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This study explored the internal audit functions and productivity in Uyo Local Government Council. The study set to find out the extent the auditing unit of the Uyo local government council has so far functioned. Then, to what extent has the internal audit unit been assessed in terms of its financial tract records. The design survey method was adopted for this study. The population of the study was 98. Then, the study’s sample which was determined from the study’s population through the Taro Yamani (1964) statistical tool was 82. In analyzing the obtained data the researcher adopted the simple percentage and statistical tools. In testing the hypotheses, the researcher used the Chi-square. Findings revealed that auditing was effectively done in the internal audit unit of Uyo local government council. Secondly, the internal audit unit of Uyo Local government council was not subjected to regular scrutiny. Lastly, the internal unit of Uyo Local government council was not equipped with enough digital machines to effect and ascertain the internal auditing. Based on these findings, the study recommended that the internal audit unit of Uyo Local government council be checked on routine basis, secondly, digital machines and modern ICT equipments for saving data be provided to the audit unit of Uyo Local government council. Also auditing personnel be trained on routine basis.




Cover page

Title page

Certification      –        –        –        –        –        –        –        –        ii

Dedication         –        –        –        –        –        –        –        –        iii

Acknowledgement              –        –        –        –        –        –        iv

Abstract    –        –        –        –        –        –        –        –        –        vi

Table of contents        –        –        –        –        –        –        –        vii


1.1     Background to the study    –        –        –        –        –        1

1.2     Statement of the problem  –        –        –        –        –        3

1.3     Objective of the study        –        –        –        –        –        4

1.4     Research Question     –        –        –        –        –        –        5

1.5     Research Hypotheses                   –        –        –        –        –        6

1.6     Significance of the study    –        –        –        –        –        7

1.7     Scope of the Study     –        –        –        –        –        –        9

1.8     Limitation of the study      –        –        –        –        –        9

1.9     Definition of terms used in the study –        –        –        10


2.1     Introduction      –        –        –        –        –        –        –        15

2.2     Auditing in the present age        –        –        –        –        15

2.3     Features of internal Audit –        –        –        –        –        17

2.4     Relationship between internal auditing and

Internal control –        –        –        –        –        –        –        19

2.5     Distinction between internal audit and

External audit   –        –        –        –        –        –        –        22

2.6     Quality of Staff and staff strength of

internal audit department –        –        –        –        –        23

2.7     Problem affecting internal control/audit     –        –        24

2.8     Common approaches to internal audit        –        –        24

2.9     Function and Productivity of internal audit-        –        26

2.10   Responsibilities of internal auditor     –        –        –        27

2.11   Internal Auditor approaches in achievement of the

Goals                   –        –        –        –        –        –        –        29



3.1     Introduction      –        –        –        –        –        –        –        30

3.2     Area of the study       –        –        –        –        –        –        31

3.3     Population of the study      –        –        –        –        –        31

3.4     Sample size and sampling technique –        –        –        32

3.5     Description of research instrument    –        –        –        32

3.6     Validity and reliability of the instrument    –        –        33

3.7     Method of data collection  –        –        –        –        –        34

3.8     Method of data analysis     –        –        –        –        –        35



4.1     Introduction      —       –        –        –        –        –        –        36

4.2     Data presentation and analysis  –        –        –        –        36

4.3     Testing of Hypotheses       –        –        –        –        –        43

4.4     Interpretation of Data        –        –        –        –        –        48



5.1     Introduction      –        –        –        –        –        –        –        51

5.2     Summary  –        –        –        –        –        –        –        –        51

5.3     Conclusion        –        –        –        –        –        –        –        52

5.4     Recommendations     –        –        –        –        –        –        53

References         –        –        –        –        –        –        –        –        55

Appendices       –        –        –        –        –        –        –        58




1.1 Background to the Study

The industrialization and dynamism of modern administration has created a vacuum to be filled by qualified and competent auditors. Our country Nigeria has a large number of Local Government Areas with an established internal audit unit in operation.  Therefore, carrying out a research on the local government council is essential since the project work intend to achieve by consideration the function and productivity of the internal audit system in Uyo Local Government Council of Akwa Ibom State, Nigeria.

Auditing is a system that links management and the actual field of administration (Onu-chukwu, 1985). Internal audit is an independent function of auditing records, appraising the procedures and organization of a business and reviewing the effectiveness financial stability of the system of the internal checks with the aim of establishing a systematic disciplined approach that will aid in the evaluation of and improvement of the effectiveness of risk management, control and governance processes. Primarily, the internal audit function is to provide independent assurance over the internal controls and risk management of the Local Government council.

The system of internal check, audit or control in force in any undertaking is very important to the internal auditor because his task is to satisfy himself that the system is kept up to an efficient standard and also keep the system abreast of changes as are required. Onu-chuku (1985), described internal control as an independent appraised function established within an organization to examine and evaluate its activities as a service to the organization.

Internal audit is concerned with the liability and adequacy of the accounting system through reliability and integrity of financial and operations information, effectiveness and efficiency of operation and material usage, compliance with laws, regulations, policies and procedures, adequacy and effectiveness of risk management frame work. The productivity of the internal audit system has to do with the extent to which the internal audit function has assessed and affected the administrative activity of the council.


