Title page




Table of Content


1.1 Background

1.2 Statement Of The Problem

1.3 Justification For The Study

1.4 Objective Of The Study

1.5 Scope Of The Study

1.6 Limitation Of The Study

1.7 Plan Of The Study

1.8 Definition Of Terms



2.1 Introduction

2.2 The Historical Background Of Auditing

2.3 Qualities Of An Auditor

2.4 Objectives And Function Of Internal Auditing

2.5 Internal Audit Effectiveness Areas

2.6 Duties And Responsibilities Of An Internal Auditing

2.7 Responsibility For Detecting And Prevention

2.8 Internal Audit And Fraud Prevention

2.9 The Roles Of Internal Audit Department In Internal Control

2.10 Internal Control And The Scope Of Audit

2.11 Guideline For Effective Internal Control

2.12 Internal Control And The Auditor

2.13 Relationship Between Internal And External Auditor

2.14 Distinction Between Internal And External Auditor



3.0 Introduction 

3.1 Analysis Of The Personal Data Part (Section A)

3.2 Presentation And Analysis Of Data According To Research Question In Section B Part Of The Questionnaire



4.1 Introduction

4.2 Data Presentation

4.3 Data Analysis

4.4 Data Summary


5.0 Summary

5.1 Conclusion

5.2 Recommendation




Auditing came into existence as a result of demanding for reliable report on the stewardship account that will be present by the management to the wealth provider a third party.

Information is essential to the very existence of the society. The investor making decision to buy or sell securities the Banker decide whether to approve a loan the Government in obtaining revenue based on income tax rapture, are relying on information produced by others. In many of this situation above the goal of the provider of information run directly counter to those of the user. Implicit in this line of reasoning is recognition of the social need for an independent auditor. Individual of professional, competence and integrity who can see the plank to tell us whether the information which we want to rely on constitute a fair picture of what is really going on in an organization.

The passing of the companies act in Britain, introduce by Glad store in 1844 set the scene. It required the registered company’s solvency to creditors similarly the company and allied matter act of 1990 (CAMA) in Nigeria also stated in section 395 (1) that the auditor of a company shall make a report to its member on the accounts examined by them and on all group financial statement copies of which are to be laid before the company in a general meeting during the auditor tenure of office the basic reason for appointing an auditor is just to express an opinion on the financial which he has examined whether it show true and fair situation the growth of auditing recent past has been such phenomenal that management of business assist in the efficient running of the business enterprise.

Phrase like management of auditor committee has surfaced to broaden the significance of work auditors this also resulted in many vita publication on auditing. However this study is an attempt to bring into view the challenging roles that the internal of the business enterprises to a layman the word audit is mainly to detect fraud but it means more than preventing it within the business organization. There are other reasons for having audit work conducted especially the internal audit. Internal audit main function is to assist the management in safeguarding the assets ensuring correctness of financial statement, proper handling of book and records. Internal audit also help to confirm the validity of the transaction that take place in the business and is mainly used by the management but also for the share holder, the inland revenue member of the public and ministerial agencies here it must be clearly stated that the internal auditor serve in an advisory capacity to the management but the management is not duly bound to accept the advice or recommendation. The internal audit work can also aim of providing a basis for up dating of financial and accounting years for up dating of financial and accounting a basis for updating of financial and accounting years thereby building a vivid and healthy accounting department with itself is a check on the excesses of the accounting department staff, as well as other staff e.g. the organization store officers. When people are aware that one time or one day within the accounting year or of all time they may be called upon to explain any ambiguity in the process of records, receipt any fortification or will be discipline, careful and used all their skill in serving the enterprises and make it to utilized the limited available resources. For the owner of wealth to be satisfied the limited available resources for the owners of wealth to be satisfied the limited available resources for the owners of wealth to be satisfied and manager to be justified in establishing and maintaining the integrity potential share holder prospective investor and Government agencies it became necessary to invite an independent person or body who is not involve with either of the parties (management and owners) to examine the steward report. The independent party’s duty is not just more examination of the account from which the financial statement were prepared rather it includes collection all relevant information thought necessary to satisfy him in information of opinion.

Section 30 sub section (3) of the company and allied matter decree 1990 (CAMA).


The main hindrance against the principle of internal and external auditing a non audit officer, some of those problem are highlighted below:

A. The fact external audit work depend to some extent on the internal control system put in place by the organization and the reliability of auditor report depends on the degree of accuracy of the records.

B. Difficulty of an internal auditor to have a reasonable degree to independent in main and attitude due to management influence in their term of references and scope of work.

C. Lack of cooperation which served as an obstacle because in a situation where staff fails to co-operate the internal audit department in gluing reliable reports, it make the work of internal audit department in effective which automatically affect the smoothness of the work of external auditors.


