THE ROLE OF INTERNAL AUDIT IN THE DETECTION AND PREVENTION OF FRAUD IN WIDIKUM COUNCIL
CHAPTER ONE
GENERAL INTRODUCTION
1.1 Background of Study
Historically, the evolution of auditing had been a complicated history that has always been changing through historical events. Auditing always changes to meet the needs of the business environment of the century. Auditing had existed since the beginning of human civilization and it focused mainly on detecting fraud and was done through extensive detailed examination from ancient times until the late 19th Century Lee, (1988). Fraud was of great concern during the early history of auditing because; internal controls were not used effectively until the 20th Century.
Traces of the precursors of audit can be dated back to Antiquity, to ancient Babylon and Egypt, where archaeological finds have proven the existence of some justifying documents of commercial transactions that allowed for a rudimentary form of verification and accounting (Bogdan, 2005).
And once the commercial trades blossomed during one period or another, the need to keep a record of the transactions also emerged albeit at a primitive level. But with economic prosperity came also the temptation to deceit and manipulate others for self-profit. Control mechanisms were, therefore, developed by state institutions to verify and supervise the use of funds and the circuit of transactions, as was the case for example in ancient Rome, where the questors elected by the people were responsible for this role (Bogdan, 2005).
During the Middle Ages, however, the interest to control financial documents and accounts and to verify the use or misuse of funds increased in Western Europe. The main objective was to discover those who eluded payment, appropriated funds, or misused money and property, and to defer them to justice. The three institutions that introduced as early as the 13th-14th centuries the idea of verifying accounts and holding the wrongdoers accountable were the state (represented by the reigning monarch), the Catholic Church, and the universities (especially those from Northern Italy), and employed functionaries or monks to keep the accounting of their respective structure (Le Goff, 1977).
It is not a coincidence that the bases of accounting are found within the financial and administrative apparatus of the Catholic Church, which was extremely interested in having detailed and correct records of its accounts, responsible transactions, and detection of possible frauds. A complex hierarchy of the fiscal apparatus was, therefore, created, presided over by a Minister of Finances within the Catholic Church, that included a category of specialists called ‘scriptures registry who we can deduce that were the accountants responsible for registering and examining the financial entries (Rapp, 1995).
The founder of accounting, Luca Paciolo created in the late 15th century the double entry accounting precisely to avoid thefts and misrepresentations in financial documents, at first within the Church and then the state (Epuran M., Baba V., Imbrescu C., p. 13). Another interesting aspect in the development of accounting is that, unlike the image of merchants, traders, or usurers, the men responsible for this work were not perceived negatively in society or marginalised (Le Goff, 1990), because they were associated with the good management of the state and the church, having both and economic and a judicial role (since they prevented or discovered the commission of a financial crime and therefore helped to protect state or church patrimony).
From the Modern Era on, the state was the main institution interested in implementing and supervising the accounting system to prevent, detect, and punish any fraud committed, both in its structures and in the public sector. And as the economic organisations became more complex and powerful in society, they also started to employ the services of specialist functionaries or accountants to maximise their profit and avoiding losses or thefts using distorted or erroneous financial entries.
The industrial revolution brought a quick economic development, but also an increased interest in the systems of capital, investment, and control of transactions (Lesourd, J.A., Gerard, C., 1986, vol. 1). But with the economic boom grew also people’s desire to make money quickly by malicious or deceitful means, and therefore the public opinion became more aware from the 18th century about the existence of financial fraud and other fraudulent schemes meant to acquire trust, property, goods, or political power (Stratmann, 2012), and all the cases discussed by the author).
The main reason many scientists give to an individual’s desire to acquire financial, spiritual, or symbolic profit is related to his greed, as it gave birth to novel and creative scenarios to impress upon other people (Goldberg, 1995). Although big scandals related to financial fraud existed in Western Europe in the late Middle Ages and early Modern periods (Sarna, 2010), it was during the 19th and 20th centuries that more emphasis was put on coherent accounting and financial investigations. The aim was that fraud, deceit, and misrepresentation could be discovered, punished, and eventually corrected to avoid future fraudulent situations like the ones that had occurred (Sarna, 2010).
