AUDITING EFFICIENCY AS A TOOL FOR IMPROVING COMPANY’S PERFORMANCE

(A CASE STUDY OF NIGERIAN BREWERIES PLC 9TH MILE ENUGU)

By

MBADA CHINWE JULIET

Presented To

Department of Accountancy

ABSTRACT

Efficiency in auditing provides means of appraising company's performance and diagnosing its ills and weakness.

The researcher conducted a critical study on this topic with the intention of finding out the extent to which the company Nigeria breweries plc. Aba has carried out efficiently appraised and highlighted deficiencies and inefficiencies which are usually believed as not existing and whether the company Nigeria breweries plc, Aba is as efficient as it should be.

The researcher also carried out a study t find out the causes of low company performance and how best to eradicate this annually by applying efficiency in auditing process.

This research work is broken into five chapters. The first chapter gives the general introduction and discussions of the background of the study, statement of the study, objectives of the study, significance of the study, hypothesis testing, scope and definition of terms.

Chapter three deals with research design and methodology. Chapter four deals with data analysis. Chapter five deals with findings, recommendation and conclusion.

The researcher used oral and written data library research which formed part of the secondary data. Based on the above facts, the researcher formulated test hypothesis making use of null hypothesis the company auditing process is not efficient.

Alternative hypothesis-H₁. The company's auditing process is efficient. Lastly attempt made on how best Nigerian breweries plc should be improved by applying efficiency in auditing process by carrying out the following objectives.

General analysis of the company.

Reviewing and appraising the soundness, adequacy and application of accounting and other operational control.

Ascertaining policies, plans and procedures of auditing by the company.

TABLE OF CONTENTS

Title page II

Certification page III

Dedication IV

Acknowledgement V

Abstract VII

CHAPTER ONE

Introduction 1

1.1 Background of the study 1

1.2 Statement of the study 2

1.3 Objectives of the study 2

1.4 Significance of the study 3

1.5 Hypothesis testing 4

1.6 Scope and limitations of the study 4

1.7 Definition of terms 5

CHAPTER TWO

Literature review 8

2.1 historical background of auditing 8

2.2 Historical background of Nigerian breweries plc, Aba purpose of auditing 11

2.3 Purpose of auditing 14

2.4 Selection of auditors 15

2.5 Audit of management 16

2.6 Collection and evaluation of evidence 17

2.7 Evaluation of internal control system 22

2.8 Planning for an auditors 36

2.9 Internal auditors importance 37

2.10 Procedure for efficiency in auditing 39

2.11 Reliance on other auditors 40

2.12 Role of auditing in companies 41

2.13 Preparation of audit report 42

2.14 Reference note 44

CHAPTER THREE

Research and Methodology 45

3.1 Sources of data 45

3.2 Interview question 45

3.3 Methods of investigation 46

3.4 Limitation of the study 48

CHAPTER FOUR

Data analysis 51

4.1 Summary of data analysis 78

CHAPTER FIVE

Findings, recommendation and conclusion 81

5.1 Findings 81

5.2 Recommendation 82

5.3 Conclusion 85

BIBLIOGRAPHY

CHAPTER ONE

INTRODUCTION

This research work is an attempt to study on auditing efficiency as a tool for improving company's performance using Nigerian breweries plc 9 ^th mile as a case study.

Efficiency in auditing provider means of appraising company's performance and it helps to detect the ills and weakness. Auditing as explained by audit operational standards is the independent examination of an enterprise by an appointed auditor in pursuance of that appointed and in compliance with any relevant statutory obligation. With the help of auditing knowledge, the intention is to find out the extent to which the company Nigeria breweries had carried out efficiently appraisal and highlighting deficiency and inefficiency which are usually believed as not existing and whether the company is efficient as it should be correctly. But when the company grows to a greater height, volume of transaction becomes substantial usually with public company. It will need the service of an accountant who is an auditor so as to be able to carry out his job more efficiently.

1.2 STATEMENT OF THE PROBLEM

In developing country like Nigeria, a company whether large, medium or small faces special problem of auditing inefficiency. The problems which includes incomplete recording of accounts, poor attitude to adhere to the accounting standards and guideline coupled with incessant fraud and defalcation have warranted that the techniques of audit should be mastered by accountants. This research work therefore attempts to highlight on these key problems, areas that will undermine auditing efficiency in a company and make suggestion about their possible solutions.

1.3 OBJECTIVES OF THE STUDY

Considering the above, the research work has undertaken to study the auditing efficiency as a tool for improving company performance using Nigerian breweries as the case study. It is intend to find out some of the reasons for deficiencies and inefficiency in the company which is usually believed as not existing. When in fact they started to find out ways to eradicate these abnormalities by the application of efficiency audit.

It is also intended to find out the extent to which management has appraised their own operations and how competent they have been in determining operational weakness and ills.

1.4 SIGNIFICANCE OF THE STUDY

Considering the above aims and objectives, there is the need to inform other users of the company's financial information on the efficiency of audit as the tool for improving company's performance. It helps to prevent fraud because if fraud is detected and prevented on time, the attainment of corporate objective will be much more effectively and efficiently pursued. If the company is efficiently audited, it will help the company to perform efficiently and make it to grow.

1.5 HYPOTHESIS TESTING

In carrying out this study, the researcher intends to test hypothesis are merely anticipated or expected relationships between or among the variables to interest. The hypothesis will be tested and conclusion arrived at the application of;

H₀ the company's auditing process is not efficient.

H₁ the company's auditing process is efficient

H₀ auditing efficiency is not a tool for improving company's performance

H₁ auditing efficiency is a tool for improving company's performance.

1.6 SCOPE AND LIMITATION OF THE STUDY

For the purpose of this research work, the researcher will focus her attention on the auditing efficiency as a tool for improving company's performance using Nigerian breweries plc Enugu as a case study. The concentration on the above named company is as a result of the fact that the research envisaged a possible danger the effectiveness of carrying this research work on a longer scope to embrace all the companies in Nigeria will seriously be hampered by many inevitable factors.

The dearth of research material within the polytechnic community was one o problem encountered by the researcher in the course of work.

Also, to me financial problem was also a constraint to the achievement of what I intent to research on.

1.7 DEFINITION OF TERMS

Auditing: This is a process in which auditors collect and evaluate evidence to ascertain if there is a high degree of relationship between the evidence collected and financial information present by management.

Detection: This is the art of finding or discovering the existence or essence, nature or identification of something.

Defalcation: This is simply misappropriation and embezzlement of money enrolled to one.

Fraud: This is the act of dishonesty, deceit, falsification and manipulations perpetrated to gain undue monetary and non monetary benefits.

Investigation: This is an enquiring commission for come specific purposes stated in his letter of engagement to an investigator.

Management: This constitutes serious members of an organisation who dictate and enforce policies and philosophies of the operations.

Efficiency: Ability to perform duties well producing a designed result.

Tool: Instrument used in doing a certain work.

Improvement: Make better. It is the alternation that adds to the value of anything.

Company: Any seven or more persons in the case of private company or any two or more persons associated for any lawful purpose or incorporation for a joint action especially for business.

Efficiency: Ability to perform duties well and producing a desired result.

References notes

1. "A statement of basic concept" studies in accounting research N0. 6 (sarastitu: American accounting association 1973).

2. Jess stein and Lawrence urdang, the random house dictionary of the English language unabridged edition p. 455

3. Ibid p. 1493

4. Ibid p.717

5. Companies decree 1968 vol. 55 p. A 201.

6. Jess stein and Lawrence urdang, the random house dictionary of the English language unabridged edition p. 1070.

7. Ibid p. 387