Some researchers have discussed widely and extensively on this topic perhaps because of concept of auditing is of great importance to an enterprise. This present study well focus on enlightenment of the stock of share holder on the advantages of auditing and now of great importance a sound internal auditing department is this work will give the true image of an internal auditor as a sound internal of other staff not as an enemy. Also this research will be of great benefit to any manufacturing company and assist the management of the bottling company Ilorin plant to adequately effectively and efficiently use their resources by means of a sound internal audit.

   Finally, this study will assist fellow colleague who might also share in the priviledge of undergoing a synonymous course or research in the same field of study.


     The main objective of this project work is to examine the impact of internal and external auditing in Nigeria business organization.


The concept of internal and external auditing is very broad one however the research work wills majority focus of the effect of internal and external auditing on organization objective using Nigeria Bottling Company (plc) Ilorin plant and examine the internal control.


   A number of difficulties were encounter during the course of writing this project. Firstly, some of the respondent were reluctant to return the questionnaire given them consider the confidentiality at the completion which almost lead to delay in completion of this work.


   The research work divided into four chapters. One will include the statement of the problem, justification for the study, objective of the study scope of the study and definition of terms. In chapter two a review of the relevant literature on the topic is being carried the rules, definition of both internal and external auditor, objective and function of an internal auditing internal an auditor objective and function of an internal auditing internal audit and fraud prevention guideline for effective internal control, internal control and the auditor, relationship between internal and external auditor chapter three deal with data analysis and presentation analysis of the personal data parts presentation and analysis of data according.

  Chapter four covers conclusion.


To arrive at the essentials of internal and external. The statement constitute true and fair affairs of the company in his opinion and according to the best of the information and explanation obtained by them.

B. Internal Control System:- This is the whole system of control, financial and otherwise established by the management of an organization is an orderly manner to safeguard its asset and secure as for as possible the completeness and accuracy of the records. It ensure adherence to management policies and organization objectives.

C. Financial Statement:- In the specific case and of a limited company, is an annual report and account which include a profit an loss account and balance sheet and also other statement including the director report and statement including the director report and a cash flow statement.

D. Internal Audits:- This is a style of investigation conducted by an employee of a business into any aspect of its affairs. The internal auditor is in most cases accountable to the company management.

E. Business Organization:- According to the random house dictionary business and finance business organization is a company or cooperation (Registered Companies) which is concern purchase, manufacturing or sale of goods and or services in order to make profit auditing, it is highly important to know the definition of some important words incorporated from time to time in this work such term are define below

a. Auditing:- This is the independent examination and investigation of the evidence from which the financial statement has been prepare with a view to enabling the independence examination to report whether the statement constitute true and fair of the company in his opinion and according to the best of the information and explanation obtained by him.

b. Internal control system:- This is the whole system of control, financial and otherwise established by the management of an organization is an orderly manner to safe guard its assets and secure as for as  possible the completeness and accuracy of the records, it ensure adherence to management policies and organization objectives.

c. Financial statement:- In the specific case and of s limited company, is an annual report and account which include a profit and loss account and balance sheet and also other statements including the director report and a cash flow statement.

F. External Audits:- This is a kind of audit conducted into a firm affair by independent auditor i.e. Non member of the organization

G. Business organization:- According to the random house dictionary of business and finance business organization is a company or cooperate (Registered Companies) which is concern with purchase manufacturing or sales of good and or service in order to make profits.




2.1 The main reason behind the auditing concept is provision information in this context auditing can therefore be defined as an independent examination of the expression of opinion on the financial statement of organization of enterprise by a duly appointed person, the audit in accordance with his term of appointment and in compliance with relevant statutory regulation (Kasum 2005).

Reliable information is a fact element in management of a business organization, due to this internal audit has been the need of various business organizations for ensuring effective use of the limited available resources.

The institute of chartered accountants of England and Wales (ICAEW) defined internal Auditing as a review of operating and record, sometime continuous undertaking with a business by specially assigned staff.

Aderibigbe (1984) also gives his definition to internal audit as a series processes and techniques through which an organization own employees ascertain whether established management control are adequate and are effectively maintained and whether record and report reflect actual operation.

Another definition is also given by Ahmed Bello (200) which form the summary of the above definition he state it as independent appraisal activity within an enterprise for the review of operation as a service to management in the work of Kasum (2005) the above definition contains the following fact about internal.

A. Internal auditor is to review and appraise an the organization operation and records.

B. Internal audit is a service to management consequently the scope and objectives depend upon management assessment of what is needed and its willingness to assign the task to the internal audit.

C. Internal audit is an internal function, which means is plan an conducted by employees of an organization.

D. Internal audit is a review and appraisal function which is to be conducted effectively requires a high degree of independent.

Finally, internal auditing is a feature of internal control which function by measuring analyzing, evaluating and criticizing the internal control which have been put in place by the director and other laid down procedures in other to achieve the objective of the organization.



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