Arabian Journal of Business and Management Review (OMAN Chapter) Vol. 2, No.5, Dec.

2012

AUDITING AS A TOOL FOR ACCOUNTABILITY FOR EFFICIENT AND

EFFECTIVE SCHOOL ADMINISTRATION
Dr (Mrs.) Ezeani Nneka Salome
Department of Educational Foundation Ekiti State
University, Ado- Ekiti, Ekiti State

Oladele Rotimi
Adekunle Ajasin University, Akungba Akoko,
Ondo State

Abstract
School administration in Nigeria is primarily concerned with rendering services that is essential
to all citizens; hence a career attitude to accountability for effective auditing is needed for
efficient and effective administration. This study tries to find out what school audit is all about,
the role of audits and the difference that an audit can make towards accountability, especially in
school administration. The need for this study also arose to correct a misconception that school
account are not meant to be audited and to restore confidence in parents and guidance that
money spent on educating the child is not embezzled. This study employed a descriptive design.
The researchers found out that lack of: technical competence, independence and inadequate
level of resources do directly affect the performance of the school audit. Conclusively, intensive
and regular training programmes should be mounted for school accountants and auditors, and
there should also be proper delegation of duties.
Key words: Auditing, Accountability, School Administration, Auditor
Introduction
Organization all round the world be it financial, educational, or otherwise needs auditing
for proper assessment of their financial statements. In order to achieve set out goals and
objectives, resources must be properly managed to get the profound results needed.
Auditing in the Nigerian educational system is relevant hence effective financial
management in any school leads to the success and growth of the school. Auditing as a tool for
accountability for efficient and effective school administration is a clear term study which will
educate us on the importance of school audit and how it will affect the child if mismanagement
of funds eventually occurs. Parents and guidance who send their wards to school will be rest
assured that with the help of school audit the money they pay for the education is not wasted.
During the course of this study, the researchers noticed that insufficient technical
competence, the degree of independence and the level of resources are the core problems that
lead to mismanagement of funds in an institution. This means that in carrying out a school audit,
the accountants (auditors) should be able to evaluate the controls in which management has
currently put in place and assess them to know if it is effective or efficient. It is upon this ground
that the study intends to find out whether auditing is a tool for accountability of efficient and
effective school administration.
The main objective of this study is to determine whether auditing is a tool for accountability,
efficient and effective school administration.
Specifically, the study intends to:
1

Ascertain the role of audit in school administration.

Find out the qualities of a school auditor.
Determine the need for accountability in school auditing.
Identify ways the accountants used in defrauding the schools.
Find out the factors militating against effective and efficiency in school audit.
Ascertain the areas of audit risk in schools.
Examine reasons for audit queries in schools.
The findings from the study will be of immense benefit to the following
people: School Administrators, parents and the general public.
School Administrations: School audit will assist the administrators delegate
resources appropriately and pursue a defined objective for the growth of the
school.
Parents and Guidance: Parents and guidance who pay for their child to be educated will know
how their hard earned money is been spent and how the future of the child sent to school is been
catered for.
General Public: It will enlighten the general public on the effect of
mismanagement of school funds and how it affects the child and also inform
them on how school audit are carried out.
REVIEW OF RELATED LITERATURE
Concept of Auditing
Auditing is the act of conducting an audit. According to Public Sector Auditing Standards,
a term Audit include both financial and performance audit. The standard goes on to explain
financial audit as embracing.
The audit of financial statement in order to provide reasonable assurance on whether the
financial statement of an organization presents a fair financial position of the organization flows
and is in conformity with the generally accepted accounting principles, and applicable laws and
regulations and the evaluation of the soundness of internal control system of the audited
organization.
Audit management is those actions taken by audit firms to ensure that audits are carried out
economically and efficiently, thereby, reducing the risk of litigation for negligence (Dury,
1987).As suggested by Eze (2008), reliable accounting and finance assist the society in
allocating resources in an efficient manner. The primary goal of any economic system is to
allocate limited capital resources to the production of goods and services for which demand is
great.
Auditing may be defined as a systematic investigation and appraisal of transactions
procedures, operations and result in financial statements (Anichebe, 2010). They further stated
that the main purpose of auditing is to determine the degree of adherence to the prescribed
criteria and to express opinion thereon.
Generally, auditing as a profession can be defined as an independent examination of 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. On the
other hand, performance audit is defined as an objective and systematic examination of evidence
for the purpose of providing independent assessments for the public sector organizations,
programme, projects and service delivery. Also, it outlines the assessment of the financial
efficiency and effectiveness with which the resources of an entity had been used in achieving

