INTRODUCTION
Internal Audit or internal control system refers to systems or control of financial and the like devised by management in order to carry on the business of there enterprise in orderly and efficient manner. It can also be defined as an adherence to management policies and the safe guard of assets and secure as far as possible the completeness and accuracy of the organization records.
It is the responsibility of management to decide the extent of the internal audit system, which is appropriate to the enterprises. The nature and extent of control very between enterprise and also from one part of an enterprise to another. The control used will depend on the nature, size and volume of transaction (the degree of control which members of management are able to exercise personally, the geographical distributor of the enterprise and other factors.) the choice of the controls will depend on the cost/benefit analysis of operations the controls. The operating procedures for small enterprise will often differ significantly from that of large enterprise many are not practical, appropriate or necessary in the small enterprises.
Management of small companies have less need to depend. On the format internal control for the reliability of the records and other information because of the personal contact with or involvement in the operation of the companies itself.
Because of the size and decentralized form of modern business, top management has to establish internal auditing function to act as an extended eye of management supervise, control and report back to it directly and prompting any deviation from management set policies and procedure.
2.1. HISTORICAL DEVELOPMENT OF INTERNAL AUDITING
Brink (1978) stated that, “internal auditing can exist only when a particular person sits back and investigates on something he himself had done” this happens when it is followed-theoretically. At such investigation, the individual asks himself how well he has done the...