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ABSTRACT

The study dealt on the effectiveness of auditing and accountability in the public sector. The rapid development of financial management initiative in public sector and financial control has led to the need for improved performance measurement, reporting and individual accountability. The researcher tested five hypotheses which stability results mat states that. An audited work must be independently examined, opinions must be expressed by a qualified  and appointed auditor in pursuance/compliance with the relevant statutory obligations;  that an auditor must posses the expected qualities the auditor generates office is a watching of  public fund and as such, government must be appropriately configured. Based on this finding the researcher recommended that government should at all level employ professional accountants to ensure that funds are expanded in accordance with the terms by which they are appropriated while auditors should conduct their activity independently in order to protect the interest of the public. Thus, with integrity and in full compliance with the law guiding their profession.

 

 

 

CHAPTER ONE

BACKGROUND OF THE STUDY

1.1    INTRODUCTION

The public sector is a part of the economy whose activities are under the control and direction of the government. These include civil service, statutory corporation and other government – controlled enterprises which provide public utility service. In public sector, accountability and transparency is a collective responsibility but every body cannot be “watch dogs or whistle blowers”. Rather the laws empower certain officers through the executive arm of government to collect all funds due and accruing to the state and disburse them for the purpose for which they are meant.

The responsibility of controlling all financial matters and regulations with regards to government revenue and expenditure is under Ministry of Finance. This Ministry acts as the supervisory ministry to other ministries and parastatals on all financial matters and execution. Its vision include maintaining the required management capacity and institutional framework for effective and efficient application of financial resources in an accountable and transparent manner and to instill due process in government financial transactions to ensure probity, values for money, transparency and accountability in public expenditure (Ministry of Finance, service delivery charter). Therefore, the officers of this ministry owe the public a duty to render a proper account of their stewardship.

However, the officers of the Ministry of Finance have been found to have contributed to the malfunctioning of vision and mission of government by failing to discharge their statutory duties efficiently. Their hidden motives to get rich quickly have forced most of the operator to keep improper records and render falsified statement of accounts. As such for public sector to achieve its motive of serving the public by reporting to them on how funds are received and expended, public officers need to be transparent by carrying out their duties with all amounts of sincerity, honesty and selflessness and strict adherence to laid down rules, regulations, procedures, giving of information freely and clearly (Ntah, 2009).

Public officers, on the other hand, may be found to be insincere, dishonest, selfish and non compliance with the general accepted accounting principles, in such a situation, it was advisable to initiate a means in which public officers must be held accountable for public funds. Auditing was found as a good tool for enhancing accountability in public sector. This can be effective by a continuous and independent appraisal of activities involving the receipts and expenditure of money in order for the auditor to give a prompt report on established cases of malfunctioning to higher authority for immediate actions. In this case, the House of Assembly through the public accounts committee is charged with the responsibility to summon the defaulted officers or person for explanation and sanctions. The defaulted persons may punish by recovering the amount from them, demotion in ranks, surcharge and interdiction of officers.

1.2    STATEMENT OF THE PROBLEM

One of the main objectives of public sector accounting is to make sure that their accounts give evidence of financial accountability. The accounts are expected to explain to the best interest of the general public if funds have been judiciously utilized to serve the interest of the masses. Fraud, embezzlements and misappropriation are negations of the objects, of public financial management.

As a result of the above submission, the researcher attempted to find out the effect of auditing and how it  could be used as a tool for enhancing accountability in Ministry of Finance, Uyo, since the motive of public sector is proper rendition of accounts of receipts and expenditure to the public interest at large.

1.3    OBJECTIVES OF THE STUDY

The broad objectives of this study involve the following:

1. To examine the relationship between auditing, accountability in the public sector
2. To assess the extent of the effects between misapplications of audit report towards management decision
3. To Determine what possible effect could poor allocation of owners resources cause towards organization administration
4. Examine the reason for non-segregation of functional duties
5. Examine if there is significant reason why financial improperly in the public sector should occur

1.4    SIGNIFICANCE OF THE STUDY

The study on impact of auditing for the enhancement of Accountability in Ministry of Finance is very necessary. This result of this study would help Ministry of Finance and Accountant-General office in particular in safeguarding its wealth from waste and fraud. It could also serve as a good source of reference to accounting students and others business students who might consults it for academic purpose. Secondly, it would be useful to all accounting officers in any organisations; be it private or public companies for assessing and evaluating the performance of their functions as regards to accounting system.