The late 19th Century was a turning point in auditing when laws like the English Company Act of 1862 were enacted. Auditing activities existed in countries like ancient China, Rome and Greece. According to McNamee, (1995), the earliest records ever audited were Babylonian Clay tablets some 5000 years ago. The historical development of auditing was based on the “Stewardship” concept of Company Management Whereby Stewards were appointed to safeguard and account for the assets over which they had management control.
The function of the auditor was to ensure the Proprietors that the stewardship of their company was effectively and honestly carried-out. Auditing has undergone remarkable evolutions in the 21st century with the existence of new types of auditing like internal auditing, external auditing, management auditing, statutory auditing and compliance auditing.
In the 21st century, the auditing profession witnessed corporal scandals. After a series of revolutions involving irregular accounting procedures bordering on fraud penetrated throughout the 1990s involving Enron and its Accounting firm Arthur Andersen, Enron stood on the verge of undergoing the largest bankruptcy in history in mid-November 2001 (the largest chapter 11 bankruptcy until that of the Investment bank Lehman Brothers on September 15, 2008). It was mainly the scandal of Enron that indicated the lack of independence and objectivity at the executive levels Agacer, Vehmanen&Valcarcel, (1997).
Enron did not only fail due to improper Accounting Practices but, also failed due to corporate cultures that pushed executives into unethical behavioursRobbins, (2003) thus undermining fundamental principles such as objectivity and independence. The Enron scandal led to increased demand for the independence and objectivity of auditors within the auditing profession. This scandal led to a loss of clients in the largest auditing firm (Enron). To be able to keep their clients, auditors paid keen attention to ethical dilemmas that came their way Agacer et al, (1997).
‘‘It is always right to detect fraud and perceive a folly. But it is often very wrong to expose either. A man of business should always have his eyes open, but must often seem to have them shut’’ (Stanhope). People are very weak when the power of money is involved. They believe that money is the answer to everyone’s problem. That is why they are easily attracted to commit fraud. This bad practice is still prevalent in the business world today. Business analysts said that it was already part of the economic parlance with the state of our global and local economy today, businesses and individuals suffer a decline in their financial resources.
The issue of payroll in organizations was of utmost importance to the life of the organization as it ensured optimal use of the organization’s resources. According to Cadmus and Child, (1953), because payroll was so important as part of operating costs, and because it was usually controllable within rather wide limits, it was customary and correct that payroll should have continual executive attention.
The present-day observation of payroll differs from that of the earlier days owing to the changes in businesses and the world at large. Taking a step down memory lane, the following changes have been visible. It should be noted that primarily, payroll can trace its roots back to bookkeeping in most industrialized nations.
In the first instance, bookkeeping was a way for merchants to keep trace of their sales and outgoings, but over time as trade and businesses developed on a large scale, it developed into something much more complex. These days, companies needed to keep trace of their employee’s pay as well as their buying and selling, and with tax and legislation ever-changing, the need for accurate and efficient payroll solutions became paramount.
Theoretically, The main theory that underlies this research is Attribution Theory. According to Heider (2013), Attribution Theory can explain how the behaviour of an individual can determine the causes and motives of the behaviour of others or himself, such as character, attitudes and actions. Attribution theory suggests that there are behaviours associated with individual attitudes and qualities.
It can be said that just by looking at one’s behavior one can learn about one’s attitude or nature, and it can also determine one’s attitude in certain scenarios. In general, Fritz Heider’s 1958 Attribution Theory seeks to explain the reasons behind a person’s actions or roles. Prior studies have extensively employed attribution theory to explain auditor behaviour, the auditor’s function, performance evaluation, and decision-making in the context of auditing (Narayana, 2020). According to Putri et al. (2022), attribution theory is connected to assessment and describes how an auditor behaves in their role. Attribution has a significant impact on the auditor’s ability to spot fraud and stop it, with the factors affecting this ability typically coming from within the auditor.
The attribution theory used in this study is considered appropriate to explain how auditors perceive their role in preventing and detecting fraud. Research conducted by Narayana (2020) also adopts Attribution Theory to explain the effect of auditor attitudes on fraud prevention with organizational culture. Thus, this theory proposes that the level of success of a job depends on the role and specific causes of previous success or failure.
