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AN EVALUATION OF THE EFFECT OF AUDITORS CONFLICTS OF

INTEREST ON MANAGEMENT OF PUBLIC FUNDS


(A CASE STUDY OF OFFICE OF THE AUDITOR GENERAL BAUCHI
STATE)

BY

ABUBAKAR ALIYU
REG NO: 15/31110068

A PROJECT SUBMITTED TO THE DEPARTMENT OF ACCOUNTANCY


AND TAXATION, SCHOOL OF MANAGEMENT STUDIES
ABUBAKAR TATARI ALI POLYTECHNIC BAUCHI IN PARTIAL
FULFILLMENT FOR THE REQUIREMENT OF THE AWARD OF HND
IN ACCOUNTING

NOVEMBER, 2017

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DECLARATION

I here declare that this project was carried out by me and is a record of my work.

References, published and unpublished literature have been duly acknowledged.

________________________ _____________________
Abubakar Aliyu Date

This research is confirmed by:

Project Supervisor: ______________ __________________


Dr. Ibrahim Abubakar Date

Programme Co-ordinator ______________ __________________


Mal. Sani Mahmood Date

Head of Department: ______________ __________________


Mal. Aliyu Aminu Baba Date

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APPROVAL PAGE

This final year project has been read and approved by the undersigned as meeting

the requirement for the award of higher National Diploma (HND) in Accountancy.

Project Co-Ordinator ______________ __________________


Dr. Ibrahim Abubakar Date

Project Supervisor: ______________ __________________


Dr. Ibrahim Abubakar Date

Head of Department: ______________ __________________


Mal. Aliyu Aminu Baba Date

Dean (SMS) ______________ __________________


Mal. Yahaya danjuma Date

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DEDICATION

I dedicate this research to the Almighty Allah who has made my study and this

work possible.

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ACKNOWLEDGEMENT

I am grateful to Almighty Allah, who has made my study in Abubakar Tatari Ali

Polytechnic, Bauchi a success. My appreciation also goes to my parent late Aliyu

Shehu Gubi, and Late Hajiya Hauwa’u Muhammad Dangikkawho has been with

me from day one of to their death. Their afford can never over emphasis. May

Jannatul Firdausi be their final abode ameen. My profound gratitude goes to my

wonderful supervisor Mal. Dr. Ibrahim Abubakar who has been a source of

encouragement, giving me his adequate time, useful suggestions, contributions to

the success of this work despite his numerous responsibilities and tight schedule, I

really do appreciate his constructive criticism which has helped to sharpen this

work, may Allah reward him abundantly. I also want to say thank you to my Head

of department Mal. Aminu Aliyu Baba.

I would also like to express my great appreciation to my wonderful family for their

patience, support and enthusiastic encouragement throughout my study.

My grateful thanks are also extended to my good friends Sani Aliyu Muhammad

and well-wishers for their advice and assistance in keeping my progress on

schedule.

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ABSTRACT

This research is aimed at evaluating the effect of auditor’s conflicts of interest in

management of public fund, using office of the auditors general of Bauchi state as

a study. The problems that necessitate were the degree of independence,

confidentiality and professional competence of auditors and how it affects their

judgment. In order the research objectives, questionnaires were designed and used

to obtain data. The data collected were presented and analyzed using tabular

representation showing the percentage, the questionnaire administered were 78

and only 66 were collected. The hypothesis were tested using regression analysis

technique, the result show that independence of an auditor has significant

influence on management of public fund the study also concluded there is

significance relationship between management of public pound confidentially and

processional competence. Based on the findings, it is therefore recommended that

the management should establish and maintain adequate internal control system in

the public organization and also they ensure that all principles and regulations

there to are duly observed.

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TABLE OF CONTENT

Title page - - - - - - - - - - i

Declaration - - - - - - - - - - ii

Approval page - - - - - - - - - iii

Dedication - - - - - - - - - - iv

Acknowledgement - - - - - - - - - v

Abstract - - - - - - - - - - vi

Table of content - - - - - - - - - vii

CHAPTER ONE: INTRODUCTION

1.1 Background of the Study - - - - - - - 1

1.2 Statement of the Problems - - - - - - - 2

1.3 Research Questions - - - - - - - 6

1.4 Objectives of the Study - - - - - - - 6

1.5 Hypotheses: - - - - - - - - - 6

1.6 Significance of the Study - - - - - - - 6

1.7 The Scope of the Study - - - - - - - 7

1.8 Definition of Terms - - - - - - - 8

CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction - - - - - - - - - 9

2.2 Conceptualization - - - - - - - - 9

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2.2.1 Concept of Auditing - - - - - 9

2.2.3 Auditing Classification - - - - - 11

2.2.4 Internal Control - - - - - - 12

2.2.5 Appointment of an Auditor - - - - 13

2.2.6 Independence Status of the External Auditor - - 13

2.2.7 Scope of Auditing in Government - - - 13

2.2.8 Financial and Compliance - - - - 14

2.2.9 Auditing Standard in Government - - - 14

2.2.10 General Audit Procedure - - - - - 15

2.2.11 Auditor’s Liabilities - - - - - 17

2.2.12 Conflict of Interest - - - - - 19

2.3 Theoretical Review - - - - - - 22

2.3.1 Theories of Auditing - - - - - 22

2.3.2 Agency Theory - - - - - - 24

2.4 Empirical Review - - - - - - - 25

CHAPTER THREE

3.0 Research Methodology - - - - - - 31

3.1 Introduction - - - - - - - - 31

3.2 Research Design - - - - - - - 31

3.3 Population of the Study - - - - - - 33

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3.4 Sampling Techniques and Sample Size - - - 33

3.5 Sources and Method data Collection - - - - 33

3.6 Method of Data Analysis - - - - - - 34

CHAPTER FOUR

4.0 Data Presentation Analysis and Interpretation - - 35

4.1 Introduction - - - - - - - 35

4.2 Data Presentation and Analysis - - - - - 35

4.4 Testing of Hypothesis - - - - - - 39

4.4 Summary of Findings - - - - - - 42

CHAPTER FIVE

5.0 Summary, Conclusion and Recommendations - - 44

5.1 Summary - - - - - - - - 44

5.2 Conclusion - - - - - - - - 45

5.3 Recommendations - - - - - - - 46

References - - - - - - - - 48

Questionnaire - - - - - - - 50

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