1.5    SCOPE/LIMITATIONS OF THE STUDY

The scope of this study was designed to cover audit and enhancement of accountability, audit and enhancement of revenue generating, audit and curbing of extravagant spending. Secondly, it also covered audit and accounting system, checks and balances and lastly, audit and safeguard of public funds from waste, theft, fraud, errors and inefficiency.

However, the study was limited by the following constraints:

1. Financial Constraints:The recent artificial fuel scarcity has caused a sudden increase in the transportation costs which has limited the coverage area to Ministry of Finance, Uyo.
2. Time: The duration assigned for this study was very limited and non-challants attitude of respondents to give out information on relevance questions that is needed.

1.6    RESEARCH QUESTIONS    

For this study, it is pertinent to ask some question, such as

1. What is the relationship between auditing, accountability in the public sector?
2. To what extent are significant effects between misapplications of audit report towards management decision?
3. What possible effect could poor allocation of owners resources cause towards organization administration?
4. Is there any reason for non-segregation of functional duties?
5. Is there any significant reason why financial improperly in the public sector should occur?

 

1.7    DEFINITION OF TERMS USED IN THE STUDY

1. Accountability:An obligation to give an account for limited company. It is assured that the directors of the company are accountable to the shareholders and that this responsibility is discharged in part by the directors providing an annual reports and accounts. (Oxford Dictionary of Accounting, 2005).
2. Finance:Matters relating to monetary resources in a business during the normal course of business activity (Johnson, 1996)

iii.      Fraud: It includes theft of money or misappropriation of money and falsification of accounts  (Adams, 2003).

1. General Accepted Accounting Principles:The rules, accounting standards and accounting concepts allowed by accountants in measuring, recording and reporting transactions (Akpakpan, 2002).
2. Stewardship:A traditional approach to a accounting that places an obligation on stewards or agents such as directors to provide relevant and reliable financial information relating to resources over which they have vitals control but which are owned by others (Oxford Dictionary of Accounting, 2005)
3. Tool:Instrument used in order to perform a job or to achieve the desired objectives or goals as well as promoting the managerial efficient in an organization (Oxford Advanced Learner’s English Dictionary).

1.8    ORGANISATION OF THE STUDY

The study was organized into five chapters. Chapter one dealt with the introduction, statement of the problem, objectives of the study, significance of the study, scope/limitations of the study, research questions, definition of terms used in the study, organization of the study and brief historical background of Ministry of Finance, Uyo, etc.

Chapter two concerned a review of related literature on the subject matter. Chapter three focused on the area of the study, population of the study, sources of data and sampling techniques.

Chapter four dealt with data presentation, analysis and interpretation using tables and figures to fully explain the findings.

Finally, chapter five presented the summary of the findings/observations, conclusion and recommendations.

1.9    BRIEF HISTORICAL BACKGROUND OF MINISTRY OF FINANCE, UYO

The Ministry of Finance, Uyo is one of the key Ministries in Akwa Ibom State. It existed and started operations in 1987 when the state was created from the east while Cross River State. The Ministry is headed by the Hon. Commissioner in the person of Mr. Bassey Albert Akpan, who is the Chief Accounting Officer of that Ministry. He was appointed by the Excellency Chief Godswill Obot Akpabio, the Executive Governor of Akwa Ibom State and his appointment was ratified by the House of Assembly. The Administrative Head is a Permanent Secretary (PS) by name Mrs. Cecilia Umo Essien, who is a career civil servant and also the Accounting Officer.

The Ministry is in charge of the state finance and controls all financial matters and regulations with regards to government revenue and expenditure. It is made up of six (6) major departments with sub unit/sections under them. Their department includes, Administration, Ministry of Finance Incorporated (MOFIN), Finance and Supplies, Planning, Research and Statistics (PRS), Computer Services (CS) and the Office of the Accountant General (AG) department.