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The Impact of Internal Auditing on the Telecommunication Industry Essay

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Internal auditing is an independent appraisal functions established within an organization to examine, review and evaluate operations as a service to management. The internal audit department is an internal part of the organization and function under the policies established by management. An audit is not limited to the review of the management process in the accounting and financial areas alone. All department of the organization must be managed so that all can benefit from an independent objective review. The scope of internal audit spans the review of all the functions of the organization.

It includes technical, commercial and financial aspects that are secured, accounted for and managed within the organization. Moreover, the internal audit department implies that, the internal audit department should report not only on the accounting systems but on all aspects of the business. The internal audit department can operate as an effective managerial control. Firstly, it can examine the systems and controls introduced by management to ensure that they are being followed correctly. Secondly, it can review the efficiency of those systems and control and also advice on possible improvements them.

The auditor after successfully conducting an audit produces a report which is addressed to the management of the organization, in which he or she expresses his or her opinion on the truth and fairness of the financial statement. Vodafone has been successful in its operations over the past decade. It is the organization’s effective management which internal auditing played a major role. The study is to look at some of the problems faced by the Internal Audit department of Vodafone. 1. 1 STATEMENT OF PROBLEM

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Auditors are by statute required to be independent of management in the conduct of their audit assignment. However, this is not always so. Their problem emanates when management begin to influence their work. According to Adams Rogers (1994), the auditor is expected to be independent, objective and have high degree of integrity in reporting his opinion on the true and fair view of the financial statement, so that users of these financial reports can rely on them and believe that they come from credible sources. Auditors are presumed to be independent and objective as well as having personal integrity.

Considering the fact that users of financial statements rely heavily on the opinion expressed by auditors, one would expect that these users have confidence and credibility in the work of the auditors. Auditors sometimes face difficulty in getting the requisite information in the conduct of their audit work. For instance, management may withhold certain vital information necessary to conduct an effective audit. Finally, auditors face a problem of getting the necessary logistics in conducting their audit. Auditing firms may lack enough qualified personnel nd vital technological equipments to conduct the audit work effectively and efficiently. Anyway, it is the problems that Internal auditors encounter in the conduct of their audit work that the researcher looked for. 1. 2 PURPOSE OF THE STUDY In this study, the researcher intends to find out the benefit of internal auditing in the Telecommunication industry. Specifically, this researcher is to; Review the accounting systems and internal control used by the organization. a) What peculiar problem does the internal audit department of Vodafone encounter in the course of their work? b) Why internal auditors face these problems. ) What are the causes of these problems. d) The impact of technological invention on the audit work. e) Examine how internal auditors in Vodafone conduct special investigations. f) Ensure compliance with policies, plans, procedures, laws, regulations and reports and determine whether the organization is in compliance with them. 1. 3 RESEARCH QUESTIONS The work is to verify whether the internal audit department of Vodafone faces some challenges in the conduct of their work. The study will therefore answer questions like: a) What peculiar problems do auditors encounter in the conduct of their work? ) Why auditors face these problems? c) What are the causes of these problems? d) What impact do these problems have on auditors report? 1. 4 RELEVANCE OF THE STUDY The significance of this research is that the outcome would help the following: 1. State; Since Government is also a shareholder of Vodafone, this research aims at helping the state to know some of the problems faced by the internal audit department of Vodafone. 2. Students; This research will serve as a reference point of study to students who might be interested in investigating into the topic and other related topics. 3.

Staff; The staff of Vodafone will know the extent to which the internal audit department of organization has served management as a safeguard measure to efficiency and effectiveness in the running of the organization. 4. Internal audit department; Also, the researcher is optimistic that through this study shortcomings or areas which have been neglected would come to view and this will undoubtedly assist the internal audit department in the discharge of its duties more effectively. 1. 5 LIMITATION OF THE STUDY The researcher in undertaking this study will be saddled with a lot of hindrances.

Firstly, certain vital information were difficult to obtain from the company. Lack of co-operation from staff of Vodafone to release information about the institution and unavailability of textbooks, journals and magazines also contributed to some failures about this write-up. Another major hindrance will be the financial constraint. There will be insufficient fund for transport fares to and from the research centers, for typing and printing of the scripts and expenditures that will put a lot of stress on the researcher and constraining the researcher to work within his limited resources.