results. However, for auditing to be a tool for effective and efficient management it has to
identify the functions, evaluate and monitor some specific controls within the bound of internal
control system.
Auditing Classification
Auditing scope was widened extensively in the recent past that an attempt to provide an
exhaustive classification becomes impossible. However, for the purpose of this study auditing is
classified into two groups, thus:
a.
Statutory or external audit and,
b.
Internal Audit.
Statutory audit is the audit of an enterprise compulsorily required under the provision of an
Act or Degrees or Law of the Land (Aguolu, 2004). Statutory audit (Anichebe, 2004), is a type
of audit imposed by statute which is carried out within the enterprise as a result of being
compulsorily required by legislation. Auditing of schools as contained in the provision of CAMA
1990, auditing of banks as required under BOFIA, auditing of insurance company are all
examples of statutory audit.
In the view of Nwankwo (2006) and Aguolu (2007), internal control is defined as the set
of accounting and administrative controls and practice that help to ensure that approved and
appropriate decision are made in an organization. Auditing standard of England and Wales sees
internal control system as the whole system of controls, financial and otherwise, established by
the management in order to carry on the business of the enterprise in an orderly and efficient
manner, safeguarding its assets and secure them as safely as possible and also the completeness
and accuracy of the record. It comprises both internal checks and internal audit. Ezeani (2011)
citing Ezinando (2005) emphasized that one basic principle of auditing is that it must serve as a
tool for better performance.

i.
ii.
v.
vi.
vii.
viii.

Objectives of Audit in Schools

Originally, auditor carries out his duties from his respective classification. However,
objectives of most conservative audits are to ensure effectiveness in a good attainment and
efficiency in resource allocation and utilization.
Towards this, the following specific objectives are addressed:
To secure the continued maintenance of soundly based system of controls within each area of
responsibility which in this case is the schools.
To evaluate the use of resources in the pursuit of defined objectives of the school.
iii.
To assess adherence to budgetary provisions/operational guidelines.
iv.
To review compliance with statutory and regulatory procedures.
To ensure continuous examination of accounting books, store and personnel records with a view
to detecting frauds, errors and mistakes for corrective actions.
To vouch the integrity of the key operator through periodic surprise cash surveys, checks on
revenue collections, cashbooks, banking documents and asset registers.
To ensure that every transaction especially of financial nature is duly approved and appropriately
authorized before execution.
To ensure that the due process is adequately and consistently observed in the award of contracts
of works, supplies and job orders.
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ix.

To ascertain the adequacy of effort to implement previous audit recommendations.

x.
To ensure the existence and adequacy of vital records.
xi.
To evaluate the adequacy of and security of documents and records.
xii.
To ascertain and ensure that an enterprise conforms with statutory and professional requirements.
xiii.
To advice on financial matter for efficient decision making by the school management.
All these among others are meant to engender accountability of stewardship by extension
of effective performance.
Need for School Audit
It is often argued that since the financial statement prepared by the management of an
enterprise may actually not represent the financial position of the organization, there is therefore,
a need for audit. Some of the reasons for an independent professional opinion on the financial
statement will include:
a.
The operations of the ownership from management and the need to safeguard the interest of the
ownership who do not participate in the day-to-day decision of the organization by the
management.
b.
The CAMA 1990 provides that every company shall at each Annual General Meeting (AGM)
appoint an auditor or auditors to audit the financial statement of the company.
c.
To provide credibility on reports and accounts prepared by the directors which may contain
errors, not disclose fraud, be unintentionally misleading, fail to conform to regulation and not
disclose relevant information.
Roles of Auditing in School Administration
In relation to the auditors of a limited liability company, section 359 of CAMA 1990
provides that the primary duty of the auditors of a company (including institutions like schools)
is to make a report to its member on the accounts, examined by them, and on every financial
statements, which are to be laid before the company at a general meeting during the auditors
tenure of office. In addition to the report made to the members, the auditors of the public
company also have a duty to make a report to an audit committee established by the school.
Section 360 further provides as follows:
*
It shall be the duty of the auditors in preparing their report to carry out such investigations as
may enable them to form an opinion as to the following matters:
a.
Whether proper accounting records have been kept by the company and proper returns suitable
for heir audit received from branches not visited by them.
b.
Whether the companys balance sheet and (if not consolidated) its profit and loss account are in
agreement with the accounting records and returns and.
c.
The auditors shall state so in their report if in the requirements of parts V and VI of schedule 3
and part I to III of schedule 4 of the decree are not complied with the accounts, it shall be the
auditors duty to include in their report, so far as they are reasonably able to do so, a statement
giving the required particulars.
The Need for Effectiveness and Efficiency in School Audit
From the study, control in organization is concerned with the achievement of certain
standard of performance. Related to the idea of satisfactory performance are the concept of
organizational efficiency and effectives. This control is essentially concerned with the
maintenance of efficiency and effectiveness of the organization. What is perhaps not clear at this
point is the nature of measures, or standard of efficiency and effectiveness, and indeed, how
these two concepts differ.