The next most important theory that was deemed necessary for this study is the Agency Theory. This theory analyses the relationship between two parties: investors and managers. It holds that the agent (manager) undertakes to perform certain duties for the principal (investor) and the principal undertakes to award the agent (Jensen and Meckling 1976). According to this theory, the role of the auditor is to supervise the relationship between the manager and the owners.
A gap expectation occurs when the distribution of the responsibility is not well defined. The responsibility of every part is well defined in the regulation. The manger and the owners have to realise that, the auditor does not have the responsibility for the accounting, but only sees that the auditing is done properly (Andersson and Emander, 2005).
According to (Hermanson et al 1993:5), there are four conditions in the business environment which create a demand for an independent audit. They include; Conflict of interest, Consequence, Complexity and Remoteness. Conflict of interest: A company’s financial statements are prepared by its directors and these directors are essentially reporting on their performance. Users of the financial statements want the statements to portray the company’s financial performance, position and cash flows as accurately as possible.
However, they perceive that the directors may bias their report so that it reflects favourably on their management of the company’s affairs. Thus it can be seen that there is a potential conflict of interest between the preparers and users of the financial statements. The auditors play a vital role in helping to ensure that directors provide, and users are confident of receiving information which is a fair representation of the company’s financial affairs.
Consequence: If users of a company’s financial statements base their decisions on unreliable information, they suffer serious financial loss. Therefore, they wish to be assured that the information is reliable and safe to act upon. In this condition, the auditor’s works add credibility to financial statements and users of them have peace of mind, when audited financial statements are giving the real picture of the company.
Complexity: As the information communicated has become more complex, users of information have found it more difficult, or even impossible, to obtain direct assurance about the quality of the information received. As companies have grown in size, the volume of their transactions has increased. As a result of these changes, errors are more likely to creep into the accounting data and the resulting financial statements.
Additionally, with the increasing complexity of transactions, accounting systems and financial statements, users of external financial statements are less able to evaluate the quality of the information for themselves. Therefore, there is a growing need for the financial statements to be examined by an independent qualified auditor, who has the necessary competence and expertise to understand the entity’s business, its transactions and its accounting system.
Remoteness: Remoteness is caused by the separation of the user of the information and the information source. It prevents the user from directly assessing the quality of the information received. In other words, as a consequence of legal, physical and economic factors, users of a company’s external financial statements are not able to verify for themselves the reliability of the information contained in the financial statements. Although for example, if they are major shareholders in the company, they have the de facto right of access to the company’s books and records.
Contextually, over the past years in Cameroon, internal audit has continually and substantially gained rounds in the country’s companies, in private institutions as well as government departments. This is due to the important necessity that internal audit possesses in the management and control of affairs of the institutions.
In 2002, Cameroon was admitted into the heavily indebted poor countries initiatives (HIPC) by the World Bank. This indicates that the malaise called poverty is present in our nation (The Herald Newspaper, 2002). This is contradicted or paradoxical as Cameroon is one of the most endowed countries in terms of natural resources in Africa.
The second rational is to bring out the importance of the hospital especially in the milieu of keeping cash services rendered and the disbursement of state funds and broaden our understanding, knowledge in internal audit, and helps to develop a professional ground for a career to be pursued. Finally, to aid propose possible ways by which the problems associated with the problem statement could be resolved bearing in mind the issue of corruption, errors, favouritism and tribalism. This will go a long way to access the effectiveness and efficiency of the system as well as the government’s efforts to satisfy the interest of its citizens.
1.2. Statement of Problem
Fraud is said to be a deliberate act of falsifying records by an individual or group of individual which misrepresent the truth and causes harm to its victims. This practice is commonly found in government organizations and most owners of private organizations realize it. Many unlucky organizations fall prey to fraud. Government organizations like councils are particularly likely to be victims of internal fraud as the government tend to put a blind eye on their employees.
Proper precautionary measures against fraud may also be neglected. The problem is that the trust bestowed on employees of government organizations is not always justified. All it takes is for one employee to decide they deserve a bigger slice of the national cake than they currently receive, and that could be enough to bring down the business.