Besides, the researcher will have to combine the project with academic work which will sometime be difficult and frustrating. In spite of the above limitations, the researcher hopes to come out with a comprehensive material that will be the benefit of all. Due to the numerous telecommunication industry in the country the researcher will not travel across the length and breath of the nation to gather the relevant data on the topic. The researcher therefore was delimited in choosing Vodafone as the case study. 1. 6 ORGANIZATION OF STUDY

This study will be made up of five chapters. The first chapter will deal with the general introduction to the study which will cover the background of the study, a statement of the problem, the objectives and significance of the study and the limitations and summary. Chapter two will deal with the literature review which includes the introduction and historical background of auditing.. Chapter three will also deal with research methodology which includes; the study area, the population, the sampling procedure, the research instrument and administration of the instrument.

Chapter four will deal with presentation and data analysis. Chapter five will deal with summary, conclusion and recommendations. 1. 7 SUMMARY Internal audit is an independent activity established by management to examine and evaluate the organization’s risks management process and systems of control and to make recommendations for the achievement of the objectives of Vodafone. It is in this view that chapter one will seek to establish the benefits of internal auditing in the telecommunication industry with Vodafone as the case study.

The researcher indentified independence, lack of logistics and getting requisite information from management as a statement of problem. The state and the staff were also indentified as some of the benefactors of this research. Furthermore, the researcher also explained, limitation, and the organization of the research. CHAPTER TWO 2. 0 INTRODUCTION Internal audit is relatively new profession and its role has been subject to significant changes as organizations have changed.

Initially it was an off shoot of the accounting Profession, with a primary focused on financial control and compliance. Chapter two seeks to look at the literature review focusing on many things relating to internal auditing. 2. 1 HISTORICAL BACKGROUND Whittington and Pany (2004) explained that internal audit has evolved to meet the needs of business, governmental and non-profit making organization. Originally, internal audit became very important when managers of large companies recognized that yearly audits of financial statement be Certified Public Accountant (CPAs) were not adequate.

A need existed for timely employee involvement beyond that of the CPAs to ensure accurate and timely financial records and to prevent fraud. Researchers such as Kent (1961) have agreed that it was developed to take over some of the functions of the external statutory audit. Before the advent of internal auditing, the statutory audit was used to advocate organizations internal systems. As a result of expansions in terms of organizations size and their volume of recorded transactions, the statutory audit became an inadequate means of evaluating such controls.

As statutory auditors strive to free themselves of this heavy and dangerous responsibility, management was compelled to take primary responsibility for ensuring that the internal control systems and procedures were in place and working efficiently. The internal audit function evolved to assume this responsibility. The economic environment at the early parts of the last century also served as an audit impetus to the emergence of internal auditing. The major and perhaps the famous internal audit technique in those early days was a surprise visit.

Using this technique, the internal audit will arrive without any prior warning so that the officer concerned is unable to prepare for the auditors visit. This proved to be an effective means off detecting fraud and error and was often used for those parts of the internal control systems where assets were vulnerable to misappropriation. However, over a period of time the use of surprise visit decreased in importance as management recognized that the establishment of a self regulating internal control system, with inbuilt checks and balances written procedures were a more efficient means of detecting fraud and error than the surprise visits.

Normanton (1966) 2. 2 DEFINITION OF AUDIT The Audit Practice Committee (1989) defines an audit as the independent examination of, and expression of opinion on, the financial statements of an enterprise. Also, I. T Okai (1996), defines an audit as an independent examination of and expression of opinion on, the financial statements of an enterprise by an appointment and in compliance with only relevant statutory obligation. Furthermore, Woolf (1994) defines an audit as a process carried out by suitable qualified

Auditors whereby the accounts of the business entities, including limited Companies, charities, trust and professional firms, are subjected to scrutiny in such detail as will enable the auditors to form an opinion as to their truth and fairness. 2. 3 DEFINITION OF AUDITING Glezen William (1994) defines auditing as a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between the assertions and establish criteria and communicating the results to interested users.

