IMPACT OF AUDITING IN PUBLIC SECTOR ACCOUNTABILITY

(Accounting)

IMPACT OF AUDITING IN PUBLIC SECTOR ACCOUNTABILITY (USING EDO STATE AS A CASE STUDY)
ABSTRACT

    The study examined amongst other things the efficiency of public sector audit, the adequacy of audit at enhancing accountability and the relevance of accountability to promoting public sector operation. This study was carried out in line with existing statutory and professional requirements. Data were gathered through questionnaires administered to the staff of the Bursary Department, University of Benin, together with the interview of some senior staff of the department. Cross tabulations, percentages and chi-square were used to analyze the data. The study revealed that the audit system is inefficient due to management interference and other factors. But it was revealed that public sector audit enhances accountability and that accountability promotes public sector operations.     Based on the findings, an effective audit system free from interference is needed. There is also the need for upgrading the skills of auditing personnel and also the call for improvement in the work environment through the use of computer.
TABLE OF CONTENT
CHAPTER ONE: INTRODUCTION
Background to the Study    
Statement of the Research Problem    
The Relevant Research Questions
The Research Objectives    
The Research Hypotheses     
Scope of  the  Study
Relevance and Significance of the Study    
CHAPTER TWO: LITERATURE REVIEW
2.0    Introduction    
2.1.0    The Public Sector    
2.1.1    Legal Backing    
2.1.2    Structure of the Public Sector
2.1.3    Performance of the Public Sector
2.1.4    Public Sector Reforms    
2.1.5    Civil Service Reforms    
2.1.6    Organisation of the Public Sector    
2.1.7    Role of the Public Sector    
2.2.0    Audit    
2.2.1    Conceptual Framework for Public Sector Audit        
2.2.2    Areas of Public Sector Audit                    
2.2.3    The Audit Arrangement                    
2.3.0    Accountability                            
2.3.1    Principles of Accountability    
2.3.2    Types of accountability        
2.3.3    Contemporary Evolution                        
2.3.4    Criteria for Public Service Accountability            
2.3.5    Concept of Accountability                        
CHAPTER THREE: METHODOLOGY
Introduction                            
The Population and Sample                    
Data Collection Method                            
Sources of Data                                
The Research Instrument                        
Data Analysis Method                        
Limitation of the Study        
CHAPTER FOUR:    DATA PRESENTATION AND ANALYSIS
4.0    Introduction                            
4.1.0    Respondents Characteristics and Classification            
4.2.0    Presentations and Analysis of Data According to
Test Hypotheses                                
4.3.0    Analysis of other Data                            
4.4.0    Interview Analysis                        
CHAPTER FIVE:    SUMMARY,  RECOMMENDATION AND CONCLUSION
5.0    Introduction                                
5.1    Summary of the Findings                    
5.2    Discussion of the Findings                    
Policy Recommendations                        
Recommendations for future Research            
Conclusion                                
Bibliography                            
Appendix A                                    
Appendix B                                        