Fraud is a pervasive corporate problem affecting organizations across industries and sectors without regard to size. Due to the disastrous consequences of fraud, failure to put deterrent procedures in place could put a government organization out of business within days. Fraud prevention then is a defined program of proactive measures to avoid an organization at a competitive disadvantage when fraud becomes a cost of doing business.
Therefore this study tends to examine the effectiveness of public sector internal auditors in fraud prevention. In a nut-shell, the damage which this menace, called fraud has done to our national development is innumerable and needs urgent attention. Therefore, the attempt to put an end to these economic maladies gave rise to this present study.
1.3. Purpose of the Study
This study seeks to assess whether the potentials of internal audit functions are proactive enough to prevent, detect and reduce fraud in Covered entities in the Widikum Council.
1.4. Research
1.4.1 Main Research Question
What is the role of internal audit in the detection and prevention of fraud in Widikum Council?
1.4.2 Specific Research Questions
- What are the academic qualifications and disciplines of internal auditors of Widikum Council?
- What are the problems associated with internal audits in the Widikum Council?
- What is the relationship between internal audit, fraud prevention, and detection in the Widikum Council?
- What are the procedures put in place for auditing in the Widikum Council?
Check out: Accounting Project Topics with Materials
Project Details | |
Department | Accounting |
Project ID | ACC0177 |
Price | Cameroonian: 5000 Frs |
International: $15 | |
No of pages | 60 |
Methodology | Descriptive |
Reference | yes |
Format | MS word & PDF |
Chapters | 1-5 |
Extra Content | table of content, questionnaire |
This is a premium project material, to get the complete research project make payment of 5,000FRS (for Cameroonian base clients) and $15 for international base clients. See details on payment page
NB: It’s advisable to contact us before making any form of payment
Our Fair use policy
Using our service is LEGAL and IS NOT prohibited by any university/college policies. For more details click here
We’ve been providing support to students, helping them make the most out of their academics, since 2014. The custom academic work that we provide is a powerful tool that will facilitate and boost your coursework, grades and examination results. Professionalism is at the core of our dealings with clients
For more project materials and info!
Contact us here
OR
Click on the WhatsApp Button at the bottom left
Email: info@project-house.net
THE ROLE OF INTERNAL AUDIT IN THE DETECTION AND PREVENTION OF FRAUD IN WIDIKUM COUNCIL
Project Details | |
Department | Accounting |
Project ID | ACC0177 |
Price | Cameroonian: 5000 Frs |
International: $15 | |
No of pages | 60 |
Methodology | Descriptive |
Reference | yes |
Format | MS word & PDF |
Chapters | 1-5 |
Extra Content | table of content, questionnaire |
CHAPTER ONE
GENERAL INTRODUCTION
1.1 Background of Study
Historically, the evolution of auditing had been a complicated history that has always been changing through historical events. Auditing always changes to meet the needs of the business environment of the century. Auditing had existed since the beginning of human civilization and it focused mainly on detecting fraud and was done through extensive detailed examination from ancient times until the late 19th Century Lee, (1988). Fraud was of great concern during the early history of auditing because; internal controls were not used effectively until the 20th Century.
Traces of the precursors of audit can be dated back to Antiquity, to ancient Babylon and Egypt, where archaeological finds have proven the existence of some justifying documents of commercial transactions that allowed for a rudimentary form of verification and accounting (Bogdan, 2005).
And once the commercial trades blossomed during one period or another, the need to keep a record of the transactions also emerged albeit at a primitive level. But with economic prosperity came also the temptation to deceit and manipulate others for self-profit. Control mechanisms were, therefore, developed by state institutions to verify and supervise the use of funds and the circuit of transactions, as was the case for example in ancient Rome, where the questors elected by the people were responsible for this role (Bogdan, 2005).
During the Middle Ages, however, the interest to control financial documents and accounts and to verify the use or misuse of funds increased in Western Europe. The main objective was to discover those who eluded payment, appropriated funds, or misused money and property, and to defer them to justice. The three institutions that introduced as early as the 13th-14th centuries the idea of verifying accounts and holding the wrongdoers accountable were the state (represented by the reigning monarch), the Catholic Church, and the universities (especially those from Northern Italy), and employed functionaries or monks to keep the accounting of their respective structure (Le Goff, 1977).