The assertions are the sensations by managements that are embodied in financial components records or systems. Arens A. and Loebbeckke J (1994) also define auditing as the accumulation and evaluation of evidence about quantifiable information on an economic entity to determine and report on the degree of correspondence between the information and established criteria. The criteria are the Generally Accepted Accounting Principles. 2. 4 QUALIFICATION OF AUDITORS

The Companies code 1963, Act 179, section 279, sub-section (1) specify that “a person shall not be qualified for appointment as an auditor of a public company not withstanding that he/she may have been appointed as an auditor thereof while it was a private company, unless he is under the chartered accountant act, 1963(Act 1700) a member of the institute of chartered Accountant: and is not disqualified under subsection (2) of this act. 2. 5 REMUNERATION OF AUDITORS

The Companies Code 1963 (act179) section 134, subsection (10) stipulate that where an auditor is appointed by the directors or by registrar, his remuneration may be fixed by the directors or registrar for the period expiring at the conclusion of the next annual general meeting of the company. Where the auditor is appointed by the members of the annual general meeting, his remuneration shall be fixed by an ordinary resolution of the company or in such a manner as the company by ordinary resolution may determine. Any payments towards auditors’ expenses shall be deemed to be included in the expression remuneration. . 6 REMOVAL OF AUDITORS According section 134 of the code, a resolution to remove an auditor shall not be effected unless: a) It is passed at an annual general meeting of the company to carry out this. b) Written notice shall be given to the company of the intention to move it not less than thirty-five days or more before the next annual general meeting at which it is to be moved. c) The company gives its members notice of such resolution at the same time and in the same manner as it gives notice to the meetings not less than twenty one days before the meeting. ) The auditor to be removed by the resolution is entitled to be orally head on the resolution at the meeting. e) Any resolution passed, to remove or continue with the services of an auditor shall not take effect until the conclusion of the annual general meeting. 2. 7 CATEGORIES OF INTERNAL AUDIT Internal audit is often viewed as falling into three major categories namely, financial internal audit, operational internal audit and management audit. These have been identified and explained by Okai (1996). a) FINANCIAL INTERNAL AUDIT

This category of internal audit embraces the conventional tasks of examining records and evidence in order to detect errors and prevent fraud. It includes reviewing routine financial and management reports, looking for trends within figures, thus being able to identify any significant variations from the norm. b) OPERATIONAL INTERNAL AUDIT This also covers the examination of control procedures and whether or not they are being adhered to. Such examination would seek to identify areas for improvement in efficiency, as well as weaknesses in internal control and internal check. ) MANAGEMENT AUDIT This relates to the review and evaluation of the management structure within the organization and the performance of managers as a group or individually. It includes the appraisal of the environment for the exercise of management skills as well as measurement of external management performance against established criteria. 2. 8 THE MANAGEMENT PROCESS The management process essentially involves getting things done or goals pursued through people employing various resources.

It includes planning with its goals and objective sitting function, organizing, leading, motivation and controlling. For the pursuit of every business goal, various combinations of resources in land, labor and capital need to be used. The manager will therefore consider in respect of the various aspect of the tasks needed to be executed in pursuit of the objects, the grades of labor required the extent of automation describe and consequently the type and number of machines and equipment required. In addition to this, the physical and financial resources will be determined and obtained.

The manager therefore establishes the main various physical and financial resources needed for carrying out the various tasks. The process of management cannot be complete without proper internal controls in every sphere of human endeavor. The need for a periodic appraisal of performance in the light of given standards cannot be overemphasized through the medium of financial statements and supplementary statistic of data technical test and comparisons. The internal audit department therefore needs to be establish by management, since, it plays a major role in the management process. . 9 NEW DESCRIPTION The new description of internal auditing as promulgated by the Institute of Internal Auditors is that “internal auditing is an independent, objective assurance and consulting activity designed to add values and improve an organization’s operation. The emerging internal auditing demands a greater understanding of the operating environment, creativity and good management skills. The emerging internal auditor must therefore be customer driven. He is therefore a management partner and a consultant.

In this age and perhaps for the future, the audit functions whether statutory prescribed or private would be an important element in the management of every enterprise. 2. 10 THE AUDITORS ROLE AND EXPECTATION IN THE MANAGEMENT PROCESS In a process where the manager or the chief executive officer is distanced from the normal day to day routines, as is the case with any business and has to rely on the collective action of various people in pursuit of the enterprise goals, there is the need for a mechanism through the medium of which management can ensure that the assets of the enterprise are safeguarded and its records accurate and reliable.

Management does this through the formulation of policies and the establishment of procedures and control to govern transaction records. Thus there will be policies with regard with to purchase of goods and services and procedures for executing purchase transaction as well as related records keeping. Since every system of control has the element of internal check where by one person’s work has to be approved or confirmed independently by that of another; the system can be expected to be self correcting.

