CHAPTER
ONE
INTRODUCTION
1.1 Background Of The Study
Accountability in both
public and private section has being an issue that is worth discussing due to
its paramount and colossal impact to the overall performance of an
organization.
It (Accountability) has
to do with reporting back action, task carried out by an individual to the
authority who apportioned such function.
Accountability is the
process or act of reporting back to a higher authority, body or individual the
actions taken by a steward. It enables the person or persons reported to
determine if the steward has acted or performed the assigned duties properly
and satisfactory. It plays a major role in the success or failure of any
business, particularly when the business is not managed by its owner.
Initially most business
set-ups were managed by their manager was the sole financial contribution to
the enterprise. But with the development in the scale and scope of business, a
huge capital beyond that
affordable by the sole
individual or a family was needed. Consequently contributors (hereafter called
shareholders) were required to raise the funds for the business. The emergence
of these shareholders led to the divorce of the owner managers from the
management of the business as all of them cannot be directors at the same time.
This the management of business was entrusted to the hands of people who have
no financial claims to the business and the shareholders were skeptical about
this particularly as the law does not permit them individually to go through
the books of the company in their desire to keep abreast of the performance of
the directors.
This skepticism aroused the need
for surveillance over the activities of the non-owner managing directors.
Audit has since them received a lot of definitions
and/or then received a lot of definitions and/or interpretations both from
accounting bodies and auditors and their non-the-like. Justifiable is to say
that audit has suffered a lot of misinterpretations. Most of the misgiving
interpretations see it as being armed at fraud and error detection. But audit
essentially involves much more than that. One of the most involved and of
course the most acceptable definitions so far is that issued by the
consultative council of accountability bodies (CCAB) which sees audit as “the
independent examin financial statement of an enterprise by an appointed auditor
in pursuance of statutory obligation (Howard 1982:1).
Deductively, an audit is the objective scrutiny o
presentation by a third party (an auditor) who is different from the users and
the preparing of the presentation. The general essence of audit is to ascertain
compliance of the firm‟scies with records usefulness of and acceptability of
and the dependability.
Accountability as explained above has suffered some
misconceptions, surprisingly in the hands of those who should have understood
it better. Most of the lay
men conceptual understanding
of accountability relates
it to communicating about monetary
matters beyond that. According to the Webster encyclopaedia dictionary
of English language (1995:110), accountability is
defined as “the
state accountable, answerable, liable
or re to define accountable
incase of liable loss; responsible
to pto a trust, liable to be
called to account, put in another way an much more related
to the context in the articles Aba times of fourth September 1999 captioned
“accountability in the thir
Accountability connotes answerability and
stewardship, by answerability is meant answering fo decisions (odon1999:7)
Stewardship according to the article means service;
it means that every leader should be responsible to the people who reposed
trust in him.
For accountability to be accorded its rightful place
in an organization the writer believes that there is a high need for proper
internal control measure and in addition, efforts should be made to ensure that
company accounts are subjected to external and independent audits after each
financial period.
The bible also records
in chapter 25 verse 14-30 of saint Matthew gospel, the story of a rich man who
went on a far journey entrusting the affairs to his servants and who when he
returned, required the servants to answer individually, for their stewardship
to the business while he was away. It in the same manner that it is required of
the chief executives and directors of a company who are quite different from
the real owners of the business to answer for their stewardship of the funds
and property entrusted to them by the shareholders.
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