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Project topic for Financial Studies department.


1.0 INTRODUCTION                                                                                                  


            The increasing incidence of fraud and miss appropriation of funds and property by accounting officers and chief executive in the public sector of the Nigeria economy pose pertinent question as to whether auditing plays any significant role towards ensuring proper accountability and judicious use of funds set aside for various purpose and corporate objectives.

            Some programmers and activities organized by these individuals care assumed to be done on behalf of the people therefore festered to be assured the resources which they put at the proposal of this accounting offices are efficiently, effectively and economically managed, since it is known, that not all of us are judicious in its management of our private affairs and much less, the public affairs entrusted to us. A case in point is about affairs entrusted like bank. Poor management was the problem with these banks, if these banks that carried out proper audit and made use of the recommendation, the directors would have reduced proper account of their facts.

            Accountability has clearly manifest itself as a principle to be pursed if the status quo is not to be perpetrated. Several past leaders have pledge to introduced a  more responsible system of government with accountability hence it question of what then is accountability arises.   Accountability as it is contained in long man dictionary of contemporary English is the condition or quality of being able (that is having) to give an explanation for ones actions.  Accountability is also defined as the management of funds and other assets of which individuals or institutions had been custodians.

            Auditing is regarded as one of the more recently established professions born out of the complexity of modern business world. It because relevant so as to discourage men from erring out to expose those who erred when they give account of how they managed the funds and property entrusted in them. This account or report is usually done by means of financial statements in order to verify he true and fairness of this reports. A interdependent person- audition will audits he account.       

            An audit is an investigation by an auditor into the evidence form which the final revenue accounts and balances sheet or other statement of an organization  have been  prepared in order to ascertain that they present true and fair view of  the summarized transaction for the organization at the end date, so enabling the auditor to report there on. There are more involved definition such as: that issued by the consultancy council of accountancy bother (CCAB) which defined as audit as “the independent examination of and expression of opinion of the financial statements of an enterprise by an appointed auditor in pursuance of that appointment and incompliance with any relevant statutory obligations.


            There has been an out cry of poor accountability in the public sector of Nigeria with more emphasis on NNPC. The effectiveness of an independent audit is not however limited to the added statement of creditability derived from the audit itself. There is the statutory affect of the prospective audit on employer who may be tempted to defraud their employers and or management that may find it expedient to endeavor to deceive third party users by preparation of misleading financial statements. The problems are that the funds and property of the organization are entrusted to certain individual employers who are not brought under through surveillance. The result is that most of the funds and property are distorted to personal use. Another problem is the identification of the reasons for this ugly situation and why despite the fact that the account of these public organization are said to be audited. There is still an increased in fraud and misappropriation of fund and property.


The objectives of this study are to find out:-

  • The role of audit as an aid to accountability in the public sector with reference to NNPC.
  • The problem facing auditors, which hinder their performance in NNPC.
  • The role being played by auditors towards protection of funds and property in NNPC.
  • Whether the standard of auditing has fallen in recent years   
  • The effectiveness of audit report, their implementation to is the supreme belief that the information collected from this study will highlight the benefits of auditing towards ensuring proper accountability in the public sector and also serve as a foundation for out regular audit.
  •            To effectively conduct this research, the following hypotheses are desired to help us in our analysis these are as follows:-
  • HO: Auditing as an aid to accountability has not been
  •        more useful to NNPC over the years.
  • Hi:    Effective auditing and investigation have not
  • really minimized the rate of fraud and misappropriation the NNPC (Nigeria National Petroleum Company).

Ho:      Effective auditing and investigation have really minimized the rate of fraud and misappropriation in NNPC (Nigeria National Petroleum Company).

Hi:    Effective auditing and Investigation have really minimized the rate of fraud and misappropriation in NNPC (Nigeria National Petroleum Company)

Ho: The management of NNPC has not been implementing auditor’s reports and guidelines.

Hi: The management of NNPC has been implementing auditor’s reports guidelines.


The study is significant for the following:-


This study will serve as a foundation for further research on this topic to student in the school for financial studies.

Financial house

This study will be great important to financial house wishing to improve their standard of operation. It will assist them in their system of internal control and so help to check fraud.


This study will help to highlight the causes of fraud and misappropriation of properly and funds in the organization and provide suggestion to stop the practice. Other includes banks, professional’s bodies and impact the general public.


            In the course of writing this project, the researcher encountered some problems among which are:-


 Due to limited time stipulated for the completion of this study by the institution, researcher had no enough time to get some of the staff in NNPC who would have contributed in making he work a huge success.


In carrying out such a research work the writer spend much money on transportation and collection of data.

Availability of data

The research found it difficulty to obtain data because of the inability of some officers to supply data or information needed by the researcher.


            The term used makes the study more understandable, these terms are as follows:-


Investigation into the evidence form which trial revenue accounts and balance sheet are prepared to ascertain true and fair view.


These are the professional persons in charge on audit.


This is the rendering of return on stewardship relating to management of fraud and assets which individual have been custodian.

Financial statement

This is the balance sheet of an organization showing of assets and liabilities whether there is profit or loss for the period of one year  (12months).

Consultative council of accounting bodies (CCAB): Bodies, which bring laws and rules stated for accounting bodies.

External and internal duties

Internal auditors are  auditors whose  primary duties is not to detect fraud but with negligence could be sure, while external auditor are auditors from various firms to check on company’s record.

Operational manual

This is manual used in guiding operation


This is an organization involved in every aspect from staff to staff.

Internal control

This means the whole system of controls, finance and otherwise, established by the management.

Internal auditor:

A reviewed of operation and records sometimes continuous undertaken within a business by a special assigned staff.

Government accounting procedure (GAP), which guides series of laws.

Investigation: Finding against fraud

Balance audit: Account audit  

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