The internal audit function forms part of the overall systems of controls established by management to keep itself regularly informed on the extent to which procedures and controls are being adhered to and for that matter whether appropriate records are being kept in accordance with the expectation of management. It is also the internal auditors function to continuously review the system of controls and procedures with the view of making recommendations for improvement and changes that may necessary. The internal auditor would normally be a full fledged professional and would therefore xpected to bring to bear on his work that level of skill and diligence associated with people of his caliber. The internal auditors appointment is accompanied by job description couched in every broad terms. Management will therefore expect the internal auditor to plan and develop programs that would enable him achieve the desired coverage of records and transactions from period to period. Coombs and Jenkins(1994). Since the internal auditor is an officer or employee of an organization, his job is rather delicate and sensitive one, given the fact it involves reviewing and reporting on the work of colleagues, peers or even seniors.

Conflicts between internal auditors and other officers are not uncommon. Though a host of these conflicts often stem from a misconception of the auditors conduct, it has not helped in assuaging these suspicions. The internal auditor can help remove these suspicions by approaching his assignment with an open mind objectivity. Very often internal auditors slip into overblown perceptions of their position in the organization and therefore try to intimidate the people whose work is reviewed.

This kind of approach can only lead to friction as it has done several places at an atmosphere that the auditor cannot expect or obtain the level of cooperation needed for his work. It therefore the expectation of management that internal auditors carry out assignment by seeing himself just as another officer the organization. By virtue of it role in confirming or proving the accuracy of work done by others, the audit function could be regarded as part of the system of internal checks. Internal audit responds must therefore go beyond mere elimination of errors and deficiencies.

It must contain positive recommendation for improvement that may be necessary with suggestions. 2. 11 INTERNAL AUDITING STANDARDS Standards according to the oxford dictionary is an exemplary mode, measure of quality of value, a target of excellence to be attained, and agreed universal principle. The Committee of the Consultative Committee of Accountancy Bodies (C. C. A. B) defines auditing standards as a term employed to denote an authoritative guidance which prescribes the basic principles and practices that members auditing practicing bodies are expected to follow.

Many reasons contributed to this development of audit standard and these include pressures such as: a) Allegation of poor standards (in practice ) of audit (external and internal ) b) Reviews of existing practices c) A desire for conformity with others d) Striving for professionalism e) A fear of external control and the preserved need for self regulation Many specific objective and benefits of internal auditing standard can be put forward as follows: a) To define an acceptable standard b) To establish a bases for guidance for old and new auditors ) To determine responsibilities for those with a duty to provide and operate an effective internal unit The standard in internal auditing seeks to control quality and to report audit. The Controller General of United States (1994) government auditing standards. 2. 12 QUALITY CONTROL STANDARDS Professor Donald H Taylor (1979) explains that the statement of quality control standards contains nine suggestions on how firms can effectively implement a system of quality control and improve their practices. They are as follows: ) Independence- independence in both fact and appearance shall be maintained at all organizational levels b) Assigning personnel to engagements- personnel assigned audit engagement should have the degree of technical training proficiency required. c) Consultation- auditors to an extent should consult and seek assistance from persons who have appropriate levels of knowledge, competence, judgment and authority d) Supervision- the conduct and supervision of the work at all organizational levels should meet the firm standard of quality ) Hiring- personnel who posses the appropriate characteristics should be hired to enable them perform competently. f) Professional development- personnel should participate in professional development activities to give them the knowledge to fulfill their assigned responsibilities. g) Acceptance and continuance of clients- firms should not accept or retain client or staff whose mode operations lack integrity. h) Inspection- firms should ascertain thorough inspection that the elements of quality controls are being effectively applied. 2. 3 REPORTING The primary aim of establishing an internal audit unit by the management of an organization is for the unit to review the organization’s internal control system as a service to management, by objectively examining and evaluating and then reporting on the adequacy of the system of control as a contribution to the proper, economic, efficient and effective use of resources. Reporting on the part of the internal auditor to management can therefore be viewed as one of the important essential elements of the internal audit function.

Millichamp (2002) and Whittington (2004) agree that the internal auditor must produce timely, accurate and comprehensive reports to management on a regular basis, based on sufficient, relevant and reliable evidence. The report should state the scope. Purpose, extent and conclusion of the conclusions of the internal audit assignment; make recommendations which are appropriate and relevant and which flow from the conclusions and acknowledge the action taken, or proposed by management. Whittington and Pany (2004) further describe the purposes of internal audit reports.

