THE ROLE OF AUDITING IN ENSURING ORGANIZATIONAL EFFECTIVENESS
Corporate performance management is the area of business intelligence involved with monitoring and managing an organizations performance such as revenue, returns in investment, overhead, operational cort etc. Price Walter house Cooper (2012) noted that it provides the avenue for translating a company’s strategy into measurable targets, in monitoring and evaluating how the company is doing. Corporate performance management gives management, investors, and other stakeholders a real time picture of how the organization is actually in line with its corporate targets so that corporate actions can be taken where necessary.
Margaret (2011) pointed out that it encompasses strategic planning, budgeting, forecasting, work fork, reporting, modeling, scenario planning, profitability analysis, key performance indicate monitoring and consolidation as it addresses both financial and generating activities of the business entity.
The key performance indicators according to Massey (2011), means the company’s progress as they relate to its goals and strategy and are usually enshrined in the financial statement of such companies. Harper (2012) and institute of centered accountant of Nigeria (2009) defined the financial statement as a formal record of the financial activities of a business, person or other entities; relevant information about the reporting entity are presented therein the financial statement and in a structured and easily understandable manner, having the following components.
The very essence of financial statement is deeply routed in the companies and Allied matters Act (2004:5331) which states that “every company shall keep proper accounting record and such records shall be sufficient to show and explain the transactions of the company and shall be such to:
Information emaciating from the financial statements are so vital that it helps a wide range of users such as shareholders, government, financial institutions, employees, creditors/suppliers, media, the general public etc. in making economic decisions.
Kleinschmidt (2007) pointed out that the very fact that ownership of companies differ from management, their trust is not enough to guarantee the accuracy of such financial statements prepared by management as they emphasized tend to conceal the following:
On account of the above challenges, the need for an independent appraisal of the state of affairs in any company cannot be over emphasized. Little Wonder Paul (2009) was quoted to say that “an audit can be compared to an annual checkup with the doctors, the auditor being the doctor while the company is the patient” in the same vein, section 359(1) of the companies and Allied Matters Act (2004) mandated and the need for auditing of companies individuals and on government accounts to guarantee a reasonable level assurance that the financial statement are true and fair, represent state of affairs at the company. This, Okezie (2008) pointed out helps to reduce or settle disputes that might otherwise arise regarding acceptance of the annual reports and accounts of companies.
In the lights of the foregoing, the researcher shall examine auditing, not just as a concept but also as an exercise, with a view to determining its place as the backbone of organizational effectiveness.
STATEMENT OF THE PROBLEM
Modern-day organizations are increasingly facing performance driven challenges that tend to erode the confidence placed on the financial statements prepared by management of these companies (Bamidele, 2009).
In charting the course for other scholars, Okozie (2008) frowned at the problems trailing the absence of auditing which, when unattended to, could hamper the quality, form, disclosure requirements of financial statements. These are;
Wikipedia (2012) posited that auditing as a vital part of accounting which provides an assessment of a company’s internal control, seeks not only to solve the above mentioned challenges but also to provide an assurance that financial statements are of the highest quality which would impact on the effectiveness of such reporting entity.
OBJECTIVE OF STUDY
The following are the key objectives the researcher proposes the study / research to active.
Asika (2001) defined research questions as the set of questions which the research hopes in mind that the study would give answers to this research work shall answer the following questions:
STATEMENT OF HYPOTHESIS
Ho: Auditing can not truly evaluate company’s internal control system
Hi: Auditing can truly evaluate company’s internal control system.
Ho: Auditing would not ensure a reduction (if not elimination) of fraud, embezzlement of funds and materials misstatement in company’s annual reports.
H1: Auditing would ensure a reduction (if not elimination) of fraud, embezzlement of funds and material misstatement in company’s annual reports.
Ho: Auditing cannot improve the investment potentials of companies.
H1: Auditing can improve the investment potentials of companies.
Ho: Auditing is not the backbone of organizational effectiveness
H1: Auditing is the backbone of organizational effectiveness.
SCOPE OF THE STUDY
The thrust of this project work on the role auditing plays in ensuring organizational effectiveness. The researcher demonstrated this by critically x-raying the conditions necessitating the adaption of auditing in firms. The data primary data was constrained to specially designed questionnaires, administered to employees of;
The secondary data utilized were textbooks online resources, journals etc.
It is imperative to note here in that the research id constrained to Asaba Metropolis of Delta State, Nigeria and shall base its assessment of 5 years operations of the companies so selected.
SIGNIFICANCE OF THE STUDY
The research is expected to make reasonable impact in the following areas.
LIMITATION OF THE STUDY
These are the apparent difficulties experienced by the researcher which tend to water down the overall quality of the study: these are;
ORGANIZATION OF THE STUDY
The project works cover 5 distinct chapters, in line with approved format of the faculty of management sciences.
Chapter one introduces the project work at hard, this chapter gives the audience a quick run down of what to expect in other chapters of the project.
Chapter two review relevant literatures surrounding auditing in order to enrich the researcher’s work.
Chapter three projects the research methodology adopted by the researcher in a bid to collect, analyze, interpret and prevent data.
Chapter four analyses the data collected usually an agreed data analysis method.
Chapter five concludes the study by giving discussion of findings, recommendation as well as areas of future studies.
The researcher, under this chapter, has taken an in-depth review of the concept “with a view to establishing its importance in organizations, conditions warranting its introduction into the scheme of workings of modern day companies to achieve the crucial objectives of the study, important research questions were asked, hypothesis stated etc.
In essence, the chapter under review gives the audience a quick, though comprehensive, sketch of the project work.THE ROLE OF AUDITING IN ENSURING ORGANIZATIONAL EFFECTIVENESS