When effectively managed, internal auditing becomes an important element in helping an organization achieve its objectives. The study aimed to investigate the effectiveness of internal audit in enhancing public accountability of the Fire and Rescue Force departments using the case of the Fire and Rescue Force department and find out challenges facing effectiveness in audit functions. The study was conducted using different data collection methods including interview, questionnaires, and secondary data collection. Most of the respondents were from Accounting and Audit functions sections in Fire and Rescue Force department. The results of this study revealed that audit functions units in the Fire and Rescue Force department are effective; their effectiveness was due to several factors; including the independence of internal auditors, roles of the audit committee, and resources to internal auditors, due care, training and promotion. These factors positively affect the effectiveness of the audit functions unit; as a result, they make audit functions practice to be effective within the institution. It was recommended that; strengthening the independence of internal auditors, improvement of Audit committee functions and compositions, improving communication right of Internal auditors, increasing resources to internal auditors, improving access of information, and complying with International Professional Practice Framework by IIA. It is further recommended that the implementation should not be limited to removing the audit functions function under the Accounting Officer but rather implementing it in a way that enables the creation of a well-structured and effective Audit functions service capable of delivering high quality of service to the Nigeria Public sectors.

1.1. Background and Introduction
The current auditing practice started developing from the 19th century when auditing came into existence as a separate legal entity. Auditing is categorized into either internal or external auditing based on circumstances into which it is undertaken. Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. Internal auditing is a catalyst for improving an organization's governance, risk management and management controls by providing insight and recommendations based on analyses and assessments of data and business processes.

With a commitment to integrity and accountability, internal auditing provides value to governing bodies and senior management as an objective source of independent advice. Professionals called audit functions are employed by organizations to perform the internal auditing assignments (Wood et al, 2012). The effectiveness of audit functions department is empirical in any endeavor to accomplish a unique task; the objective of the effectiveness of audit functions function can have a positive impact on the control of the environment of an organization and the effective design and operation of internal control. Audit functions effectively has a dual reporting relationship, where the head of the audit functions report to Audit Committee for assistance in established direction, and administrative matters and to the audit committee for strategic plan direction, reinforcement, and accountability.

The audit committee therefore also has a role to play in ensuring the effectiveness of external audit function, it should ensure that audit functions has a direct line of communication with and the support of the committee. Audit functions is, therefore, the use and application of knowledge, skills, tools, and mathematic techniques to audit activities to meet audit requirements. The inability to complete the established audit functions effectively is an area of overwhelming concern audit management. Audit functions effectiveness helps an organization accomplish its objectives by bringing a systematic disciplined approach to evaluate and improve the effectiveness of risk management control and governance processes.

The Internal auditing profession evolved steadily with the progress of management science after World War II. It is conceptually similar in many ways to financial auditing by public accounting firms, quality assurance and banking compliance activities. While some of the audit technique underlying internal auditing is derived from management consulting and public accounting professions, the theory of internal auditing was conceived primarily by Lawrence Sawyer (1911-2002), often referred to as "the father of modern internal auditing", and the current philosophy, theory and practice of modern internal auditing as defined by the International Professional Practices Framework (IPPF) of the Institute of Internal auditors owes much to Sawyer's vision.

With the implementation in the United States of the Sarbanes-Oxley Act of 2002, the profession's exposure and the value were enhanced, as many internal auditors possessed the skills required to help companies meet the requirements of the law. However, the focus by audit functions departments of publicly-traded companies on SOX related financial policy and procedures derailed progress made by the profession in the late 20th century toward Larry Sawyer's vision for audit functions. Beginning in about 2010, the IIA once again began advocating for the broader role internal auditing should play in the corporate arena, in keeping with the IPPF's philosophy.

Historically, During British Colonialism and soon before the independence of Tanganyika, the National Audit Office was called “the Audit Department”. It was part of the British Overseas Audit Services based in London, England. The head of this office was called the Director of Audit as per the Audit Ordinance cap 86 that was governing audit activities since 1957. The daily audit activities of the Audit Department were governed by Colonial Regulations and General Instructions and Rules of the Overseas Audit Department in London. The office had only one office located in Oyo at Kivukoni Front Street. It was auditing the accounts of the whole government as the Government management system was centralized (NAOT, 2012).

The first branch to be opened in the country was Arusha Audit Branch; the main audited of this branch was the Tanganyika Custodian of the Enemy Property Department based in Arusha. This department was established by the British colony following the defeat of Germany colonialists in Tanganyika during the First World War. After the end of the First World War, all homes, estates, businesses and infrastructures belonging to the Germans were abandoned. In 1919 when Britain became the new colonial master of Tanganyika Territory it established this Department to manage the properties which formerly belonged to the Germans.

The Office continued to expand itself, whereby in 1959 it had four stations Oyo being the headquarter and three upcountry stations which were Mwanza, Tanga and Arusha. On the 1st July 1961, four months and eight days before the independence of Tanganyika, the Exchequer and Audit Ordinance of 1961 came into force. This law changed the name of the Audit Department to the Exchequer and Audit Department. The Ordinance changed the name of the head of the Audit Department to become the Controller and Auditor General (CAG). The mandate of the CAG was enshrined under Article 73 of the Constitution of Tanganyika that came into force immediately before the 9th December 1961.