It is not a coincidence that the bases of accounting are found within the financial and administrative apparatus of the Catholic Church, which was extremely interested in having detailed and correct records of its accounts, responsible transactions, and detection of possible frauds. A complex hierarchy of the fiscal apparatus was, therefore, created, presided over by a Minister of Finances within the Catholic Church, that included a category of specialists called ‘scriptures registry who we can deduce that were the accountants responsible for registering and examining the financial entries (Rapp, 1995).
The founder of accounting, Luca Paciolo created in the late 15th century the double entry accounting precisely to avoid thefts and misrepresentations in financial documents, at first within the Church and then the state (Epuran M., Baba V., Imbrescu C., p. 13). Another interesting aspect in the development of accounting is that, unlike the image of merchants, traders, or usurers, the men responsible for this work were not perceived negatively in society or marginalised (Le Goff, 1990), because they were associated with the good management of the state and the church, having both and economic and a judicial role (since they prevented or discovered the commission of a financial crime and therefore helped to protect state or church patrimony).
From the Modern Era on, the state was the main institution interested in implementing and supervising the accounting system to prevent, detect, and punish any fraud committed, both in its structures and in the public sector. And as the economic organisations became more complex and powerful in society, they also started to employ the services of specialist functionaries or accountants to maximise their profit and avoiding losses or thefts using distorted or erroneous financial entries.
The industrial revolution brought a quick economic development, but also an increased interest in the systems of capital, investment, and control of transactions (Lesourd, J.A., Gerard, C., 1986, vol. 1). But with the economic boom grew also people’s desire to make money quickly by malicious or deceitful means, and therefore the public opinion became more aware from the 18th century about the existence of financial fraud and other fraudulent schemes meant to acquire trust, property, goods, or political power (Stratmann, 2012), and all the cases discussed by the author).
The main reason many scientists give to an individual’s desire to acquire financial, spiritual, or symbolic profit is related to his greed, as it gave birth to novel and creative scenarios to impress upon other people (Goldberg, 1995). Although big scandals related to financial fraud existed in Western Europe in the late Middle Ages and early Modern periods (Sarna, 2010), it was during the 19th and 20th centuries that more emphasis was put on coherent accounting and financial investigations. The aim was that fraud, deceit, and misrepresentation could be discovered, punished, and eventually corrected to avoid future fraudulent situations like the ones that had occurred (Sarna, 2010).
The late 19th Century was a turning point in auditing when laws like the English Company Act of 1862 were enacted. Auditing activities existed in countries like ancient China, Rome and Greece. According to McNamee, (1995), the earliest records ever audited were Babylonian Clay tablets some 5000 years ago. The historical development of auditing was based on the “Stewardship” concept of Company Management Whereby Stewards were appointed to safeguard and account for the assets over which they had management control.
The function of the auditor was to ensure the Proprietors that the stewardship of their company was effectively and honestly carried-out. Auditing has undergone remarkable evolutions in the 21st century with the existence of new types of auditing like internal auditing, external auditing, management auditing, statutory auditing and compliance auditing.
In the 21st century, the auditing profession witnessed corporal scandals. After a series of revolutions involving irregular accounting procedures bordering on fraud penetrated throughout the 1990s involving Enron and its Accounting firm Arthur Andersen, Enron stood on the verge of undergoing the largest bankruptcy in history in mid-November 2001 (the largest chapter 11 bankruptcy until that of the Investment bank Lehman Brothers on September 15, 2008). It was mainly the scandal of Enron that indicated the lack of independence and objectivity at the executive levels Agacer, Vehmanen&Valcarcel, (1997).
Enron did not only fail due to improper Accounting Practices but, also failed due to corporate cultures that pushed executives into unethical behavioursRobbins, (2003) thus undermining fundamental principles such as objectivity and independence. The Enron scandal led to increased demand for the independence and objectivity of auditors within the auditing profession. This scandal led to a loss of clients in the largest auditing firm (Enron). To be able to keep their clients, auditors paid keen attention to ethical dilemmas that came their way Agacer et al, (1997).
