THE CHALLENGES AND PROSPECTS OF AUDITING IN A
COMPUTER ENVIRONMENT(A Case Study Of Nigeria Mobile Telecommunication, Limited)CHAPTER
ONE
1.0
INTRODUCTION
Human being, either young,
old, literate and illiterate are all product of their various environment i.e.
the environment (internal or External) affects them either positively or
negatively, even their work and inputs into anything, due to the rational and
unpredictable nature of man, that makes them react to stimulants.
Before considering, the
reaction towards auditing, auditing can be traced back to the ancient times
where the receipts and payments of an estate or a manor were read to the lord
or proprietor, or the head of a manor. It began more like a stewardship kind of
dealings, where houses are entrusted into the hand of caretakers, who report to
the landlord at the end of every month, etc. the origin of the word auditing is
from a Latin word “Audire” (meaning to hear). At the beginning, the dealing was
a kind of a sole – proprietorship business, since it involves a landlord and a
steward/caretaker; but with industrial revolution, there was an increase in
business transactions, which ushers in partnership, and other forms or types of
business. Hence, financial transactions becomes much and the whole processes
becomes complex and required more formal and improved accountability.
Considering the issue of
audit reaction to the computer environment, it becomes proper to note that
prior to the new era (computer) audit had already been in practice, though in a
traditional/manual environment, as such, there are bound to be either
challenges or prospects in the change to computer environment. This holds to
the fact, that human beings react to changes in either positive or negative
way, and they constitute the most important resources, in an organizational
setup.
Over the years human beings
had been used to a particular audit environments and it has become part of
their routine work; so introduction of a new thing could and could not be a
problem, irrespective of its future contribution, but as a result of human
level of adoption to new things.
Hence, the starting point
is how fast or slow, the organizations members of staff adopts to new policies,
where this is in place, then the challenges and prospects can now be
determined.
1.1 HISTORICAL
BACKGROUND OF M-TEL
From M–TEL’s NEW IMAGE. A
presentation to new members of the Mtel family October 2003. Mtel was
established in 1996, to run the operations of NITEL’S Total Access
Communication System (TACS).
It was merged with NITEL in
April 2001 and demerge on 1st April, 2003. It has the vision of
becoming, the number two mobiles operators in Nigeria in both consumer and
business markets in five years, and have a reliable state of the art network
infrastructure that meets the ever increasing demanding requirements of its
customers and support a wide range of mobile voice and data service. Also, that
its organization will have a “customer first” culture that is plainly visible
by the respectful way it treats its customer and by the utmost care that is
taken throughout the organization to maintain the promised service levels. And
Mtel is aimed at achieving this vision through the telecommunication services
it provides to the general public.
1.2 THE
STATEMENT OF THE PROBLEM
The audit problems with
organization today can be dealt with from two broad perspective i.e.
technological problem and historical problems.
This sense of the technical
problem has to do with lack of technological know how. Since audit in a
computer environment is a modern or contemporary way of audit, it entails a
formal or an informal training on how to do this, which so many people
(auditors) and their organization lacks, and it also involves extra spending on
the purchases, maintenance, etc. of computer and its accessories, which
organization try to avoid in their bids to maximize profit.
The historical aspect of it
could be referred to as familiarity with the traditional way, which result from
continuous practice, hence making it difficult for one to adopt to current or
modern way of doing it, so easily.
Furthermore, the size of
the organization, like my case study whose area offices here in Kaduna is small
in size and in member of staff, also determine the use of modern audit
(Computer) or the traditional (manual) way of doing it, i.e. if the size is
big, computer audit will be embarked on to facilitate the whole audit process,
while if it is small in size, the traditional way can be used, since the work
load in little.
1.3
AIMS
AND OBJECTIVE OF THE STUDY
Many
organization have seem insist on using the traditional way of audit, due to the
ignorant of the positive and negative effects of computer audit on the audit
department of an organization. As such, I the researcher is embarking on this
study using Mtel, Kaduna, as a case study to bring out the possible effects and
defects of computer audit in an accounting system of an organization, after
which the effects will be compare as against the defects, hence knowing whether
to use computer audit or not. And my objectives are:
i.
To
ensure proper accountability in financial management, in our organization
(Mtel)
ii.
To
ensure, efficiency and effectiveness in the actualization of the organizational
target.
iii.