They identified the purposes of internal audit report as follows: a) To provide management with an opinion on the accuracy of the internal control system. b) To inform managements of significant audit finding, conclusions and recommendations. The specific objectives are: a) To prompt management action to implement recommendations for change leading to improvement in performance and control and b) To provide a formal record of point arising from the internal audit assignment and, where appropriate, proper arrangements reached with management. 2. 4 THE STANDARD OF AUDIT REPORTING These standards are guidelines established by the American Institute of Certified Public Accountants (A. I. C. P. A), which are used to write audit report. They are as follows: a) They shall state whether the financial statement are presented in accordance with generally accepted accounting principles. This standard establishes generally accepted accounting principles as a criterion against which general purpose financial statements are to emanated in an audit performed in accordance generally accepted auditing performing standards. ) The reports shall identify those circumstances in which such principles have been consistently observed in the current period in relation to the proceeding periods. c) Information’s disclosed in the financial statement are to be regarded as notably adequate unless otherwise stated in the reports. d) The reports shall either contain an expression of opinion regarding the financial statements, taking as a whole or an assertion to the effects that an opinion cannot be expressed. When an overall opinion cannot be expressed, the reasons therefore should be stated.

According to A. I. C. P. A, before 1940 it was common to find differently worded audit reports issued by different auditors. This led some confusion among financial user as to whether different auditors were providing different levels of assurance. To avoid this confussion, a statement form of audit report was adopted. The standard audit report consist of: a) A title containing the word independent b) An opening or introductory paragraph (a description of the representation of financial statement and a statement that they are the representations management ) A scope paragraph (description of the auditors responsibility to detect material ) misstatement and the general nature of audit procedures and a statement as to the adequacy of the procedures d) An opinion paragraph (auditor’s opinion regarding the fair representation of the financial statements. ) 2. 14 SUMMARY The function of internal audit has its root from the start of the twentieth century. In an attempt to research into the problem under discussion, a number of personalities, books, and periodicals were consulted to make the problem at stake a valid one.

This chapter is therefore grouped under the following sub-headings: Introduction, historical background of auditing, definition of audit, definition of auditing, qualification of auditors of a public company, remuneration of auditors, removal of auditors, management process, new description, auditors role and expectation in the management process, internal accounting standards, quality control standards and standard of audit reporting. CHAPTER THREE RESEARCH METHODOLOGY 3. 0 INTRODUCTION

This chapter is statistical in nature and hence a detailed analysis of data was made. To ensure this, an examination of primary and secondary data was employed. By primary data collection, questionnaires and interviews were used to get from the staff of their internal audit department and the management staff. Secondary data source included review of relevant literature on internal auditing from the library and the internet. 3. 1 RESEARCH DESIGN The research design chosen for this study is the descriptive survey.

The design is most appropriate since it helps researchers to attempt to describe an existing situation by asking respondents to complete questionnaire so as to draw meaningful conclusions. Gay (1992) submits “descriptive survey involves the collection of data to answer questions concerning the current status of the of study” Frankel and Wallen (2000) have identified three difficulties associates with this design. They include: a. The difficulties in ensuring that questions to be answered and clear b. Getting respondents to answered thoughtfully and honestly . Finally the difficulty in getting sufficient number of questionnaire completed and returned In spit of all these demerits Frankel and Wallen (2000) believed that the descriptive survey has the potential to provide a lot if information from quite a large sample of individuals. The researcher took the necessary steps such as ascertaining the validity of the questionnaire items and directly administered the questionnaire in other to minimize the difficulties identified. 3. 2 POPULATION The population consisted of workers of Vodafone.

There were about twenty department and each has some number of workers . some of the department were audit, account, human resource management, switching, test (MDF), transport , cables(underground and overhead), care for you and pay phones. 3. 3 SAMPLE SIZE The sample size was mainly the Vodafone. The sample consisted of the internal audit department and staff of management. 3. 4 SAMPLING PROCEDURE Vodafone was selected based on the non- probability sampling procedure called the purposive sampling and convenience sampling

Convenience sampling procedure was used for the internal audit department because of their small number. Internal auditors were interviewed by the researcher in collaboration with their branch and area managers. 3. 5 RESEARCH INSTRUMENT The research instrument used for the study was the questionnaire. The was questioner made up of open ended and close ended items. The open-ended items had no alternative answers or responses and respondents were expected to supply the appropriate responses to the items.

The open-ended questions were adopted in anticipation that useful information which were not covered by the questioner might be volunteered. Like the open ended type, the close ended type provided respondents with optional answers from which they were to choose the appropriate one(s). The questioner consisted of six (6) main sections: Section (A) dealt with the background information of the respondent such as gender and educational background. Section (B) dealt with the peculiar challenges auditors face in the performance of their work.

