MANAGEMENT OF FRAUD AND WASTAGE IN A BUSINESS ORGANISATION; IMPLICATION FOR INTERNAL AUDITION
ABSTRACT
This study is on management of fraud and wastages in business organizations: implications for internal auditor. Many objectives were set among which are: to identify the nature, types and major causes of fraud and wastages. Two Hypothesis were also tested to determine if or not the hypotheses might be instrumental in fraud and wastages occurrences in business organizations. In arriving at the data used, both primary and secondary data were used. The primary data includes questionnaires distributed to sampled staffs and management of May and Baker Plc and Drugfield Specialty Product Plc. The secondary data includes materials form published textbooks, internet, articles and newspapers. These were tested using Z-test statistics. Data were analyzed and some of the findings include inadequate control measures took the most significant causes of fraud and wastages followed by deliberate intent and management ignorance. Finally, I recommended that proper internal control measure should be put in place, and other measures that will help to facilitate it like: inspection, review and observation. Trustworthiness, competence and integrity of employees and their understanding of prescribed policies and procedures.
TABLE OF CONTENTS
CHAPTERONE    Introduction
1.1 Background of thestudy
1.2 Statement ofproblem
1.3 Objective of thestudy
1.4 Researchquestions
1.5 Statement ofhypothesis
1.6 Purpose of thestudy
1.7 significance of thestudy
1.8 Slope and limitation of thestudy
1.9 Definition ofterms
       2.0 CHAPTERTWO    Literaturereview
2.1 Definition of internal audit    
2.2 Objectives of internal audit    
2.3 Characteristics of internal audit    
2.4 Functions of an internal audit     
2.5 Responsibility of an internal auditor to management    
2.6 Internal auditing as an aid to fraud prevention    
2.7 Internal audit as an internal part of internal control    
2.9 Problem of internal audit    
2.10 Historical background     
CHAPTERTHREE    Researchmethodology
3.1 Introduction and researchdesign3
3.2 Data collectionmethod    
    Research population and samplesize35
    Distribution ofquestionnaire36
    Validation and reliability of theinstrument37
3.6 Method of dataanalysis    
3.7 Decision criteria for validation ofhypotheses    
CHAPTERFOUR    Data analysis and researchfindings
4.1Introduction    
4.2 Data analysis    
4.3 Test of hypotheses    
CHAPTERFIVE    Summary, conclusion and recommendation
5.1Summary    
5.2Conclusion    
5.3Recommendation    
Bibliography
CHAPTERONE
 INTROUCTION
    BACKGROUND OF THESTUDY.
At the beginning of the century, most businesses are small and sole-operated. The owners/managers are overly involved with most of the decision making. As business grows in size and complexity, professional managers take position of the owners and the operators.
Consequently, they rely heavily upon streamsof accounting and statistical report which summarizes current happenings and conditionsin the enterprise. The information carried by these streams of report enables management   to   control   and   direct  the  enterprise    in ordertoassuremanagementthattheinformationreceivedarebothreliableandaccurate.Asystem of internal audit is developed to monitor the activities of thecompany.
The need for maintaining the adequate efficient and effective internal audit, therefore cannot be overemphasized especially in days when Nigeria’s economy still is witnessing depression and every company is making effort in ensuring that wastage, waste, misappropriation are checked or avoided,  and to ensure that assets are beingsecured.
Some problems were noticed during the cause of this research; problems within the company, these problems necessitate this work. The researcher noticed that there was ineffective co-operation between the internal audit and management, audit reports were sometimes ignored by the management. The relationship between the internal auditor and external auditor was strained making work harder for the external auditor. The lack of internal audit to prevent waste and fraud within the company thereby preventing an error free working condition.
    STATEMENT OFPROBLEM
Often, management and internal audit department function were seen as contradictory rather than complementary. Internal audit department is setup to ensure adherence to management policy but this objective cannot be achieved because of interference and undue influence by the top management.
More so, monthly or quarterly internal audit report as the case may be in an organization is expected to provide information required by management to determine how effective their policies and implementation are. It is on this realization that this study will attempt to determine how effective are those information to aid management in solving day to day problems. It signifies defects or problems; the research will examine number of themnamely:
 a)    There exists no relationship between the internal audit and management.
b)        Internal audit does not assist in the detection and prevention of waste.
c)    Internal audit does not assist in detection and prevention offraud.
