AUDIT AS A TOOL FOR PREVENTION AND CONTROL OF FRAUD
( A CASE STUDY OF SAPIEM L.T.D YENEGUA BAYELSA STATE)
ABSTRACT
An audit of financial statement is an exercise whose objective is to enable auditor express an opinion on the account presented by management at the end of the years on whether on his opinion the account show true and fair view or otherwise.
 Internal control is the whole system of control, financial and other wise established by government to evaluate and checkmate the activities of the organization at every point in time.
For effective research work the researcher made use of secondary and primary data ,The primary sources of information include response from the respondents through the use of personal interview and questionnaire .the main objective of this research work isTo identify the causes of fraud in public parastatalsAnd To examine how audit could help in the prevention and control of fraud.
TABLE OF CONTENT
    Chapter one
 1.1 Background of the study
        1.2 Statement of problem
Objective of the study
Research question
Research hypothesis
Significance of the study
Scope of the study
Limitation of the study
Definition of terms
 Chapter two
Literature review
Introduction
The organs of auditing
Definition of Auditing
The need for an audit
Objective of auditing
Chapter three
Introduction
Research design
Population of study
Sampling techniques
Data collection procedure
Data analysis techniques
Chapter four
 The research instrument
Data presentation
Analysis of data
Discussion of finding
                                          Chapter five
Summary ,Conclusion ,Recommendation,
 Conclusion
                                         CHAPTERONE
1.0                                             INTORDUCTION
1.1 BACKGROUND OF THE STUDY
The substance of every economic entity depends on its ability to achieve its goal and objectives management for the achievement of corporate goals. Wither or not management will achievement this goal depends on how strong and reliable the growth of any corporate body largely depends on the effectiveness and efficient of the internal control system.
Therefore management has a duty of or ensuring that a strong and reliable control system exists within the organization for accountability and country.
For accountability within the organization the conduct at audit is mentionable. This is because account prepared by management may not disclose fraud deliberately misleading or failed to confirm to regulations. Therefore the necessary of auditing to cooperative organization cannot be overemphasized as thus will help the safeguard of the assets of the organization by detection and prevention of all kind of misappropriation and fraud within the organization. Over the years business and corporate organizations run into problems of liquidation. Bankruptcy and insolvency as a result of not only economic fact in the business environment but as a result of management in adequate and inefficient to mange. The internal activities of the organization therefore creating room for financial malpractice within the organization. Thus many corporate bodies run into liquidation as a result of fraud and misappropriation of funds (working capital) within the organization. These are funds that are supposed to be used for expansion of business activities.
Thus, auditing as a professional activity is to birch the gaps and lapses of management activities and to repent to the owner of business on the financial position of the business.
According to the American Accounting Association (AAA) committee on basic Auditing concept (1971), auditing and evaluating process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events o ascertain the degree of corresponding between those assertion and establishment to interested users. The Nigeria auditing guidance sees auditing as an independent tax the appointed and or in pursuance of his appointment and in compliance within any relevant statutory obligations.
From the above, it is clear that despite need of auditing by management within the organization, government also requires the account are audit annually before they publisher. However there are two objective of auditing in any corporate entity, the primary and secondary objects, the projective of auditing require the auditor to give report on this opinion on account investigated.
1.2 STATEMENT OF THE PROBLEM
In our present business environment the news of insolvency, bankruptcy and liquidation have become frequency news handling in magazines. Several factors are responsible for those ugly issues. The issue of liquidation is not only attributed to the business environment bur internal management problems. Therefore the following problems are identified
The issue of forgery of public fund for personal interest.
Lack of sense of responsibility and other forms of social values.
Low level of official awareness.
Weakness of internal control system to monitor the activities of management.
1.3 PURPOSE/OBJECTIVE OF THE STUDY
At the end of this study. The following objectives are expected to be achieved.
To identify the causes of fraud in public parastatals
To examine how audit could help in the prevention and control of fraud.
To examine the existence of internal control system in the organization
1.4 RESEARCH QUESTIONS.
What role can auditing play in the eradication minimization of fraud?
Does this company have internal auditors?
Does this company have external auditor(s)?
Do the company allow the internal auditor(s)freehand to perform his function
How does your company perceive auditing?
Do you think fraud can draw this company liquidation?
Does your company allow external auditor(s) freehand to perform their function?
 What type of fraud was suspected in the company
Are all daily expenditure authorized and accounted for by concerned authorities?
Does internal audit department check all sources and application of fund?
Do you think audit can prevent the suspected fraud in your company?
Are there any checks and balances in the administration and management of the company?
Is the internal audit department independent?
1.5 RESEARCH HYPOTHESIS
Hypothesis is a prediction or conjecture state well in advance of observation about what can be expected to occur induce stated or given condition Asika (2004)
This research work “audit as a tool for prevention and control of fund” will be tested in the process of the research analysis as follows
H1: there is a significant relationship between audit and the prevention and control of fraud
H2: there is no significant relationship between audit and the prevention and control of fraud.
1.6 SIGNIFICANCE OF THE STUDY
This study will go a long way helping all corporate to organization on the possibilities and consequence of financial recklessness and misappropriation of fund in business and probably the solution to ineffectiveness in the management firms.
Secondly, this study is significant because focused on corporate bodies which are the bedrock of every economy at large, this granting the continuity of corporate entities.
The study will encourage management to review and establish strategies to achieve maximum efficiency and effectiveness in order to bring about the desired return to contributors (shareholder).
Finally, this study, by using auditing as a tool, for prevention of fraud will help to ensure accountability, reliability and discipline within the management of companies in Nigeria.
1.7 SCOPE OF THE STUDY
The research works was carried out in yenagoa capital city of bayelsa state, Nigeria. The scope of this research work is limited to companies operating in yenagoa within effective reference to scripan nig Ltd.
However, the study will cover relevant areas such as auditing, fraud prevention, detection and control of fraud in the management of companies operating in Nigeria.
1.8 LIMITATION OF STUDY
This research is focused on the lack of adequate books and research inertial or the school library.
The company under study is at a consideration distance from the research institution. Hence distance problem, another glaring limitation here is financial constraint in carrying out the study.
However, an optimum balance of application scarce resources is maintained in carrying out the study.
 1.9 DEFINITION OF TERMS
An audit of financial statement is an exercise whose objective is to enable auditor express an opinion on the account presented by management at the end of the years on whether on his opinion the account show true and fair view or otherwise.  
Internal control system: Internal control is the whole system of control, financial and other wise established by government to evaluate and checkmate the activities of the organization at every point in time.
External auditing(s) These are set of professionally qualified auditors (Accountancy that members of ICAN /ANAN) who are not members of the organization, appointed by the shareholder/ directors to audit the financial statement prepared by management.
This is an un-intentional mistake in financial statement book of account.
: This is an intentional act to falsely misrepresent the true state of monetary transaction as fund in the books of account.
Irregularities; this is an intentional distortion of financial statement or book of account often accompanied by the false files and record.