1.1 BACKGROUND OF STUDY
In the origin auditing was not used to cross check accounts by the management or owners’ of the business. Auditing was introduced when the capital used for running the business was large and the fund was entrusted in the hands of few who are managing the business. Under this condition the need to have an auditor becomes apparent to the owners of the business.
Auditing is one of the management instrument for efficiency and effectiveness, control and monitoring exercise towards accomplishing organizational goal. Auditing improves the information available for parties interest in the activities of an organization usually by commenting on the quality of management report, thus enhancing their credibility.
Theoretical rationalization for organization audit review focuses on two main themes. They are accountability and economic incentive. Accountability means that the recognition that responsibility or duty is owned by one party to one or more other parties and the idea that it should be possible to monitor the way, the responsibility has been discharged through the provision of some information, explanation report on its performance.
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