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THE EFFECT OF AUDIT CONTROL IN CURBING CORRUPTION IN THE PUBLIC SECTOR

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  • Chapters:5
  • Pages:65
  • Format:Microsoft Word
(Public Administration Project Topics & Materials)

THE EFFECT OF AUDIT CONTROL IN CURBING CORRUPTION IN THE PUBLIC SECTOR

(A CASE STUDY OF SELECTED PARASTATALS IN NIGER STATE)

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

There are a number of reasons for focusing on the scope and effect of corruption in the public sector and the difficulties in dealing with it, Nigeria occupies a central place in African as the most populous country, with an estimated population of over 149 million. It is one of the continent’s richest countries and is blessed with a huge diversity of natural resources. It is also characterized by a multiplicity of different ethnics groups. Like many monoculture economies in Africa, its economy is heavily dependent on crude oil. Paradoxically, it is this important natural recourse that sustains corruption in Nigeria. As in many African states, corruption is a malaise that infects the society. Corruption has really been the bane of this country; all hands must be on deck to stop it. Nigeria was grouped as the 2nd most corrupt country in the world. The sequence of the positions above shows little improvement which is not significant for stopping the worry of patriotic Nigerians on the matter. The instinct for corruption normally begins with ungratefulness and greediness. As stated by Malick, (1994:68); “The origin of corruption is that it is influenced by the quest for more material wealth”. According to Bureau for public procurement (BPP: 2008), Nigeria losses 60 kobo to underhand practices out of every N1 (100 kobo) spent by government. The wealth of this nation is being looted by the few privileged individuals known as civil servants and politicians who are busy acquiring their ill—gotten wealth by inflating contract, diverting public assets into personal property etc. Corruption has really ruined our economy in different ways.

According to Akara (1994:12), corruption in all its ramifications in any society is the symptom of the moral decadent that can only be arrested and the society regenerated, if and only if that society itself becomes aware and conscious of its dangerous descent into the abyss of self-extinction.

Corruption has really affected the public sector and spilled to other sectors of the economy such as private businesses and households. In view of the yearly reports Of the Nigerian Deposit Insurance Corporation (NDIC) and the various white papers issued in Plateau State-Nigeria, year-in-year-out, many people are initiated into the different forms of these sharp practice. A recent revelation made by the Plateau State Commission of Enquiry into Financial Activities of government for 1999-2007, the State Board of Internal Revenue generated about N24 billion (approximately $210 million) but less than 25% of the revenue was account for, more than 75% of the revenue is allegedly embezzled.

The issue of corruption in the public sector is perpetrated in a syndicate where both civil servants and political appointees are involved. The study is looking at how audit control can help in curbing corruption n the public sector and indeed the country as a whole.

The Public Sector consists of all organization which control is in the hands of the government and/or its appointed agencies, and whose objective involves the provision of service where profit is not a primary motive.

However, the system of controlling record of financial transaction may be traced back to ancient time, when civilization was still it development stage. Such, checking of records are not actually called audit because it was not in line with professionalism. The modern day audit came into existence because of the development of accounting and accountability.

In the public sector, the history and pattern of corruption is tied to the many loopholes identified in public governance. Why, the public sector is the main point of attraction, with ‘respect to contract awards, procurement and supplies, the public sector controls the nature and scope of corruption which has become so endemic in the public sector that accessing basic government services often requires paying a bribe. In view of this situation, there is need for proper audit control, to ensure that all activities of the public sector are carried out according to their laid down procedures. Practical experiences of Nigerian cases have shown a wide range of gap, existing between public expectation and audit mandates for Nigerian auditors whose traditional effects have emphasized the prevention of corruption in financial transaction in the field rather than detecting and reporting, illegal activities i.e., the concept of query rind return files (QRF) syndrome. Therefore, auditors are expected to take the issue of detections and reporting of corruption as a priority. The fundamental attribute for curbing corruption in Nigeria is to create a society with -conscience; to imbibe such elemental attributes as accountability, transparency, honesty and integrity in their public and private lives. To create awareness on the public employees working in government departments that the citizens are the losing party in any corrupt activity. The auditor may listen to the noise of protests by the public on service delivery and some sort of corruptions. However corruption may remain hidden from auditor if the citizens are colluding with the public functionaries. For instance, in the case of a corrupt den between PHCN workers and customers where .the former re-connects the customer by accepting bribe from him, there is collusion between the two parties. None of them is likely to protest or reveal the deal. Both are benefiting from it. The awarding of procurement contract similarly should be covered by open competitive bidding. As a general rule where some form of discretion exist, the auditor should insist on the development and publication of guidelines based on objective and transparent criteria for using the discretion by decision makers.