Various challenges were highlighted and respondents were to answer “YES” and “NO” or sometimes with few open ended sections, which were to elaborate on previous questions. Section (C) dealt with causes of these challenges. Here respondent were to indicate what contributes to these challenges. Section (D) concentrated on the impact of recent technological inventions on the audit work Also, section (E) dealt with ascertaining the co-operation level between the internal audit department and management.

Finally, section (F) dealt with measures to ensure effective auditing. 3. 6 DATA COLLECTION PROCEDURE The researcher administered the questionnaire personally. The researcher introduced himself and presented a copy of an introduction letter from the Accountancy Department. This was done with the view of winning respondent’s confidence. Subsequently, the researcher explained some aspects of items in the questioner to respondents who responded to it themselves. A period of one week was allotted for the administration of the questionnaire.

Despite the problems encountered in getting the study done, the researcher managed to get all twenty questionnaire administered consisting one hundred percent (100%). 3. 7 DATA ANALYSIS The data obtained from internal audit department and management was analyzed separately. Responses obtained from each questionnaire was first edited, scored and coded. In some instances, a combination of data from both sources was used in answering some research questions. The data was statistically analyzed. Descriptive statistics was employed. In analyzing the biographic data, frequencies and percentages were used.

Frequency and percentage tables were drawn to summarize the responses obtained for each questionnaire item. According to Sarantakakos (1993), “the frequency and percentage tables enabled the researcher to gain an overall view of the finding”. 3. 8 SUMMARY This chapter has dealt with the methods and techniques used by the researcher to gather information for the study. The issues treated were, research design, population of the study, sample and sampling procedure, research instrument, data collection procedure and data analysis. CHAPTER FOUR ANALYSIS AND FINDINGS OF THE STUDY . 0 INTRODUCTION This chapter highlights the data that was collected for the study. The analysis includes preliminary data and the main data. PRELIMINARY DATA The preliminary data deals with the background information of the respondents which includes the staff of the internal auditing department and the management. 4. 1 SEX OF RESPONDENTS In order that the researcher come out with the research findings, information was gathered from both male and female employees of Ghana telecom, Takoradi. All twenty questionnaire were retrieved from respondents.

Table 1 below shows the males to females. Table 1 Sex of respondents |Gender |Frequency |Percent | |Male |15 |75 | |Female |5 |25 | |Total |20 |100 |

Source: Field From table 1, out of the twenty (20) respondents, fifteen (15) were males which represent 75% of the respondents and five (5) were females which also formed 25% of the respondents. It can therefore be deduced from this table that the internal audit department of Vodafone company ltd is a male dominated department. 4. 2 QUALIFICATION OF RESPONDENTS Table 2 Qualification of Respondents Items |Frequency |Percentage | |First Degree |4 |20 | |Postgraduate |7 |35 | |Professional |4 |20 | |HND |5 |25 | |Totals |20 |100% |

Source : Field Form table 2; Four (4) of the respondents are first degree holders, which represent 20% of respondent. Seven (7) of the respondent representing 35% are post graduate, four(4) of the respondent, which represent 20%, are professional certificate holder in ICA and ACCA. Five (5) respondents, which represent 25%, are HND holders. It can therefore be construed that the staff of the Internal audit department of Vodafone company ltd is a well qualified staff since all the respondents are tertiary certificate holders. 4. 3 POSITION HELD BY RESPONDENTS Table 3 Position held by respondents Position |Frequency |Percentage | |Senior manager |1 |5% | |Senior auditors |3 |15% | |Assistant Manager |1 |5% | |Accountants |4 |20% | |Audit Assistant |11 |55% | |Totals |20 |100% | | | | | Source: Field

From table three, one (1) of the respondent, which represent 5% is a senior manager, three (3) of the respondent, which also form 15% are senior auditors, one (1) of the respondent which represent 5% is an assistant manager. Accountant constituted four (4) of the respondent, representing 20% while eleven (11) of the respondent which represent 55% are audit assistant. In view of the number and position held by the workers of the internal audit department, it can be deduced that the internal audit department of Ghana Telecom is a well staffed department. 4. 4 YEARS OF SERVICE The researcher wanted to find out the experience level of the respondents by using the number of years that respondents have been in service. Table 4 Years of service Items |Frequency |Percentage | |1-5 |3 |15 | |6-10 |4 |20 | |11-15 |4 |20 | |16-20 |6 |30 | |20+ |3 |15 | |Total |20 |100% | Source: Field From table 4, three (3) of the respondents, which represent 15%, have been in the service between one to five years.

