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CHAPTER ONE
INTRODUCTION
1.1  Background to the Study
Auditing is a challenging responsibility in the accounting profession as whole and it is in fact developing into a profession of its own. The importance of and the purpose of an audit in public sector can not be overemphasized. The study of the subject itself is both interesting and rewarding although some have considered auditing to be not a necessary practice but merely the dull uninteresting check of various items. Howard (2012) added that the contrary by means of the study of auditing, not only can the true presentation of an organization financial position and transaction be assured; also the overall methods of business organization and administration can be appreciated. Auditing practice in public sector is meant to control, and check any fraud or misappropriation of public fund or property by officers and chief executives entrusted with such duties. It is because of the task that the Oredo Local Government Audit department was established to appraise the work of those entrusted with the responsibility. In view of the foregoing, this study aim to appraise the problem affecting it’s efficient performance and possible suggestion to enhance it’s effectiveness. An auditor is someone who is charged with the responsibility of examines the book and accounts of an organization in such a manner as to enable him to form an independent opinion as to the true ness and fairness of the financial statement. The art of auditing has been defined as an “independent examination of forming an opinion on the true and fair view of reporting entities financial statement with special reference to engagement letter and compliance with necessary legal and professional requirement.
The origin of auditing is traceable to the separation of ownership from control. The purpose of auditing is to protect the interest of the owner by ensuring the financial statements are justified. For the owner to be satisfied, it becomes necessary to invite an independent party who is not involved with either party, to examine the stewardship reports for the purpose of expressing an opinion as to the truth and fairness of the reports. There are two types of auditors namely: external auditor and internal Auditor. The external auditor diers from internal auditor in the area of appointment, scope of work reporting independence responsibility and approach to work among others. An internal auditors is an employee of the organization who manager’s performance he is responsible to examine and review. The scopes of his work, appointment, promotion are determined by management and by this, the internal auditors independence as a necessity for internal control is not quite encourage.
1.2  Statement of Problem
There have always been entries of poor accountability in the public service, with the local government inclusive. Also, there have been cases of financial mismanagement and fraudulent practices being perpetuated by some local government councils chief executive and officers. The problem is the identification of the reasons for this ugly situation and why the local government. Audit department has not been able to bring it to a half. The Oredo Local Government Council is loaded with a lot of financial burdens and as such cannot afford to loss most of her funds by way of fraud and misappropriation. This call for proper accountability and eective, working of the machinery established for exercising control over public funds. The role of this Audit Department toward achieving this goal is what this research paper aims to examine.
1.3  Research Questions
The researcher used the following selected research question in the study:
i. How does auditing help in ensuring public accountability?
ii. How is public expenditure controlled and regulated statutorily.
iii. To what extent is auditing meant to control and check any fraud or misappropriation of public fund or property.
1.4  Objective of the Study
This study aims at identifying and evaluating the following:
i. To ascertain how auditing help in ensuring public accountability.
ii. To determine if public expenditure is controlled and regulated statutorily.
iii. To find out if auditing is meant to control and check any fraud or misappropriation of public fund or property.

1.5  Statement of Hypothesis
This research will be guided by the following hypothesis in order to achieve it’s objectives.
HO: Auditing has not helped towards ensuring public accountability.
HI: Auditing has helped towards ensuring public accountability.
Hypothesis Two
HO: Public expenditure is not being controlled and regulated statutorily.
HI: Public expenditure is being controlled and regulated statutorily.
Hypothesis Three
HO: Auditing is not meant to control and check any fraud or misappropriation of public fund or property.
HI: Auditing is meant to control and check any fraud or misappropriation of public fund or property.
1.6  Significance of the Study
This study is significant in the sense that it will identify the causes of fraud and misappropriation of funds in the council and find possible solution to stop the practice. It will ascertain whether auditing plays any significant role towards ensuring public accountability or not. It will evaluate the role of the audit assessing the performance of each of these departments with a view to improving the preceding data. It will offer useful suggestion toward the local government audit department more effective.
1.7  Scope of the Study
In any organization – be it private or public scope and nature of accounting may vary depending on the extent of the operation. This is not to say, however, that there is variation in the underling basic principle. The basic accounting and control principles are to be highlighted throughout this research work with reference to Oredo Local Government Council. The survey would include the following:
a. A review of the primary records
b. A review of the secondary records
c. The effect of the statutory requirement on the system. The underlying philosophy of the accounting and control system inherent weakness in the system and suggestion of ways to addressing the weakness.
1.8  Limitations of the Study
Despite the fact that much effort was put into this work certain constraints were uncounted. The constraints were as follows:
a. Time: There was no enough time to carry out detailed investigation and research.
b. Finance: The problem of finance made it s little difficult to carry out proper research.
c. Lack of Information: Not all the information needed were given.
1.9 Definition of Terms
In t his research work the following terms were used:
a. Fraud: This is defined by a method of illegally getting money from someone, often by using clever and complicated methods or financial losses due to the.
b. Misappropriate: To dishonestly takes something that you have been trusted to keep safe.
c. Accountability: Having the ability to be responsible for the effect of your actions and willing to explain or be criticized for them.
d. Fund: An amount of money that is collected and kept for a particular purpose, or to provide money for an activity, organization or event.
e. Accounting Records: This contains entries from day to day of all sums of money received and expended by the organization and also records of the assets and liabilities of the organization.
f. Auditor: An auditor is someone who is charged with responsibility of examines the books and accounts of an organization in such a manner as to enable him to form an independent opinion as to the trueness and fairness of the financial statement.
g. Accounting Data: Includes journals, ledgers and other records, such as spreadsheets, that support financial statements.
h. Adjusting Entries: Are accounting entries made at the end of an accounting period to allocate items.
i. Accounting Principles: Are alternative ways of reporting and disclosing information in financial statement and related footnotes.
j. Accounts Receivable: Debt due from customers from sales of product and services reported as a current asset.  

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