The main duties of the CAG and his offices were Controllership and Auditing; whereby the Controllership duty was exclusively the CAG’s duty. These duties were further expounded in the Exchequer and Audit Ordinance of 1961. In 1962 the Republican Constitution of Tanganyika was adopted. This marked the beginning of the Presidential system of government whereby the Presidential powers as head of state and the government that were previously the powers of Governor-General and the Prime Minister in the former constitution were merged. The power to appoint the Controller and Auditor General was vested into the President. On 9th July 1965, the Interim Constitution of Nigeria was enacted and came into force. This constitution was further followed by the Constitution of the United Republic of Nigeria of 1977 which is the current Constitution. All these constitutions provided for the mandate, responsibilities and independence of the CAG.

In 2001, following the growth of the country’s economy and the need for further control of the use of public moneys, the Exchequer and Audit Ordinance, 1961 was repealed by the Public Finance Act, No. 6 of 2001 (revised 2004) which continued to expound more on the functions, responsibilities and powers of the CAG. This law changed the name Exchequer and Audit Department to the present National Audit Office of Nigeria. To suit the current development in auditing, Nigeria decided to enact the Public Audit Act, No. 11 of 2008. This law governs the operations of the National Audit Office. Among major issues introduced by this law includes tenure of the CAG retirement age of the CAG, widening the scope of the audit, adoption of International Auditing Standards, financial independence, and appointment of External Auditor of the National Audit Office.

Generally, audit functions means unbiased and systematic appraisal function, performed within the business organization, with the purpose of reviewing the day to day activities of the business and providing necessary suggestions for the improvement. Specifically, audit functions performs a wide spectrum of activities including evaluating the accounting and internal control system, examining the routine operational activities, physical verification of inventory at regular intervals, analyzing financial and non-financial information of the Organization, and detection of frauds and errors (Surbhi S, 2015).

External audit, on the other hand, is a periodic, systematic and independent examination of the financial statements of the company conducted by a third party for specific purposes, as required by statute is known as External Audit. The main aim of external audit is to publicly express an opinion on the truthfulness and fairness of the financial statement of the company, the accounting records are complete in all respects and prepared as per the policies outlined by GAAP (Generally Accepted Accounting Principles) or not, disclosure of material facts in the annual accounts.

For carrying out an external audit, the auditor is appointed by the members of the company. S/he should be independent, i.e. he should not be connected to the organization in any way so that he can work in an impartial way without any influence. The auditor has the right to access books of accounts to obtain necessary information and provide his opinion to the members by way of the audit report. This study shall, however, focus on internal auditing in enhancing public accountability using the case of Fire and Rescue force under the Ministry of Home Affair.

1.2. Statement of the Research Problem
Over the years the demand for both external and internal auditing has been sought to respond the need to have some means of independent verification to reduce record-keeping errors, asset misappropriation and fraud within the business and non-business organizations. The roots of auditing, in general, are intuitively described by accounting historian Richard Brown (1905, quoted in Mautz and Sharaf, 1961). Reduction of error in financial processes and quality control is essential for the success and effectiveness of public accountability in any organization. External auditors provide unbiased opinions and a comment on public accountability processes in the organization with the internal auditor provides the in-house guidance for the finance department to be able to maintain the level of quality processes and remain effective.

However, Arthur E states that the accountant and the internal auditor use many of the same techniques that often lead to a mistaken assumption that there is little difference in the work or in ultimate objectives. The internal auditor, like any auditor, is concerned with the investigation of the validity of representations, but in his case the representations with which he is concerned to cover a much wider range and has to do with many matters where the relationship to the accounts is often somewhat remote. The process of succession planning has always been taking place where employees with potential were identified and being developed into second-generation leaders. Necessity created internal auditing and is making it an integral part of modern business. No large business can escape it. If they haven’t got it now, they will have to have it sooner or later, and, if events keep developing as they do at present, they will have to have it sooner (Arthur E. et al, 1944).

In recent years, researchers and practitioners have widely discussed the need for internal auditors of adding more value to their companies’ operations and contributing to the achievement of corporate objectives. This new perspective has focused increasing attention on issues such as performance evaluation and effectiveness of internal auditing for instance (Dittenhofer, 2001: Bou-Raad, 2000). Since the internal auditor has numerous activities and duties in the organization that may be beyond public accountability but still play an essential role in public accountability and other financial control areas in the organization.

A significant disconnect in understanding exists today is on how the effectiveness of internal auditing can enhance public accountability of the especially public institutions in developing countries specifically in the East African region. Thus, this study will investigate the direct effects that an effective internal auditor through performance of their duties can enhance the public accountability of a public organization by using the case study of the Nigeria Ministry of Home Affair, Fire and Rescue Force.

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Item Type: Project Material  |  Size: 61 pages  |  Chapters: 1-5
Format: MS Word  |  Delivery: Within 30Mins.


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