CHAPTER ONE
INTRODUCTION TO AUDITING
This chapter attempts to explain why Auditing exist as a discipline. It first explain the concept of stewardship accounting. The objectives of auditing are best explained with an introduction to auditors report and the organization of the Auditing profession.
The different types of audits are introduced in the final part of this chapter.
STEWARDSHIP ACCOUNTING
Stewardship Accounting according to Kola Olowookere are accounts rendered by managers to owners of the business. Stewardship account led to the development of auditing. This reporting and accounting is usually done by means of financial statement. Examples are:- balance sheet, profit and loss account and cash flow statement .
Auditing can be defined from two different perspectives:- One, auditing as a tool put in place by the management of the company to clock the internal control system operation if they are strictly adhered to.
In other words, Auditing according to The Consultative Council of the Accountancy Bodies defines Audit as the independent examination of an expression of opinion on the financial statements of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevant statutory obligation.
AUDIT EVIDENCE
According to the Consultative Committee of Accounting Bodies (CCAB) in the United Kingdom in its auditing standard of April 1980 stated among other things:-
“The auditor should obtain relevant and reliable audit evidence, sufficient to enable him draw reasonable conclusions”.
Audit evidence is information obtained and recorded by the Auditor in arriving at the conclusions on which he bases his opinion on the financial statements.
OBJECTIVES OF AUDITING
The primary object of an audit is not to detect fraud, errors and irregularities. The primary duty is to produce a report by the auditor of his opinion of the truth and fairness of financial statements so that any person reading and using them can rely in them. However, the secondary object is to:
(a) To detect errors and fraud
(b) To prevent errors and fraud
(c) To provide moral check
(d) To show true and fair view of his opinion
(e) To ensure the reliability of the internal control system
RESEARCH HYPOTHESES
Hypotheses formulated for this study “The impact of computer in auditing” a case study of Tantalizer Fast Food Ikotun will include the following:
H1 Computerization has enabled employees carry out their task and responsibilities effectively, efficiently and quickly meet the management demand.
Ho Computerization has not enabled effectiveness and efficiency in management.
H1 Computer has a positive effect in accounting system in relation to the productivity of accounting personnel
Ho Computer does not have a positive effect in accounting system in relation to the productivity of accounting personnel
H1 Computer has created employment opportunity of accounting personnel.
Ho Computer has only led to unemployment of accounting personnel.