‘‘It is always right to detect fraud and perceive a folly. But it is often very wrong to expose either. A man of business should always have his eyes open, but must often seem to have them shut’’ (Stanhope). People are very weak when the power of money is involved. They believe that money is the answer to everyone’s problem. That is why they are easily attracted to commit fraud. This bad practice is still prevalent in the business world today. Business analysts said that it was already part of the economic parlance with the state of our global and local economy today, businesses and individuals suffer a decline in their financial resources.
The issue of payroll in organizations was of utmost importance to the life of the organization as it ensured optimal use of the organization’s resources. According to Cadmus and Child, (1953), because payroll was so important as part of operating costs, and because it was usually controllable within rather wide limits, it was customary and correct that payroll should have continual executive attention.
The present-day observation of payroll differs from that of the earlier days owing to the changes in businesses and the world at large. Taking a step down memory lane, the following changes have been visible. It should be noted that primarily, payroll can trace its roots back to bookkeeping in most industrialized nations.
In the first instance, bookkeeping was a way for merchants to keep trace of their sales and outgoings, but over time as trade and businesses developed on a large scale, it developed into something much more complex. These days, companies needed to keep trace of their employee’s pay as well as their buying and selling, and with tax and legislation ever-changing, the need for accurate and efficient payroll solutions became paramount.
Theoretically, The main theory that underlies this research is Attribution Theory. According to Heider (2013), Attribution Theory can explain how the behaviour of an individual can determine the causes and motives of the behaviour of others or himself, such as character, attitudes and actions. Attribution theory suggests that there are behaviours associated with individual attitudes and qualities.
It can be said that just by looking at one’s behavior one can learn about one’s attitude or nature, and it can also determine one’s attitude in certain scenarios. In general, Fritz Heider’s 1958 Attribution Theory seeks to explain the reasons behind a person’s actions or roles. Prior studies have extensively employed attribution theory to explain auditor behaviour, the auditor’s function, performance evaluation, and decision-making in the context of auditing (Narayana, 2020). According to Putri et al. (2022), attribution theory is connected to assessment and describes how an auditor behaves in their role. Attribution has a significant impact on the auditor’s ability to spot fraud and stop it, with the factors affecting this ability typically coming from within the auditor.
The attribution theory used in this study is considered appropriate to explain how auditors perceive their role in preventing and detecting fraud. Research conducted by Narayana (2020) also adopts Attribution Theory to explain the effect of auditor attitudes on fraud prevention with organizational culture. Thus, this theory proposes that the level of success of a job depends on the role and specific causes of previous success or failure.
The next most important theory that was deemed necessary for this study is the Agency Theory. This theory analyses the relationship between two parties: investors and managers. It holds that the agent (manager) undertakes to perform certain duties for the principal (investor) and the principal undertakes to award the agent (Jensen and Meckling 1976). According to this theory, the role of the auditor is to supervise the relationship between the manager and the owners.
A gap expectation occurs when the distribution of the responsibility is not well defined. The responsibility of every part is well defined in the regulation. The manger and the owners have to realise that, the auditor does not have the responsibility for the accounting, but only sees that the auditing is done properly (Andersson and Emander, 2005).
According to (Hermanson et al 1993:5), there are four conditions in the business environment which create a demand for an independent audit. They include; Conflict of interest, Consequence, Complexity and Remoteness. Conflict of interest: A company’s financial statements are prepared by its directors and these directors are essentially reporting on their performance. Users of the financial statements want the statements to portray the company’s financial performance, position and cash flows as accurately as possible.
However, they perceive that the directors may bias their report so that it reflects favourably on their management of the company’s affairs. Thus it can be seen that there is a potential conflict of interest between the preparers and users of the financial statements. The auditors play a vital role in helping to ensure that directors provide, and users are confident of receiving information which is a fair representation of the company’s financial affairs.
Consequence: If users of a company’s financial statements base their decisions on unreliable information, they suffer serious financial loss. Therefore, they wish to be assured that the information is reliable and safe to act upon. In this condition, the auditor’s works add credibility to financial statements and users of them have peace of mind, when audited financial statements are giving the real picture of the company.
Complexity: As the information communicated has become more complex, users of information have found it more difficult, or even impossible, to obtain direct assurance about the quality of the information received. As companies have grown in size, the volume of their transactions has increased. As a result of these changes, errors are more likely to creep into the accounting data and the resulting financial statements.