Four (4) of the respondents, which form 20. 00%, have worked for six to ten years. Four (4) of the respondents representing 20. 00% have been in the service from eleven to fifteen years. Six (6) of the respondents, which represent 30% have bring in the service from sixteen to twenty. Three (3) of the respondents which represent 15. 00% have worked for more than twenty years. Since a majority of the respondent have worker between 16-20 years, it can be deduced that the internal audit department of Vodafone company ltd as a number of experienced staff. ANALYSIS OF MAIN DATA 4. 5 PROBLEMS AUDITORS ENCOUNTER IN OBTAINING INFORMATION AND EXPLANATION

Table 5 Problems auditors encounter in obtaining information and explanation |Response |Frequency |Percentage | |Yes |17 |85 | |No |3 |15 | |Total |20 |100 | Source: Field The study revealed that 17 of the respondents, which represent 85% encounter problems in trying to obtain information and explanations while three (3) of the respondents do not encounter problems.

The respondent indicated that, errors such as omission, commission, principle, clerical, compensating in the account books and refusal by some audited department to furnish them with adequate information for effective internal auditing were some of the problem faced by the department. 4. 6 DISAGREEMENT WITH MANAGEMENT IN RELATION TO THE AUDIT WORK The study revealed that more than half of the respondents have ever disagreed with management in relation to the audit work. Matters that usually bring about these disagreements are mentioned below: a) Failure to comply with accounting and financial regulations b) Non-existence of internal control c) Failure to comply with audit observation d) Embezzlement of fund by clients on piece meal From the respondents, these disagreements are resolved by: a) Confirming the results of findings with management. ) Referring clients to the relevant financial requirement c) Writings and discussions d) Teaching clients modern technique and written regulations e) Referring to the sources of information f) Meetings and discussions and ensuring that standards are followed. g) Reporting to top management 4. 7 RELIANCE OF INTERNAL AUDIT WORK BY EXTERNAL AUDITORS In response to the question, do external auditor relay on your work? The respondent indicated that external auditors do relay on the work of the internal audit department when the external auditor is satisfied with the compliance test carried out. The compliance test may include ascertaining the following; a) The degree of independence. ) The task and responsibility assigned to the internal auditor c) The professional competence of the internal audit staff. d) The control and supervision of work e) The quality of work done by internal audit f) The adequacy of internal audit documentation of recording and evaluating system g) The extent and coverage of internal audit h) The nature and frequency of, and response to the report issued by internal auditor. The study revealed that external auditors rely on the work of internal auditors where they find it appropriate that the above provisions are met by the internal auditor. 4. 8 TYPE OF DEPARTMENTS AUDITED Table 6 Type of departments audited Departments |Frequency |Percentage % | |Cables |9 |45 | |Care for you |2 |10 | |Account |9 |45 | |Total |20 |100 | Source: Field Table 6, shows that each nine (9) of the respondents, which represent 45%, audit cables and account department and two (2) of the respondents, which represent 10%, audit the care for you department. It can therefore be construed that the cables and account department are the largest department in Vodafone company ltd since majority of the respondents audit them. 4. 9 CORPORATION LEVEL BETWEEN INTERNAL AUDIT DEPARTMENT AND MANAGEMENT Table 7 Corporation between internal audit department and management Response |Frequency |Percentage % | |Good |20 |100 | |Bad |- |- | |Total |20 |100 | Source: Field From table 7, all of the respondents indicated that the corporation level between the internal audit department and management was good. Management cooperates with the internal audit department by exercising their responsibilities primarily by the institution and operation of an effective system of internal controls which may include internal accounting controls, management control and internal audit. 4. 10 THE INFLUENCE OF TECHNOLOGICAL INVENTIONS ON AUDIT WORK Table 8 |Response |Frequency Percentage (%) | |Yes |18 |90 | | No |2 |10 | |Total |20 |100 | Source :Field The study revealed that eighteen(18) of the respondents, which represent 90%, are influenced by technological inventions on their audit work while two(2) of the respondents, which represent 10% are not influenced. It can therefore be construed that the use of technological inventions such as the use of computers and audit programmes ease the audit work. 4. 11 EXECUTION OF AUDIT ASSIGNMENT Table 10 Item |Frequency |Percentage (%) | |Manual |- |- | |Electronic |- |- | |Combine |20 |100 | Source: Field From table 10, the entire respondent indicates that a combination of manual and electronic was used to conduct the audit work.

