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CHAPTER ONE

1.0  INTRODUCTION

Auditing is an independent checking, investigation, examination and expression of the books of accounts and vouchers of a business enterprise with a view to enable the appointed auditor to report whether the trading, profit and loss accounts and balance sheet are properly drawn up so as to show a true and fair view of the state of affairs and the profit or loss of the business according to the best information and explanation obtained by the auditor and that they comply with the laid down rules and regulations of the statement of standard accounting product (SSAP) and other statutory regulations.

Internal control system: This can be described according to auditing guideline (AG 204) as of the whole system of controls, financial and otherwise, established by the management in order to carry on the business enterprise in an orderly and efficient manner, ensure adherence of management policies, safeguard its assets and secure as this as possible the completeness and accuracy of records therefore this involves both internal check and audit.
Internal Check: This briefly refers to the method (techniques) of organizing and arranging the entire operation of office, factory and en-housing and the duties of respective staff so that risk of fraud, errors, irregularities and mismanagement will almost be impossible without conclusion. That is day-to-day transactions, segregation of duties and job performance in an organization. 
Internal Audit: This is refers to an independent appraisal of activities within the organization of the check of certain operations as a service to the management, therefore, it is the management control to functions by the means of evaluating and measuring the  efficiency and effectiveness of other controls or checks. Meanwhile, the internal audit will ensure that some specific routine work are carried out by the departments and that the laid down procedures  is adequately carry-out by all applicable areas as well as making recommendations to the management.

1.1 BACKGROUND OF THE STUDY 
Auditing in its daily and primitive stage can in an existence since 16th Century, start when the first relationship began between those who provided capital and those who managed the business. Moreover, the innovation of joint stock companies has enormously widened the possibility of raising capital for industry. As a result of the limited liability of the shareholders, it become possible to offer shares for subscription to the public and thus, the availability of capital to both industry and commerce. Stewardship Meanwhile, under the company from of business enterprises, the shareholders as a person, delegate the management of the enterprise to the board of directors and practically, the board submits to the shareholders the account of the enterprise so that its members may see a true and fair view of the financial position and the profit and loss undertaking. Thus, in 19th century, the greatly arose  a need by the shareholders as a body to appoint an auditor that will help in the presentation of statutory financial statement of the board of directors in order to show true and fair view of the financial position of the company.However, in 20th century, mandatory provision as requirement made for the audit to limited liability accounts and presentation of audit report to numbers by the company acts in Nigeria have company or companies and Allied Matters Act (CAMA) 1990.

1.2 STATEMENT OF THE PROBLEM 
This study is basically concerned with discussing and appraising an assessment of effective internal audit and control in the public sector. And also how to answers some related questions like;
1.   How has the effective internal  audit and control affected the public sector over some years?
2.   How Does the effective system of internal audit control affect management policies towards records keeping, risk of fraud and errors, mismanagement, job functions and proper coordination.
3.   How does the system take care of vouchers, payable, bank reconciliation statement and prevention of over payment as well.

1.3 OBJECTIVES OF THE STUDY
1.   To clearly demonstrate the impact effective internal control and audit in the public sector.
2.   To clearly and effectively specify the adequate control and management mechanisms to put in place in the public sector.
3.   To indicate the performance scope of internal control and audit in the public sector towards quality of financial information, organization's growth, improving it efficiency at the costs lower as possible improvement of social environment.
4.   To clearly explain the system audit general description as to executive a continual analysis of a central authority. And organization's reporting monitoring team thus the management.
5.   To make possible contribution to human knowledge as well as reduction or prevention in management, risk of fraud, irregularities and errors.