CHAPTER ONE
INTRODUCTION
BACKGROUND TO THE STUDY
    Public sector audit has experienced considerable expansion throughout the world. The reason for this is closely related to changes in the structure of government and concern for more accountable and transparent governance,  which has resulted in a large increase in the number of accounts and sophistication of financial reporting. The growth of the public sector calls for proper accounts or record keeping and according to Johnson (1992), the nature of public sector accounting is quite different from that adopted by the private sector. This difference can be in the  area of objectives, sources of revenue and bases of recording of accounts, responsibility and accountability among others. Accountability or rendering of accounts is traditionally concerned about ensuring effective and efficient use of state resources (Odesomi, 1992).
    Accountability is sometimes described as an account-giving relationship between individual, e.g. “A” is accountable to “B” when A is obliged to inform B about A’s (past or future) actions and decisions; to justify them and to suffer punishment in the case of misconduct.
    Accountability cannot exist without proper accounting practices, in other words absence of accounting means absence of accountability. And accountability focuses on the ability to account for the allocation, use and control of public expenditure and resources in accordance with legally accepted standards.
    Public sector audit applies to almost every public sector body and is relatively wide-ranging. It involves the certification of accounts of public sector entities. Pubic sector audit has a key role in safe-guarding public money, ensuring  proper accountability, upholding proper standards of conduct in public services, and helping services achieve value for money. The public has a legitimate interest in public sector audit and the standards and guidelines applied by Auditors as the public sector is financed by tax, charges and fines.
    With increasing democratization and concern about corruption, people are demanding to be informed about what their Government intends to achieve and what  it has actually accomplished. Proper audit has a distinct role in promoting accountability and ensuring the best use of public money by providing credibility to the information reported by or obtained from management through objectively acquiring and evaluating supporting evidence. And according to the Association of Certified Chartered Accountant (ACCA, 2009), the annual accounts (including the audit report are only one way in which the management of the authority demonstrates its proper stewardship of public assets to the legislature and ultimately to the electorates.
    In Nigeria, the appointment, authority and duties of the Auditor-General are described in sections 85 and 86 of the 1999 constitution. The Auditor General or any person authorized by him is to audit, without directions or control of any other authority, the accounts of the federation of all offices, the courts and all federation authorities, including persons and bodies established by law and entrusted with the collection and administration of public monies and assets. He shall have access to the books, records and other documents relating to the accounts, he is required to submit the audit report to each Houses of the National Assembly for consideration by the Public account Committee (PAC). It should however, be noted that members of the National Assembly are responsible for holding the government accountable for its actions. The role of the Auditor-General is to provide them with independent, fact-based and reliable information and assurance as to help them do their job. The Auditor-General does not comment on government policy nor judge whether programme are delivering value for money or whether policy choices are appropriate. That is parliament’s job. Rather, He tells parliamentarians how well government programmes are being run and whether they are achieving their intended results.
    However, owing to changing technology and increasing demand for good governance, transparency and accountability in the public sector, it is important to revise auditing practices to assess their adequacy. reliability, efficiency and effectiveness in promoting accountability in the public sector.
STATEMENT OF THE RESEARCH PROBLEM
    The major issues of audit and accountability in the public sector includes: The inability of the public sector to produce an effective audit system. There is the general believe that audit system on ground is not adequate. Lord  (2002), identified poor internal control measures as the reason for ineffective audit in the public sector.
    Also, research has  not been able to show whether public sector audit enhances accountability. There is a knowledge gap in this regard.
    Lastly, the collective effect of audit and accountability on the public sector operations is one that is yet to be established.
    However, the below are the research questions;
The pertinent research questions relevant to the study are:
a.    Is the general approach to public sector audit efficient?
b.    Does public sector audit enhance accountability?
c.    Does audit and accountability have any effect on public sector operations?
THE RESEARCH OBJECTIVES
    The research objectives refer to what the study seeks to achieve, and these include:
To examine the audit system in the public sector so as to be able to comment on its efficiency and effectiveness.
To ascertain the adequacy of audit at enhancing accountability of the public sector
To find out whether audit and accountability affects public sector operations.
THE RESEARCH HYPOTHESES
    Baridam (1990), defines hypothesis as “statement that express the relationship between independent and dependent variables. And according to Horby (2008), it is an “idea or explanation of something that is based on a few known facts but that has not yet proved to be true or correct.
    The working hypotheses are as follows:
Hypothesis I
H0: The audit system of the public sector is not efficient.
H1: The audit system of the public sector is efficient.
Hypothesis II
H0: Public sector audit does not enhance accountability.
H1: Public sector audit enhances accountability
Hypothesis III
H0:     Audit and accountability does not impact on public sector operations.
H1:     Audit and accountability impact on public sector operations.
SCOPE OF THE STUDY
    The study is restricted to the public sector with the Bursary Department of the University of Benin as the point of focus.
1.6    RELEVANCE AND SIGNIFICANCE OF THE STUDY
    The study is hoped to correct the flaws or misconceptions about public sector audit and accountability. The study would improve on the audit system prevailing in the public sector by suggestions ways of improving on them.
    Lastly, the study would contribute to the existing literature on public sector audit and accountability, thereby, serving as a reference point.

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