It can therefore be construed that the internal audit of Vodafone copany ltd uses both manual and computer audit programme to conduct their audit work. 4. 12 ADEQUACY OF PERSONNEL AND LOGISTIC Table 11 |Item |frequency |Percentage (%) | |Good |20 |100 | |Bad |- |- | Source: Field From table 11, the entire respondents indicated that the adequacy of personnel and logistics of the internal audit department was good.

It can therefore be deduced that the internal audit department have the necessary equipments and qualified staff to conduct an effective audit. 4. 13 MEASURES TO ENSURE EFFECTIVE AUDITING The researcher wanted to know from the respondents the measures that can be adopted to ensure effective auditing. The following recommendations were given by the respondents; a) Provision of better remuneration b) Provision of adequate logistics c) Effective and efficient internal control systems d) Ensure that auditors are independent of management influence. e) Orientation course and seminars for auditors. 4. 14 SUMMARY Chapter four highlighted on the data that was collected for the study.

The researcher therefore analyzed the findings under preliminary data and main data. The preliminary data included the sex of respondents, qualification of respondents and position held by them. The main data was also analyzed under the following: Problems auditors encounter in obtaining information and explanation, disagreement with management in relation to the audit work, reliance of internal audit work by external auditors, the type departments audited, corporation level between the internal audit department, the influence of technological inventions of audit work, execution of audit assignment, adequacy of personnel and logistic and measures to ensure effective auditing. CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION 5. 0 INTRODUCTION The purpose of this study has been to find out the challenges faced by internal audit department of Takoradi Vodafone company ltd in the conduct of their work. The data collected for the study were analyzed and discussed in the preceding chapter. This chapter highlights the summary of the findings made and also gives recommendations by the researcher. 5. 1 SUMMARY The primary concern of this study was to find out; a) What peculiar problem does the internal audit department of Vodafone company ltd encounter in the course of their work b) Why internal auditors face these problems c) What are the causes of these problems ) The impact of technological invention on the audit work e) The effect of problems faced on their audit work f) The corporation level between management and the internal audit department g) Examine how internal auditors in Vodafone company ltd conduct special investigations h) Ensure compliance with policies, plans, procedures, laws, regulations and reports and determine whether the organization is in compliance with them. The researcher reviewed relevant literature on the study. The methods used in collecting information for the study included both primary and secondary sources. The researcher analyzed the data collected. It was realized from the study that: ) The employees of the firm were Tertiary certificate holders and they held positions such senior managers, senior auditors, assistant managers and accountants. b) The internal audit department of Vodafone company ltd use only electronic to obtain information. They usually included enquires, surprise visit, computation and observation. c) In obtaining information and explanations for the audit work, the internal audit departments encounter problems such as refusal of management and the various heads of department to furnish them with accurate information. d) Disagreement between management and the internal audit department occurs when failure on the part of management to comply with accounting and financial regulations and non-existence of internal controls.

Problems of such nature are resolved through meetings and discussions, reporting to top management and ensuring standards are in place and being complied. e) The adequacy of the personnel and logistics of Takoradi Vodafone company ltd were deemed good. f) Technological inventions such as the use of computers and accounting software ease the audit work. g) It was also realize that external auditors some times rely on the work of the internal audit department when there are satisfied with the compliance test carried out. 5. 2 CONCLUSION It can be deduced from the findings of the research that the internal audit department of Vodafone company ltd do encounter problems in the conduct of their work. This problem is resolved in conjunction with management.

The “surprise visit” (Normanton-1966) is also often used to conduct special investigation. Standards, policies, plans, procedures, laws, regulations and reports are also in place and complied with. 5. 3 RECOMMENDATIONS With respect to the above findings, the researcher would like to recommend the following: a) The various departments audited by the internal audit department should be vigilant in the recording and preparation of accounts to prevent errors such as omission, commission, principle, clerical and compensating. b) Vodafone company ltd Takoradi, should employ more professional certificate holders as auditors in accordance with a provision in the company’s code. ) The internal audit department should ensure that their objective approach to audit assignment is not affected by any personal relationship with management. d) Auditors are to advice their clients on the essence of employing qualified personnel, preparing and keeping good records, preparing requisite documents, ensuring that staff on schedule is always available to facilitate audit work and training of staff to update their skills. e) Management should continue to co-operate with the internal audit department to give them all the necessary information and explanations necessary for the purpose of audit assignment. f) Management should comply with set standard to avoid disagreement with the internal audit department.

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