Nwankwo (2006) affirms efficiency is concerned with doing things right while
effectiveness is doing the right thing. Efficiency and effectiveness are separate concepts and
cannot be used interchangeably, in particular it is perfectly possible to have all effective
organization which is inefficient and vice versa.
Efficiency
The fact that most organization aspire to certain objectives by the employment of limited
resources give rise to the concept of efficiency in productivity. The efficiency of a system can be
regarded as the ration of outputs of the system, a high ration, implying high efficiency of
productivity (Aguolu,2007).
Effectiveness
According to Adeniyi (2004), there are two approaches to the study of organizational
effectiveness in the literature. The first approach, known as the goal model approach, views
effectiveness in terms of good attainment, that is the more an organization goal are meet or
surpassed, the greater is its effectiveness. For an organization to establish a clear goal, the
organization must have an effective organizational structure (Aguolu, 2008).
Another way for organizational effectiveness focuses on the relationship between the
organization and its environment, this is called system resources. This system resource approach
defines effectiveness as the degree which an organization is successful in acquiring and utilizing
scarce resources. System resources approach defines effectiveness as the degree which an
organization is successful in acquiring and organization utilizing scarce resources. However,
organization bring in resources from their environment and return them as value outputs, the
more effective organization survive because they can maintain a greater intake of resources than
is required to produce their output.
Accountability
Whoever accepts position of trusts or responsibility becomes accountable for his actions and
inactions as it concerns its position. Amojori (2002) sees accountability as explanation for
actions of these having custody of power, human resources, public money and other resources. It
therefore deals with the justification of financial transaction as conforming to organizational
roles and procedures, business concepts of morality, professional ethics and the law of state.
You may picture your schools situation thus:
Manage your
effectively
Responsibility

school Control staff, human and material Discharge of responsibility and

resources
exercise of authority
Authority
Accountability

This is to say that the basic ingredient for modern school administration is effective
delegation of responsibility and authority to get effective accountability.

i.

Factors militating against effective and efficiently in school audit

The effectiveness of audit work relies on the reports presented. Such reports quarries
comprise of quarries and comments based on observations, opinions and conclusions reached in
the course of the exercise.
Confidence Scheme: Most accountants take advantage of the trust and confidence reposed on
them by school owners and principals to make fraudulent mis -presentation which the school
owner or principal relies on and suffers serious financial damage.

ii.
iii.

iv.
v.

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Nature of Some School Administrators: Some of our school administrators are greedy in
nature. Many principals who are greedy connive with their accountants to perpetuate corrupt
practices.
Loopholes in our Legal System: There are a lot of loopholes in our legal system with respect to
embezzlement of public funds. Our laws are not too strict to misappropriation of government
fund. These discoveries of such loopholes serve as incentives to those who may wish to commit
fraud.
Poor Remuneration: When accountants are not well paid to measure up with the constraints of
the economy accountants will be compelled to steal, this is so because physical cash is involved.
Inadequate Training and Re-training of our Accountants: This leads to poor performance
and that breeds malpractice. Failure to undergo on-the-job training, relevant outside source or
even attend seminar of that nature, will lead to unsatisfactory performance which eventually
creates more room for malpractice by the outgoing accountants and auditors.
Some other factor militating against effective and efficient school audit are: Inadequate
internal audit cycle management ignorance, ego favoritism, policy inconsistency and efficient
school.
Theoretical Framework
This study was anchored on descriptive approach theory. Theory developed using the
descriptive approaches are basically concerned with what accountants and auditors do.
Therefore, descriptive approach shows what accounting bodies do to educate, train and develop
accounting professionals in Nigeria. The descriptive approach of the role of accounting
professional bodies in education and development of accounting professionals should include
independence, objectivity and fairness. Accountants and auditors should maintain integrity and
objectivity in carrying out their professional responsibility. This principles helps the school
accountant to see himself as an independent person and also be objective in is professional
duties.
The application of this descriptive theory to the present study shows that school auditors
and accountant should have a fraud free school administration.
The relevance of the descriptive theory to this study is that school accountants and auditors serve
as an instrument in helping to get a successful school administration.
Conclusions and Recommendations
An audit is an indispensable tool for the effective and efficient controls of school
administration and in fact any organization. They benefit which we may derive from a systematic
and thoroughly conducted audit are as follows:
It will help to ensure that plans are realistic since the officials know that such plans will form the
basic of an audit evaluation.
It helps to safeguard the assets of the school, as effective control with need to be established in
respect of each class of assets.
It enforces adequate, accurate and up-to-date recording as this will be the first part of call by the
auditor.
It instills discipline and eliminates friction as audit procedures require a well defined
organization structure with clearly defined responsibilities assign to all key personnel.
It compels adherence to set targets (Budget estimates) as officials will be required to provide
reasonable and acceptable explanations for any variances.

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From the findings, the following recommendations were made:

Specialist are needed on the staff of the office of the Auditor General of the Federal to access the
effectiveness or use of funds in school administration.
Newly employed auditors should be regulated to undergo a course on financial regulations and
various rules and law that are related to government activities that has something to do with
revenue and expenditure.
Auditors should place more emphasis on internal control when they want to audit, this will
ensure an effective presentation of fraud.
There should be independence of auditors to ensure that there is no undue influence of auditors
forms a person or an office.
Accounting staff should co-operate with the auditors to enable them carry out their work
effectively.
Expected result should be clear, measurable and quantifiable in order to facilitate easy
comparison between the budgets and actual result.
If the recommendations are properly implemented the era of sub-standard performance in
the school administration as well as misappropriation of school funds will be as good as over.

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