1.4 RESEARCH HYPOTHESIS 
The main aim of public sector is for public utility (satisfaction) while internal control and audit is for maintenance and keeping of accurate, complete and valid financial records and transaction daily as well as safeguard of assets in order to prevent and eliminate errors and fraud. Therefore public sector, particularly corporate affairs commission (CAMA) meanwhile, the following hypothesis will be tested in the course of the study.
Null Hypothesis (Ho): the accuracy, completeness and validity of financial records and maintenance, safeguard and custody of assets of an organization as well as the elimination and prevention of fraud, errors, irregularities and mismanagement do not tally with the efficiency and effectiveness of effective internal audit and control in the public sector. 
Positive Hypothesis (H1): The accuracy, completeness and validity of financial records and maintenance, safeguard and custody of assets of an enterprise as well as the elimination and prevention of fraud, errors, irregularities and mismanagement do not tally with the efficiency and effectiveness of effective internal audit and control in the public sector.

1.5 SIGNIFICANCE OF THE STUDY 
The significance of this research study is to fish out the efficiency and usefulness of strict adherence of the effective internal control and audit towards public sector in Nigeria as it affect.
1.   The effective management policies towards the maintenance, safeguard and custody of assets in public sector.
2.   The strict management policies towards day to day transactions (activities), records as the salaries and wages of the commission in order to prevent and eliminate the risk of fraud errors, irregularities and mismanagement in the public sector and otherwise.
3.   The need to facilitate government interest towards the getting-up public sector or corporation (enterprises) without being panicky of fraud, errors, irregularities and mismanagement in the public enterprises.
1.6 SCOPE OF THE STUDY 
The study is an assessment of effective internal audit and control using corporate attain commission Kaduna branch as case study. The study restricted itself to the internal control and audit of the commission. Therefore, it is based on the examinations and investigation of internal control system and  audit procedure in order to ascertain the efficiency and effectiveness of management policies towards fraud, error, irregularities and mismanagement prevention throughout the year.Meanwhile, the control on the assurance of monitoring the registration fees, daily records and transactions, salaries and wages that is the emolument of the employees as well as the maintenance, safeguard and custody of assets of the commission.
1.7  HISTORICAL BACKGROUND OF THE CASE-STUDY 
The corporate affairs commission (CAC) was established and incorporated in Nigeria by section 1. of CAMA 1990 as a acronym of companies and  Allied matters act 19090 to replaced the former company registry. Before this Act, the company registry was part of the ministry of trade and commerce. Experience showed that this arrangement was not effective since adequate time and funds were not directed towards an essential area of the nation is economy like company formation, registration, management and administration.Moreover, the commission was established as a corporate body, with perpetual succession and a common seal, capable name and acquiring, holding and disposal of all movable and immovable for the purpose of its function.Meanwhile, the commission has its headquarters in Abuja the federal capital territory (FCT) and branches or subsidiaries spread all over the federation according to section 1 (3) of CAMA 1990. The decentralization of power no doubt reduces the hardship an expense of reaching the former company registry under the former frame work.
1.8 DEFINITION OF TERMS 
Planning: this is the process of thinning before activating. It is the most basic management function, which involves selection from among alternative future worse of action in order to achieve a desirable goal. Therefore, it is the function to determine where we are and where we are intended to be in accomplishing the organizational goal.
Policy: this is the general statement or understanding as laid down principles, norms, ethics and guidelines and channel thinking in decision making in an  organization towards its target goal. 
Organization: this is defined according to Henry Foyol as providing a business with everything necessary or useful to its functions e.g. raw materials, tools, equipment, money and men.
Management: It can be defined is the efficient and effective utilization of human, social, political, economic and material resources for the accomplish of the set of goal in the organization.
Responsibility: This is an act of exercising authority or influence to see that duties are performed.Control: It is the ability of management to induce subordinates to work towards group goal with confidence and kindness.
Accounting: is the etc of recording, classifying, selecting, analyzing, interpreting and communicating the financial transactions of an organization to induce or enable users to make financial assessment and decision.
Audit: It is an independent examination and expression of opinion on the financial statement of organization by an appointed auditor in accordance to the terms of his engagement and in compliance with any relevant statutory obligation and profession requirements.Examination: this means going into study of a particular idea information and fuel in order to get the real thing in all.
 Independency: This means having five mind or liberty (freedom) in exercising one's right without interference from outside. Therefore, according to professional or accounting profession, it means attitude of mind which is characterized by integrity and objectivity.

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