Additionally, with the increasing complexity of transactions, accounting systems and financial statements, users of external financial statements are less able to evaluate the quality of the information for themselves. Therefore, there is a growing need for the financial statements to be examined by an independent qualified auditor, who has the necessary competence and expertise to understand the entity’s business, its transactions and its accounting system.
Remoteness: Remoteness is caused by the separation of the user of the information and the information source. It prevents the user from directly assessing the quality of the information received. In other words, as a consequence of legal, physical and economic factors, users of a company’s external financial statements are not able to verify for themselves the reliability of the information contained in the financial statements. Although for example, if they are major shareholders in the company, they have the de facto right of access to the company’s books and records.
Contextually, over the past years in Cameroon, internal audit has continually and substantially gained rounds in the country’s companies, in private institutions as well as government departments. This is due to the important necessity that internal audit possesses in the management and control of affairs of the institutions.
In 2002, Cameroon was admitted into the heavily indebted poor countries initiatives (HIPC) by the World Bank. This indicates that the malaise called poverty is present in our nation (The Herald Newspaper, 2002). This is contradicted or paradoxical as Cameroon is one of the most endowed countries in terms of natural resources in Africa.
The second rational is to bring out the importance of the hospital especially in the milieu of keeping cash services rendered and the disbursement of state funds and broaden our understanding, knowledge in internal audit, and helps to develop a professional ground for a career to be pursued. Finally, to aid propose possible ways by which the problems associated with the problem statement could be resolved bearing in mind the issue of corruption, errors, favouritism and tribalism. This will go a long way to access the effectiveness and efficiency of the system as well as the government’s efforts to satisfy the interest of its citizens.
1.2. Statement of Problem
Fraud is said to be a deliberate act of falsifying records by an individual or group of individual which misrepresent the truth and causes harm to its victims. This practice is commonly found in government organizations and most owners of private organizations realize it. Many unlucky organizations fall prey to fraud. Government organizations like councils are particularly likely to be victims of internal fraud as the government tend to put a blind eye on their employees.
Proper precautionary measures against fraud may also be neglected. The problem is that the trust bestowed on employees of government organizations is not always justified. All it takes is for one employee to decide they deserve a bigger slice of the national cake than they currently receive, and that could be enough to bring down the business.
Fraud is a pervasive corporate problem affecting organizations across industries and sectors without regard to size. Due to the disastrous consequences of fraud, failure to put deterrent procedures in place could put a government organization out of business within days. Fraud prevention then is a defined program of proactive measures to avoid an organization at a competitive disadvantage when fraud becomes a cost of doing business.
Therefore this study tends to examine the effectiveness of public sector internal auditors in fraud prevention. In a nut-shell, the damage which this menace, called fraud has done to our national development is innumerable and needs urgent attention. Therefore, the attempt to put an end to these economic maladies gave rise to this present study.
1.3. Purpose of the Study
This study seeks to assess whether the potentials of internal audit functions are proactive enough to prevent, detect and reduce fraud in Covered entities in the Widikum Council.
1.4. Research
1.4.1 Main Research Question
What is the role of internal audit in the detection and prevention of fraud in Widikum Council?
1.4.2 Specific Research Questions
- What are the academic qualifications and disciplines of internal auditors of Widikum Council?
- What are the problems associated with internal audits in the Widikum Council?
- What is the relationship between internal audit, fraud prevention, and detection in the Widikum Council?
- What are the procedures put in place for auditing in the Widikum Council?
Check out: Accounting Project Topics with Materials
This is a premium project material, to get the complete research project make payment of 5,000FRS (for Cameroonian base clients) and $15 for international base clients. See details on payment page
NB: It’s advisable to contact us before making any form of payment
Our Fair use policy
Using our service is LEGAL and IS NOT prohibited by any university/college policies. For more details click here
We’ve been providing support to students, helping them make the most out of their academics, since 2014. The custom academic work that we provide is a powerful tool that will facilitate and boost your coursework, grades and examination results. Professionalism is at the core of our dealings with clients
For more project materials and info!
Contact us here
OR
Click on the WhatsApp Button at the bottom left
Email: info@project-house.net