THE ROLE OF INTERNAL AUDITING IN SAFEGUARDING ASSET OF ORGANIZATION (A STUDY OF ANCHOR INSURANCE COMPANY UYO)
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CHAPTER ONE
INTRODUCTION
- Background of the Study
In view of dynamic nature of business and economic horizon in recent time in relation of a rapid increase in business environment insurance of a business has become more complex and highly technical to manage, need therefore arise for better way to controlling business operation for a better understanding of general nature, benefit and limitation associated therefore. The main change which sometime give birth to lack of trust of betrayal of confidence even with accountants.
According to Consultative Council of Accounting Bodies (CCAB 2017). Auditing is an independent examination of an expression of opinion in a financial statement of an organization by an appointed accountant.
It should be appreciated that audit is a logical process which involves carrying out a logical procedure design to obtain audit evidences information and examination which provide the basis for drawing conclusion and forming opinion on the financial statement of a company.
Auditing in recent time has more from asset attention to measurement of resources utilization and progress towards progressed considerable factor than its supporting technology.
Internal auditing has no limitation to the examination of financial records, but also the evaluation of the organization compliance to statutory requirement and management policies to establish effectiveness in the management control system and efficiency in operation.
Internal auditing department independently appraised the firm financial activities to audit errors and irregularities, the audit staff determineness whether prescribe policies to uncover wasteful and inefficient transaction (Imdbery and Coin 2012) and also (Walyeenbach, 2018).
Anchor insurance company limited was licensed in October 1989 as a general business (non-life) insurance outfit and started operation in November of the head office at 7/13 Aka Road, Uyo, Akwa Ibom State.
In 2003, new investor acquires substantial part of a company equity as part of privatization programme of the former owner state government.
In 2008, a new management was introduced headed by Mr. Ademayama Adedura as the MD/CEO a seasoned insurance and accounting expert to pilot and reposition the company as 21st century financial service brand. To be the most innovative and preferred general business insurance provider in Nigeria and also institutionalize the Anchor brand as a world class security providing efficient and dynamic insurance service. Anchored on good cooperate governance to meet the expectation of our stakeholders.
1.2 Statement of the Problem
It is widely know fact that the Nigerian business system is still under developed.
Many organizations that make up the system only struggle to maintain status in frame of size and wealth, while a good number were wound up after a few year of operation despite the economic potentials they had. Many type of attire a close study of the causes shows that all the nucleus of its adequacies or weakness in the management and control of resources. Anchor insurances company limited is a firm establish by provision of various insurance services for in all its branches.
Based on the above problem the researcher has decided to embark on the study of appraisal of the effect of internal auditing in safeguarding the asset of an organization. A study of Anchor Insurance Company Limited, Uyo.
1.3 Objectives of the Study
This study focuses mainly on effect of internal auditing in safeguarding the asset a view to:
- To find out the important of internal auditing to management of Anchor Insurance Company.
- To determine how internal auditing helps the management of Anchor Insurances Company in maintaining effective control over asset, expenditure, revenue, liability and general operation.
- To identify if there is any significant difference between internal auditing and other control techniques employed by the company.
- To find out the problem associated with the internal audit of anchor insurance company limited.
- To enable the researcher make recommendations on how to improved upon the internal auditing system of anchor insurance company limited Uyo.
1.4 Research Questions
The study seeks to answer the following questions:
- What are the objectives of setting up internal auditing limit in Anchor Insurance Company Limited, Uyo?
- What are the effects of internal auditing in the management of Anchor Insurance Company?
- Does internal auditing exercise any effective control over asset of the company?
- What is the purpose of the internal auditing in organization hierarchy of the company?
- How competent are the staffs in the internal auditing limited of the company?
1.5 Research Hypotheses
In the study, two sets of hypotheses were formulated:
- Ho: There is no significant relationship between the structure of auditing system and cost of operations in Anchor Insurance Company Limited, Uyo.
- Hi: There is significant relationship between the structure of auditing system and cost of operations in Anchor Insurance Company Limited, Uyo.
- Ho: There is no significant relationship between the cost of maintaining auditing system and profits declared by Anchor Insurance Company Limited, Uyo.
- Hi: There is significant relationship between the cost of maintaining auditing system and profits declared by Anchor Insurance Company Limited, Uyo.
1.6 Significance of the Study
The result of this research will be of immense benefit to various organizations, not just case study be it private or public, business originated or charitable organization. The report will stimulate new thinking and further research work in auditing practice in and institutions.
The work will aids to assessment of internal audit unit performance. The finding and recommendations of the study will assist anchor insurance company limited to develop and improved upon it internal audit unit part from identify other measure of correction and control yet employed in the company.
1.7 Scope of the Study
The scope of this research work is concern with the important of internal auditing to the organization of Anchor Insurance Company Limited, Uyo.
1.8 Limitations of the Study
In view of the learn finance of the researcher associated with high cost of fuel and limited time frame, the researcher could not travel to many validate of the needed materials. Study is limited to anchor Insurance Company Limited, Uyo.
1.9 Definition of terms and Acronym
Auditing: Auditing is an independent examination on a financial statement of an organizational empire in pursuance of the appointment and in compliance with relevant obligatory obligation (Emile Woolf 1986).
Internal Auditing: Internal auditing is an independent appraisal of activity within an organization for the view of the financial operation as a basic of protective and control measure to management (Limibery and Coln 1972).
Internal Control: This comprises the plans of an organization and the coordination methods and measurement adopt with a business to safeguard its asset checks. The accuracy and reliability of it accounting adherence to presented management policies (May 1975). Policies are quid to thinking in decision making. They are plans in general statement or understanding which guide or channel and action in decision on making (Knontz 1976).
Fraud: Fraud mean irregularities arising in cause of normal business transaction to chit another to benefit the perpetration (Emile Woolf, 1986).
Internal Check: This means carrying out routine monitory on transaction by means of one person transaction being complimentary to that of another (Taylor 1974).
Statutory Audit: These audits carried out in alliances with provision of law (Millichany 1987).
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