1.2 STATEMENT OF THE PROBLEM

Corruption and other financial and economic crimes are the bane of Nigerian development efforts. Corruption bestrides the lives of the citizen. The judgment of transparency international is a reflection of what the nation has given to the world -419, money laundering, inflated contracts, scan mails, illegal oil bunkering, disappearance of ships fraudulent financial practices, misappropriation of assets, manipulation of the figures reported in the financial statement have been the order of the day. Bribery and corruption are regarded as norm in almost every sector that authorities no longer frown at them (Okeye and Ani 2004). All these crimes harm Nigerian public sector in no small measure. Ribadu (2004) state that all these corrupt practices continued in system in spite of Government’s landscape steps to address them, because many people in power want the old dispensation to continue, he reiterated that there are those whose lives thrive on corruption, while there are those even though they are paid to check the activities of the culprits, yet are willing to share in the proceeds with the event that they themselves become culprits Waziri (2009) stated that corruption afflicts virtually all parts of the Nigeria value system and is now threatening to spread to the culture as public adulation for wealth increased, the society no longer asks questions as to how people came by their questionable wealth. In its 2004 report on worldwide corrupt practices, transparency international survey covered 146 countries, which rate; Nigeria as the third most corrupt country.

The long years of military rule had entrenched corruption in Nigeria, almost becoming institutionalized. Corruption reached its Zenith during the reign of General Abacha who was acknowledged to have stolen between 4 and billion USD between 1994 and 1998, suppressing all records of state thriving within such a short period. Law and order collapsed and the rule of law took a back seat and impunity. All law enforcement and other watchdog institutions were so compromised that the now served the needs of the corrupt than those of the society they were set up for.

Akomaye (2007) retreated bold steps taken to address the problem like the expression of strong political will at the highest level. Late president Umaru Musa Yar’Adua and his Vice President Publicity declared their assets upon assumption of office. That anti-corruption programme must not be approached in an adhoc manner but addressed as part of a national economic reform programme. This was addressed under its National Economic Empowerment and Development Strategy (NEEDS). Appropriate legislation was enacted to criminalize all corrupt conducts including unjust enrichment, provision for in term restraints, budget monitoring and implementation, tackling income and expenditure, restoring public confidence. Special or designation courts/ judges were instituted to expeditiously try corrupt cases. Key institution like independence corrupt practices commission (ICPC), Economic and Financial Crime Commission (EFCC) were established to fight corruption.

However, despite intense efforts to stamp out corruption, in public sector organization, it appears that corruption in its various forms is problem that is increasing in frequency and serenity.

Therefore, this study is to ascertain the effects of Audit Control on Curbing Corruption in Public Sector Organization.

1.3 OBJECTIVE OF THE STUDY

The main objective of this study is to evaluate the effects of audit control on curbing corruption in the public sector. To achieve the main objective, the following specific objectives are pursued.

1.       To determine the capability of audit control to detect and prevent the incidence of corruption in public sector organizations.

2.       To determine the effect of audit control on budget monitoring and implementation in public organizations.

3.       To ascertain the role of audit control in tackling income and expenditure in the public organizations.

4.       To ascertain the possibilities of restoring public confidence in the public sector through audit control.

1.4 RESEARCH QUESTIONS

1.       What are the capabilities of Audit Control to detect and prevent the incidence of corruption in public sector organizations?

2.       To what extent does Audit Control contribute to proper monitoring and implementation of budgets in the public organizations?

3.       What Audit Control mechanisms are capable of tracking income and expenditure in the public organizations?

4.       What are -those audit control measures that could be taken to restore public confidence in public organization?

1.5 RESEARCH HYPOTHESES

1.       There is no significant effect of audit control on detecting and preventing the incidence of corruption in public organization.

2.       The audit control has no significant effect on budget monitoring and implementation in the public organization.

3.       Audit controls do not have significant effect on tracking income and expenditure in the public organization.

4.       There is no audit control measure that could be taken to restore public confidence in the public sector.

1.6 SIGNIFICANCE OF THE STUDY

The study shall be of importance to the sector, aimed at improving the general performance in audit control practice and also government services. The study will also assist investors in benefiting from sound financial reporting that shows the correct and true statement of affairs. The study will educate the Accountants, Auditors, Financial analyst, Stock brokers, Shareholders, Bankers, and Valuers from corrupt free financial statement reporting. Finally, audit control on financial reporting will be sound and users of financial statement will have confidence on the financial reporting.

1.7 SCOPE OF THE STUDY

The scope of this study is the public sector organization with emphasis on audit control and its effect on selected government parastatals in Niger State, Nigeria. Such as Power Holding Company of Nigeria (PHCN), Niger State Ministry of Finance, Ministry of Health and Board of Internal Revenue Service.

This will enable the researcher to generalize and affirm how effective an audit control can help in curbing corruption in the public sector.

1.8 LIMITATION OF THE STUDY

The study is based on secondary data; the research was limited to the books of accounts and records provided by the various parastatals questionnaire was also administered to employees especially the senior staff in various departments. The major limitation to the study is difficulty in getting materials since a great effort; time and money were expended by the researcher to gain access to information on audit control.

However, in spite of the limitation stated above, the scope chosen for this study will enable the researcher to generate and affirm now effective audit control can help in curbing corruption in the public sector.

THE EFFECT OF AUDIT CONTROL IN CURBING CORRUPTION IN THE PUBLIC SECTOR

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Details

Type Project
Department Public Administration
Project ID PUB0416
Price ₦3,000 ($9)
Chapters 5 Chapters
No of Pages 65 Pages
Format Microsoft Word

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    Details

    Type Project
    Department Public Administration
    Project ID PUB0416
    Price ₦3,000 ($9)
    Chapters 5 Chapters
    No of Pages 65 Pages
    Format Microsoft Word

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