1.2     Statement of the Problem

It is important to note that auditing is an exercise done in order to verify the accounting procedures undertaken by the audit bureau of Uyo Local Government council as the one obtainable in Uyo Local Government Council. Productivity can only be seen if a Local Government Council is well audited against financial misappropriation. In addition, auditing brings about sanity in an establishment. However, Uyo Local Government Council has been audited but a pertinent question arises: has the council been audited on regular or routine basis? If done are there accountability misappropriations discovered in the course of verification?

This study therefore wants to find to what extent the internal audit of Uyo Local Government Council been audited externally?

1.3     Objectives of the Study

  1. To find out whether the internal audit of Uyo Local government Council is still functioning.
  2. To appraise the contributions of the internal audit of Uyo Local Government Council toward the staff productivity.
  3. To find out to which extent the internal audit unit of Uyo Local Government Council has been checked.
  4. To identify the problems associated with the internal audit of Uyo Local Government Council.

1.4     Research Questions

The research questions formulated were:

  1. What is the current functional status of Uyo Local Government Council?
  2. How could we appraise the contributions of the internal audit unit of Uyo Local Government Council toward the staff productivity?
  3. What extent the internal audit unit of Uyo Local Government Council has been checked?
  4. What are the problems associated with the internal audit unit of Uyo Local Government Council?

1.5     Research Hypothesis

Research hypotheses were formulated in null and alternative statements.

Ho:   There is no significant relationship between internal audit function and productivity in Local Government Council.

H1:    There is significant relationship between internal audit function and productivity in Local Government Council.

Ho:   There is no significant relationship between internet audit function and detection of error and fraud in Uyo Local Government Council.

H2:    There is significant relationship between internal audit function and productivity in Local Government Council.

1.6     Significance of the Study

It may seem unbelievable to discover that many citizen of this country still lack of fundamental idea or knowledge of internal audit function and productivity. It is therefore the aim of this study to examine internal audit function and productivity. This study will enlighten the public on how to ascertain the concept of internal audit function and productivity in the company. The study will also provide critical information to government, companies at all level in their effort in managing internal auditors. However, the study will act as source of reference for further researches on this subject.

Specifically, the research will provide useful and meaningful insight into weakness in the current internal audit in the oil company and provide useful information for making changes in the implementation of audit function. The research will serve as a fuel of new reasoning and further research work in audit practice in the organization. The impact of the study on both accounting and auditing theory practice and standards could be tremendous. It is agreed by the researcher that the study shall be of immense benefits to the accounting students of higher institution, management of Uyo Local Government council and seasoned professional Accountants.

1.7     Scope of the Study

This study is intended to internal audit function and productivity in the. Local Government Areas using Uyo Local Government Council.

1.8     Limitation of the Study

  1. Staff Reluctance: In most cases the staff of the used study often feels reluctance over providing required information required by the researcher. This result in finding information where the structured questionnaires could not point out.
  2. Researcher’s Commitment: The researcher, being of full time student spent most of her time on other academic activities such as test, class work, assignment, examination etc which takes average focus from this study.
  3. Inadequate Materials: Scarcity of material is also another hindrance. The researcher finds it difficult to long hands in several required material which could contribute immensely to the success of this research work.
  4. Means of Transportation: At times, means of transportation in the geographically zone (Uyo) always delayed the researcher from meeting up with the personnel of the used study at their scheduled period of time.

1.9     Definition of Terms used in the Study      

To enable readers and researchers have clear insight of this work terms are defined below:

Internal Audit: Is described as an independent objective assurance and consulting activity designed to add value and improve organizations operations. It helps an organization to accomplish its objectives by bringing a systematic disciplined approach to evaluate and improve the effectiveness of risk management control and governance processes.

According to Spice Pegier (1978), Audit may be seen as examination of the accounting books and vouchers of a business or other organization that will enable the auditor to report that in this opinion the balance sheet is properly drawn up so as to give a true and Fairview to the profit or loss for the financial period. Based on the meaningful information and explanation given to him and as shown by the book and if not to report in what respects is he not satisfied.

Accounting System: Royal Linlbery and Chon (1972) hold that accounting system is the total structure of record and procedures which discover record, classify and report information or on the financial position of a government unit or any funds balance account of a group and organizational components.

Chartered Accountant: Is a member of an institute of Chartered accountant. In Nigeria, the admission to such institute is dependent upon seeming a period of apprenticeship and passing an entrance examination.

Independent Auditor: This is a person who is independent of the governmental unit or agency where accounts are being audited.

Auditing Procedures: According to R. Glymme Williams (1974). He defined auditing procedures as acts to perform during the course of an examination. Auditing procedures are based on professional judgment applicable in the circumstances.

Audit technique: R. Glymm Williams (1974) defined audit technique as a method or details procedures essentials to express or execution in an art of science technique and procedures are classed related.

Auditing Standards: These are measuring devices or models to which the audit must perform.

Auditing: the Institute of Chartered Accountant in England and Wales defined auditing as

the independent examination and investigation of the books, accounts and vouchers of a business with a view of enabling the auditor to report whether the balance sheet and profit and loss account are properly drawn up so as to show a true and fair view of the state of affairs and the profit and loss of the business according to the best of the information and explanation obtained by the auditor”.

Productivity: According to Mali (2006) productivity is defined as the measure of how well resources are brought together in organization and utilized for accomplishing a set of results. Productivity is reaching the highest level of performance with the least expenditure of resources. It is the effective user of the factors of production to produce goods and services that means productivity is the output resulting from a given resources input in a given time.

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