the general manager's assistant, administration.

The executive director operation (Lagos) has an assistant general manager (Lagos) reporting to him and same applies to the executive director, up country operations.

The advances controllers, however, reports directly to the managing director and other executive directors depending on the issue at stake. The work of the chief inspector and assistant general manager, financial and planning are coordinated by the executive director for financial and planning.

Under the head officer general management there are ten area offices each of which is headed by the area management his responsibility is to ensure that executive decisions are carried out in his area. They have authorities over their areas and can make basic decisions regarding staff and their movements and others daily operations within the area. Where the need arises they are responsible to their line assistant general manager be it for Lagos or up country.

The branches, 204 in numbers are headed by branch managers who are responsible for the daily running of their branches and maintenance of staff under them.

1.3.2        OPERATIONS

Following the acquisition of majority shares of equity capital of the bank by the federal government of Nigeria attempts are being made to make loans investment and other management policies of the bank comfort with borrowing requirements of the Nigeria Economy.

The banks see up in 1917 a business advisory service to assist company in improving the management and financial control of their businesses.

Profit wise, the bank has shown continuous and steady growth as could be seen from the computation form the annual report (1984 - 1986).

MEASURE OF GROWTH (N 000S)

DEPOSIT

1984

1985

1986

DEPOSITS

3,381,994

3,380,453

3,400,249

SHAREHOLDERS

173,497

206,882

299,715

LOANS&ADVANCE

1,678,444

1,676,191

2,142,694

INVESTMENT

3,214,000

5,469,000

5,469.00

QUOTED&UNQUOTED

PROFITABLE TAX

57,078

81,153

103,777

EARNING PER SHARE

53k

76k

99k

STAFF STRENGTH

10,737

10,078

9,826

1.4   RESEARCH QUESTIONS

i.     What are the functions of the inspections department?

ii.    How often does the staff of the inspection department visit your branch per annum?

iii.   Is the visit of the inspection department useful to the branch? iv. Does their review of your branch work cover all the operation of the branch?

  1. What is your opinion of the inspection reports? VI. Is the inspection department adequately staffed?

vii. Does the inspection department undertake investigation only when there is suspicious?

viii. Is there any possibility of collusion between the inspection department staff and any member of staff?

1.5   SCOPE AND LIMITATION OF STUDY

1.5.1 There are about fifty- four (54) banks in Nigeria. Out of these banks there are thirty-six (36) commercial banks, thirteen (13) Merchant banks and five (5) development banks the study was restricted to union bank of Nigeria Limited which is one of the largest there commercial banks in Nigeria.

1.5.2 LIMITATION

The greatest obstacle of this study is the ignorance of a change number of staff of union bank of Nigeria Limited about the purposes of research work, as a result many of the staff members were unwilling to assist while a good number had to be persuaded to answer oral questions. It is hoped that as time goes by bankers will become aware of the purpose of research projects and be ready to render assistance to the researcher.

1.6   SIGNIFICANT OF STUDY

It is hoped that this study, will be of importance to students (of Accounting, Banking and Finance) staff and management of union bank of Nigeria Limited in particular and the Banking profession and the union bank of Nigeria Limited shareholders the students are made to be aware of the important role being played by an auditor in the banking profession by instilling financial discipline in both management and staff.

The study will make staff and management of Union Bank of Nigeria Limited to be alert to their responsibilities and accept the fact that the auditor (inspection) department’s functions are independent and objective appraisals of the work performed by all sections of the bank so as to reduce wastage, curtail fraud as well as introduce better and modem system to assist both staff and management in the better performance of their duties.

The banking profession is kept by consistent checks carried out by the inspection department, which sometimes detects fraudulent practices, which promptly reported to the managing director who thereafter takes appropriate steps to rid the bank of dishonest staff members.

Furthermore, through the study, shareholders of the bank are assured that there is a "watch dog" department, which is all out to ensure that there is adequate and effective control over all the operation of the bank.

.

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How To Write Chapter Three Of Your Research Project (Research Methodology)

  • Methodology In Research Paper


    Chapter three of the research project or the research methodology is another significant part of the research project writing. In developing the chapter three of the research project, you state the purpose of research, research method you wish to adopt, the instruments to be used, where you will collect your data, types of data collection, and how you collected it.

    This chapter explains the different methods to be used in the research project. Here you mention the procedures and strategies you will employ in the study such as research design, study design in research, research area (area of the study), the population of the study, etc. You also tell the reader your research design methods, why you chose a particular method, method of analysis, how you planned to analyze your data.

    Your methodology should be written in a simple language such that other researchers can follow the method and arrive at the same conclusion or findings.

    You can choose a survey design when you want to survey a particular location or behavior by administering instruments such as structured questionnaires, interviews, or experimental; if you intend manipulating some variables.

    The purpose of chapter three (research methodology) is to give an experienced investigator enough information to replicate the study. Some supervisors do not understand this and require students to write what is in effect, a textbook.

    A research design is used to structure the research and to show how all of the major parts of the research project, including the sample, measures, and methods of assignment, work together to address the central research questions in the study. The chapter three should begin with a paragraph reiterating the purpose of research. It is very important that before choosing design methods try and ask yourself the following questions: Will I generate enough information that will help me to solve the research problem by adopting this method?

    Method vs Methodology

    I think the most appropriate in methods versus methodology is to think in terms of their inter-connectedness and relationship between both. You should not beging thinking so much about research methods without thinking of developing a research methodology.

    Metodologia or methodology is the consideration of your research objectives and the most effective method and approach to meet those objectives. That is to say that methodology in research paper is the first step in planning a research project work.

    Design Methodology: Methodological Approach

    Example of methodology in research paper, you are attempting to identify the influence of personality on a road accident, you may wish to look at different personality types, you may also look at accident records from the FRSC, you may also wish to look at the personality of drivers that are accident victims, once you adopt this method, you are already doing a survey, and that becomes your metodologia or methodology.

    Your methodology should aim to provide you with the information to allow you to come to some conclusions about the personalities that are susceptible to a road accident or those personality types that are likely to have a road accident.

    The following subjects may or may not be in the order required by a particular institution of higher education, but all of the subjects constitute a defensible in metodologia or methodology chapter.

    Click here to complete this article - How To Write Chapter Three Of Your Research Project (Research Methodology)

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