To
ensure an equitable distribution of service in proportion to the money paid.
1.4
SIGNIFICANCE
OF THE STUDY
The main
reason or purpose of setting up any commercial organization is to maximize
profit, but most often, this purpose is not being achieved as a result of mis –
management of resources (financial and Material).
Hence, this research work
will enlighten organizations and potential investors/entrepreneur on how to
guard against mis – management of resources, by building a solid frame work for
check and balances in an organizational set – up.
1.5
HYPOTHESIS
Here, I,
(Researcher) is using a tentative statement or assumption to guide my enquiries
in the organization, to know the positive impact and effectiveness of computer
audit to the organization. i.e.
Hi: Computer audit facilitates and enhances
audit work.
Ho: Computer audit does not facilitates and
enhances audit work.
These two assumptions above
are the basis for which I am giving out my questionnaires.
1.6
SCOPE
AND LIMITATIONS OF THE STUDY
This
research work is limited to the communication industries, precisely Nigerian
Mobile Telecommunication Ltd (Mtel) Kaduna Area Office.
The time
of submission of this project is short, that I, the researcher limit my work to
the area office of Mtel Kaduna.
Also, due
to the administrative secrecy on the part of the organization, because of her
competitors, I was unable to get all valuable information that would have
helped me in this research work, besides, time was not enough for me, since I
had to combine both the class work and the research work.
Finally,
accessibility to relevant textbooks also, constitutes a constraint on my work.
1.7 DEFINITION OF TERMS
v Computer: An electronic machine that can
save information and do things with it according to a set of instructions
called a programme.
v Audit: It is an independent scrutiny and
examination of organization books of account and financial statement, to
states, ones opinion of, on the accuracy and completeness of the records
prepared.
v Challenges: Something that tests
strength, skill, or ability especially in a way that is interesting.
v Prospect: Chances of future success.
v Environment: All the situation, event,
people etc. that influence the way in which people live or work.
v Traditional: Following ideas and methods
that have existed for a long – time without being interested in anything new or
different.
v Manual: Operated or done by hand or
without the help of electricity, computers, etc.
v Flowchart: A diagram that uses
connecting lines and a set of conventional symbols to show the sequence of
operations and the flow of data in a computer programme.
v Hardware: These are the physical
components of a computer system, such as the chips, disk drives, monitors, etc.
v Data: This is piece of basic raw fact
that needs to be processed to produce a meaningful information
v Information: This is a processed data
into meaningful and useful terms
v Input Device: This is a medium/device
through which raw data are being fed into the computer.
v Output Device: This is the device
through which a processed data/information can be made available for human
consumption.
v Binary Code: This is a coding system
that uses alternative elements, 0 or 1 true or false, etc.
v Bit: A binary, digit, this is the
smallest unit of information that a computer can handle represented by a single
0 or 1.
v Byte: This is a group of eight bits
(representing, for example, a number or letter) that the computer operates on
as a single unit.
v Magnetic Media: These are primarily
storage media but are often used at an intermediate stage of data input. E.g.
Magnetic Tape, Magnetic Disk. Etc.
v Data Base: A collection of information
organized for rapid search and retrieval.
v Disk Drive: A device that rotates a
magnetic storage disk and that can record data on the disk and read data from
the disk.
v Floppy Disk: A thin flexible plastic
that stores data in the form of magnetic patterns on it surface.
v Interface: The hardware and software
that enable a user to interact with a computer (called a user interface) or
that enable two computer system to interact.
v Logic Circuit: An electronic switching
circuit that performs a logic operation, its binary output is entirely
determined by the combination of binary input.
v Memory: A storage area in which a
computer saves data and from which it retrieves data.
v Microprocessor: A single chip containing
all the components found in a computer’s central processing unit.
v Network: A system of computers,
terminals, and databases connected by communication lines.
v Programme: A step by step series of
instructions directing the computer to carry out a sequence of actions in order
to perform an operation or to solve a problem.
v Software: Instructions or programme used
by a computer to do its work; distinguished from hardware.
v Random Access Memory (RAM): A temporary
computer memory system in which data can be stored and from which data can be
quickly retrieved.
v Read Only Memory (ROM): A permanent
computer memory system containing data and instruction that can be retrieved
and used but never altered.