ACCOUNTING RECORD KEEPING AND AUDITOR’S PERFORMANCE

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ACCOUNTING RECORD KEEPING AND AUDITOR’S

PERFORMANCE

Accounting (B.S.C)

Chapters 1-5

No of pages 130 pages

Price N 5, 000

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ABSTRACT

This research work focused on accounting record keeping

and auditor’s performance .The effects of inadequate accounting

record keeping can never be over emphasized. Accounting

records has its end point in the financial statements hence,

management should ensure that the financial statements they

prepare portray the true position of an organization. This can

only be achieved when adequate accounting records have been

kept. Using questionnaires we gathered data from primary

source and secondary from text books, journals, internet etc.

Data obtained were gathered using tables and analyzed using

chi-square. Hypotheses were also tested using chi-square. Our

findings indicates that accounting records play important role in

the performance of auditor’s function and auditors need

accounting records to carry out their work effectively.

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CHAPTER ONE

INTRODUCTION

1.1 Background to the study

According to Punkett (1979) accounting is the oldest

profession. Infact since prehistoric times families had to account

for food and clothing to face the cold season. Later as man

began to trade we established the concept of value and

developed monetary system. Evidence of accounting records can

be found in the Babylonian empire (4500bc) in pharaoh’s Egypt

and in the code of Hammurabi (2250b.c). Eventually with the

advent of taxation record keeping became a necessity for

government to sustain social orders.

The Italian renaissance brought the artistic

accomplishment of man to new height. At this time Venice was

the business cradle of Europe and it was here among merchants

that double entry accounting was invented and practiced.

However auditing started when ownership was separated

from administration .this was first seen in Ancient Greece where

government al accounting records (for the monarchs) were

certified as true and fair only after a public hearing in which the

account s were read aloud to the hearing of the people based on

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whose response (i.e. either affirmation or denial) the monarch

either affirm by saying “I hear” or reject by being silent.

According to Oladipupo (2005) the social relevance of

auditing in this crude form was mainly to detect if such public

officers have upheld their stewardship position and the basis of

which their reappointment into earlier occupied position lies.

From the Medieval times on through the industrial revolution

audits were made to determine whether persons in position of

fiscal responsibility in government and commerce were

accounting and reporting in an honest manner. During the

industrial revolution as manufacturing concern grew in size their

owners began to use the service of hires managers. With this

separation of ownership from management the absentee owners

turned increasingly to auditors to protect themselves against the

dangers of fraud by both manager and employees.

In Nigeria or elsewhere in the world, the shareholders

(owners) are separate from the management. This is more

pronounced where such companies are quoted in the stock

exchange. The day to day running of the business is however

vested on management who help to implement policies of the

board while the owners’ responsibility is just to pool their

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resources together to fund the activities of the company and

they bear the ultimate risk in the event of failure. Therefore the

owners appoint auditors or need audit of financial report in order

to have confidence or faith in such report prepared by

management and know if the drafted financial statement gives a

true and fair picture of the financial position operating result and

changes in the financial position.

Improper accounting record keeping by management is

aimed at reporting the financial statement of a firm in a wrong

position which conflict with the basic aim of accounting

regulation to provide consistent and comparable financial

information to users. Improper record keeping has been the root

of a number of accounting scandal like ERON and WorldCom.

When discovered at any time that proper accounting records

where not kept by management they should be made to face the

wrath of the law. The effect of improper record keeping is

enormous. Keeping of improper accounting records could

mislead the auditor thereby making their report n not to be

reliable. This could reduce the auditor’s actual standard of

performance.

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1.2 STATEMENT OF RESEARCH PROBLEM

Presently we observed that companies that are being

audited and shown to be healthy run into financial crisis within a

short time. It happens probably because management do not

keep proper accounting record that will be sufficient for an

auditor to carry out his work.

1.3 RESEARCH QUESTION

In the light of the above the following questions were

asked

1. What are the records that are necessary for auditor’s

performance?

2. Does management keep such records?

3. Does proper record keeping enhance auditor’s

performance?

1.4 RESEARCH OBJECTIVES

The following are the objectives of this research

1. To find out the records that is necessary for auditor’s

performance.

2. To find out whether management keep such records.

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3. To find out whether proper record keeping enhance

auditor’s performance

1.5 SIGNIFICANCE OF THE STUDY

The significance of accounting records lies in the fact that it

holds true for all uneven situation and keeping a proper note of

financial transaction can prove useful for a company in times of

problematic condition. So whether business is big or small

accounting records prepared in the proper manner will never

lose value and is always recommended so that the business can

potentially grow and outgrow others and stand as a reputable

organization.

1.6 SCOPE OF THE STUDY

The scope of the study is limited to accounting record

keeping and auditor’s performance in the banking industry in

EDO STATE .This study specifically focuses on the roles played by

management of banks in preparing proper accounting records

and how auditors perform in the examination of such records.

1.7 RESEARCH HYPOTHESIS

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The following statement of hypothesis was tested in this

research

1. H0 management does not keep accounting records

H1 management keep accounting records

2. H0 proper record keeping does not enhance auditor’s

performance

H1 proper record keeping enhance auditor’s performance

1.8 LIMITATION OF THE STUDY

There is no research study no matter how well conducted

that is free from certain constraint. Time which is not our best

friend compelled this research to be restricted to the respondent

from the above mentioned state. Staff not usually or easily

cooperating forced the researcher to visit their offices severally

before they could complete the questionnaire. Cost is another

factor that bore greatly on this research .Fuel hike influenced

transportation greatly, thus movement to and fro sourcing for

materials was great in convenience.

1.9 DEFINITION OF TERM

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RECORDS- it is the basic information which documents financial

personnel, Inventory supply or customers activities.

ACCOUNTING RECORD- it can be defined as all documentation

and books used during the preparation of financial statement

AUDITOR’S PERFORMANCE- It can be defined as how well an

auditor carries out the audit of a client’s financial statement.

Accounting (B.S.C)

Chapters 1-5

No of pages 130 pages

Price N 5, 000

For more project materials

Log on to www.grossarchive.com

Or call

+2348130686500+2348097682691

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ACCOUNTING RECORD KEEPING AND AUDITOR’S PERFORMANCE