USES AND IMPACT OF AUDIT IN MANAGING MEDIUM SCALE COMPANIES IN NIGERIA

ABSTRACT

A lot of human, material and financial resources are trapped in medium scale businesses.  They must be properly guided to ensure efficiency and effectiveness.  Where audit succeeds in adding value to the growth and development of these companies, labour unemployment problems will be solved, there will be improvement in the standard of living and more profit will increase governments’ tax and value added tax (VAT) receipts as well as Gross National Product (GNP).  Auditing recently has been facing confidence problem especially in the area of corporate reporting.  Corporations in the United States of America and banks in Nigeria crashed even after audit report declared them healthy.  This research was based on the topic: Uses and Impact of audit in managing medium scale companies in Nigeria.  The objectives of the study include among others: To determine the need for the conduct of the audit in the management of medium scale companies; To examine the effectiveness of the auditors in the performance of their duties; To ascertain the relevance and adequately of accounting standards as well as its application by the auditors.  The significance of audit has not been fully appreciated in most medium scale businesses in Nigeria.  It is anticipated that the results of this study will serve as a practical tool to guide the shareholders in their assessment of the selfishness of audit; To ascertain these objectives, a survey research was carried out with respondents from two companies, Halden Nigeria Limited and Cogipar Nigeria Limited, both in Port Harcourt.  The study also formulated the frollowing hypotheses.  There is significant relationship between audit and cost reduction; There are significant problems facing the conduct of audit; Audit reports are of significance to the user of accounting information.  These hypotheses were tested with the chi-square statistic.  To all cases, 5% level of significance was used.  The findings are in agreement with the hypotheses as stated above.  Recommendations include companies adopting regular and periodic audits; auditors having expanded knowledge of the business of their clients so as to offer reasonable advise to them and others.