    OBJECTIVES OF THESTUDY.
Objectives of the study include:
    To ascertain if the duties of the internal auditor assist management in taking informeddecision.
    To find out if internal audit assists in the detection and prevention of fraud.
    To detect if internal audit helps in checking waste
    RESEARCHQUESTIONS.
i)    Is there any relationship between the internal audit andmanagement?
ii)    Does internal audit assist in the detection and prevention of fraud?
iii)    Does internal audit assist in the detection and prevention of waste?
    STATEMENT OFHYPOTHESIS
To justify the research topic, internal audit as an aid to management and to enable the researcher to draw a logical conclusion, there is need to make guesses as solutions to the topic which are subject to acceptance and rejection are based on the result of the test.
HYPOTHESIS ONE
    H0: There is no relationship between the internal audit andmanagement.
    H1: There is a relationship between the internal audit andmanagement.
HYPOTHESIS TWO
    H0: Internal audit does not assist in the defection and prevention of waste andfraud.
    H1: Internal audit assist in the detection and prevention of waste and fraud.
     PURPOSE OF THESTUDY.
•    The purpose of the study is to determine the extent of co-operation between the internal audit andmanagement.
•    To ascertain the extent of co-operation between the internal auditor  and externalauditor.
•    To evaluate the extent to which internal audit helps in preventing waste andfraud.
•    To find out if internal audit is equipped enough to prevent an error proof workingcondition.
    SIGNIFICANCE OF THESTUDY.
The benefits of the study to:
The Internal Audit-
i)    Internal audit within an organization is effective for efficient work of the generalstaff.
ii)    The internal audit in an organization will help detect, minimize or eliminate fraud in anorganization.
iii)    Internal audit assist the management in the smooth running of the organization by complying with the policies, laws andregulation.
iv)    Internal audit in an organization will help to review and appraise the effectiveness,adequacyandapplicationofaccounting,financialand
other controls in order to promote effective control at the lowest possible cost.
v)    Whether an internal audit department could help to determine the reliability and integrity of financial and other data produced within the organization, thereby securing the jobs ofemployees.
The management of the organization-
i)    Management will experience an error free working environment maintained by internalaudit.
ii)    Management will enjoy the reduction or elimination of waste and fraud within theorganization.
iii)    The general staff will be effective anddedicated.
iv)    Management will enjoy a healthy relationship between it and internal auditors.
    SCOPE AND LIMITATION OF THESTUDY
This research work is to evaluate internal auditing in an organization using soap, detergent and household products company as a case study. The research work particularly focuses on the internal audit as an aid to management in themay and baker plc and drugfield specialty
LIMITATION OF THE STUDY
There are constraints encountered in carrying out this research work, this includes;
1.    TIMEFACTOR
This research work was conducted simultaneously with normal academic work within a short period of time in which some valuable information could be obtained.
2.    FINANCIALDIFFICULTY
In an effort to have a sufficient research material to be able to write extensively on the subject matter, the researcher was faced with some financial predicament considering high cost of not only education materials coupled with the high transport fare.
    DEFINITION OF TERMS AUDITING
It is defined as a process of carrying out an 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 Law andRegulation.
INTERNAL AUDIT
MILLICHAMP 1996, defined internal audit as “An independent appraisal of an organization for the view of the internal audit control system as  a service to the organization. It objectively examines, evaluates and reports on the adequacy of internal audit control as a contribution to the proper economic efficient and effective use of theresources”.
Internal audit reviews existing accounting system and related internal work. It assists in the implementation of new accounting systems. It identifies and draws attention to management weakness in control or measures which are unsaid to the organization. To investigate and eliminate waste and fraud, thereby ensuring the survival of theorganization.
INTERNAL AUDITOR
He is an employee of a particular firm as related to its operation. It is in itself an internal control which reports the effectiveness of the other controls.
Its objective is to help manager in discharging their responsibilities and to evaluate compliance with cooperate procedure within theorganization.
MANAGEMENT
It is a body charged with the responsibility of planning, directing and controlling of all the activities within the organization. Therefore management control is the process by which managers assure that resources are obtained and used effectively and efficiently in the accomplishment of the organizations goals (Anthony and Welsch,1974).