THE RELEVANCE OF AUDITING IN THE ACHIEVEMENT OF ACCOUNTABILITY IN PUBLIC COMPANIES (A CASE STUDY OF ANAMBRA MOTORS MANUFACTURING COMPANY, ANAMCO ENUGU, ENUGU STATE

The cradle of business organisation revealed that most business set ups were managed by their owners.  The ownership manager was the financial provider and contribution to the enterprise, but with the advent of large scale production and development in scope and in scale of business, a huge capital beyond that affordable by the sole proprietor or family was needed.

Consequently, contributors, hereafter called shareholds were required to raise the fund for the business.

The invitation of these shareholders led to the separation of the owner managers from the management of the business.  This is because all of them cannot, be the directors of the business at the same time.  As a result of this the management of the business was entrusted in the hands of people who have no financial claims to the business.  The law denies the shareholders access to the books of account of the company, depriving them of their rights to be kept abreast of the director’s performance.  The shareholders became skeptical about this.  Thus, the need of effective surveillance over the activities of the non-owner managing directors. 

Basically, in an attempt to satisfy the shareholders, the services of an auditor, who will serve as the third party in auditing the account of the business were needed and employed. 

The study revealed that the job of this auditor is to check whether the accounts present a true and fair view of the business’ transactions and also to ascertain the reliability of the records from which the accounts are drawn as well as verifying the assets and liabilities including petty and negligible transaction within the accounts.

The study also brought it to the light, that the company should be discreetly structured so as to facilitate full and proper enhancement and attainment of accountability.

Audit has since received a lot of definitions and or interpretations both from accounting bodies and authors.  Consultative council of accountancy bodies CCAB – defines audit thus:  The independent examination and expression of opinion on the financial statement   of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevant statutory obligation.  The general essence of audit is to ascertain compliance of the company’s records and operational polices with certain prescribed standard.  It aims also at increasing the usefulness of acceptability and dependability on the firm’s financial statements. 

Accountability on the other hand has suffered some misconception surprisingly in the hands of those with claims of degree.  There are people who should have understood it better.  Most laymen conceptional understanding of accountability relates it to communications only on monetary matters.  But accountability goes beyond that.

Accounting to the Webster Encycopedia Dictionary of English Language:  Accountability is the state of being accountable; answerable liable or responsible.

Accountable in particular public accountability is as old as the existence of human beings in social forms.  Accountability in general and from age old tradition implies stewardship.

It is the desire for accountability that rise what we know today as audit:  Mechanism through which the shareholders become abreast of the true and fair picture of the activities of the directors and chief executives of the company under the topic:

The relevance of audit toward the enhancement of accountability in the public company, the writer evaluates difference that an independent audit can make to the much desired accountability in the life of a public company.