CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
This work “impact of internal Auditing in Local Government Administration” aims at analyzing whether the internal auditing enables management to ensure efficient use of resources. In modern business organizations, Management and ownership are distinguished. The purpose management is to make it possible for people to operate in groups through the use of available human and material resources in order to make gain. Many organizations render valuable service to both members of the public and government. Examples are Local Government Areas whose services include provision and maintenance of road, Motor park, market, health service and primary school, as well as the maintenance of peace and order in the society.
It is through Local Government that State and Federal Government generate enough revenue to finance their projects yearly. The nature of services offered by Local Government place the state and Federal Governments at high level of generating revenues.It is based on these reasons that efficient operational results are demanded from the various Local Government Administration.Efficient management only result through sound internal control and other control measures adopted by management. However, the introduction of control measures cannot itself guarantee profitability of any enterprise without the activities of the organization being reviewed, measured, evaluated and appraised.An important tool used for this purpose is the Internal Audit Function.
Auditing, in general, involves an independent examination and investigation of the guidance from which the financial statement has been prepared with a view to enabling the independent examiner report, whether in his opinion and according to the best of the information and explanations obtained by him, the statements is properly drawn up and gives a true and fair view of what of reports to show and if not, to report in what respects he is not satisfied. (Ayasi, 1982).Internal auditing, as a branch of auditing, is defined by the international federation of accountant (1984) as “an element of internal control system set up by management of an enterprise to examine, evaluate and report on accounting and other controls and operation”.