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CHAPTER ONE

INTRODUCTION

1.1  Background to the Study

Total Quality Management (TQM) practices and small audit firm’s services delivery have had accounting antecedence. However, the concept can be traced back to the early 1920 production control ideal notably, the concept developed in the 1940s and 1950s by some Americans gurus in the likes of Deming, Juran and Feigenbaum. The concept, has many definitions worked upon by quality management discipline such as Deming, Juran, Crosby, Ishikawa and Feigenbaum who defined the concept in various ways but the essence and spirit remained unchanged. Furthermore, the definition of quality have changed with the passage of time, with changing customer/client’s need nad requirements but the essence has more or less been able to develop an approach to problem solving and conformation to standard for customer’s satisfaction (Vindu & Himanshu, 2007).An audit consists of a methodical review and objective examination of an enterprise financial statement which includes the process of verification of specific information as determined by the auditor of or established practice.

The purpose of an audit is to express an opinion as to whether or not the statement of account presents a true and fair view whatever it purports to report and to report accordingly (Conviser & Duffy, 2006).Distinctively, total quality management (TQM) practices and small audit firms services delivery are crucial in the economy in the sense that, shareholder requires the services of audit firms by appointing auditors to lend credibility to the financial statement.

A lot of people are interested in the financial statements of companies for one reason or the other.The users are refer to as stakeholders and they include shareholders (actual and potential), lenders (e.g. banks), employees, suppliers, customers government etc (Odion & Lawani, 2009). These users and indeed the general public sees the financial disclosures as the end result. Nevertheless, this has agitated both the managers and employees with increased responsibilities to ensure increased quality management and services delivery in small audit firms.The focus of this study is to determine total quality management practice and services delivery in small audit firms in Nigeria.

1.2  Statement of Problem

Total Quality Management (TQM) practice and small audit services delivery by quality service delivery which comes from inspired management team, employees and managers at all level look up to executive in small audit firms to set an example and a tune for the rest of the firms.
1.3  Research Questions
If total quality management practices can not provide accurate and sound audit services, what else could? In view of this, the study attempt to address the following;
-   Does total quality management practices ensure continuous improvement process in small audit firms?
-   Is a total quality management practice responsible for the objectiveness and effectiveness of small audit firms?
-   Is the concept of total quality management practice used in detecting or eradicating weakness in small audit firms
-   Does total quality management practice reflects a true picture of how small audit firms need operate. 
1.4  Objectives of the Study
It is impossible for an audit firm to produce outstanding services unless its top managers engages in Total Quality Management (TQM) practices. Total quality management practices arouses the understanding of group success. Personal success is derived from group success and its credit must be distributed among the team members. Hence, this research set to satisfy the following objectives;
-   To find out if there is total quality management practices ensures continuous improvement process in small audit firms. 
-   To ascertain if total quality management practices is responsible for the objectiveness and effectiveness of small audit firms.
-   To find out if the concept of total quality management practice is used in detecting or eradicating weakness in small audit firms
-   To find out if total quality management practice reflects a true picture of how small audit firms need operate. 
1.5  Statement of Hypotheses
The hypothesis of this research is divided into two. They are known as the null hypothesis (HO) and the alternative hypothesis (HI).In this study, four hypotheses were formulated and are to be tested. The hypotheses are listed as below;
Hypothesis OneHO:   Total quality management practice does not ensure continuous improvement process in small audit firms.  
HI:    Total quality management ensures continuous improvement process in small audit firms.
Hypothesis TwoHO:   Total quality management practice is not responsible for the objectiveness and effectiveness of small audit firms.
HI:    Total quality management practice is responsible for the objectiveness and effectiveness of small audit firms.
Hypothesis ThreeHO:   The concept of total quality management practice is not used in detecting or eradicating weakness in small audit firms in Nigeria.
HI:    The concept of total quality management practice is used in detecting or eradicating weakness in small audit firms in Nigeria.
Hypothesis FourHO:   Total quality management practice does not reflect a true picture of how small audit firms need to operate.
HI:    Total quality management practices reflect a true picture of how small audit firms need to operate.
1.6  Significance of the Study
The significance of this study is to ascertain the dynamics of total quality management practices and services delivery in small audit firms overall performance. Information derived from this study will be of great benefits to the following members of the society;
-   Researcher: The study will serve as an existing literature for future researchers.
-   Firm: This study will provide a basis to audit firm so as to appreciate total quality management practice.
1.7  Scope of the Study
The study is to cover audit firms with less than ten staffs, owned by three or less entrepreneurs and with a capital base of less than ten million naira (N10,000,000) and that have adopted Total Quality Management (TQM) practices in its organization. The study practically took place in Nigeria with more emphasis in Benin City firms and was within the range of eight (8) years (2005 – 2013). A sample size of 85 was used for effective survey.   
1.8  Limitations of the Study
Total quality management practices are difficult to achieve as a result of its technicality. It is also, sometimes unrealistic and unattainable in many aspects and so many organization contexts.The research design survey has a limitation that some respondents were unavailable to give responses. The questionnaire research instrument has the limitation that its structured nature may compel some respondents to provide answers that they do not fully endorse. There were also the limitation of scarcity of materials needed and money resources.    
1.9  Definition of Terms
- Audit: The auditing practice (APB) in the UK defined an audit as an exercise whose objective is to enable auditors to express an opinion whether the financial statements give a true and fair way (or equivalent) of the entity’s affairs at the period and of its profit or loss (or income and expenditure) for the period ended have been properly prepared in accordance with the applicable reporting framework (for example, relevant legislation and applicable accounting standards) or, where statutory or other specific requirements prescribed the term “present fairly” (Odion & Lawani, 2009).
- Auditing Services: The American Accounting Association (AAA) Committee defines auditing as a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between the assertions and established criteria and communicating the results to interested users (Odion & Lawani, 2009).
- Audit Terms: According to Coviser and Druffy (2006), audit firms are group of enterprise that has legal power to carry out audit services for business enterprise.   

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