ABSTRACT

The choice of topic "problems and prospects of auditing small and medium scale enterprises in Nigeria was derived from the fact that the problems facing audit of small and medium scale has eaten deep into the fabric system of small and medium scale enterprises and are yet to be tackled. Some of these are varieties of problems faced by auditor while auditing small and medium scale enterprises; the absence of good internal control, Separating business from ownership form management, identifying person to be the accountant who prepares the financial statement and also the auditor of the enterprises. The objective of the study are to find out if there is any economic importance attached to the auditing of small and medium scale enterprises. To identify those factors militating against the preparation of financial statements of small and medium scale enterprises. Analyzing the hypothesis which is Auditing of small and medium scale enterprise has no economic importance, there are no factors militating against the preparation of annual financial statements and there are no provisions of the law authorizing the auditing of small and medium scale enterprises. Due to the complexity of the topic, the researcher used random sample method to select some of the enterprises to study. The researcher used statistical formular in the determination of the sample size with a fairly population of Fifty seven (57) as was pointed out in the study. Questionnaire was the instrument used for this study. consisting of Twenty four (24) items formulated in both closed and open ended form. The essence was to allow the respondents give their views on some important issues. Having stated the methodology of the research question clearly and understandably as possible, the main work analysis, presentation and interpretation of all the data collected was done, which yield the results expected. Finally, the researcher draws conclusion and stated his findings base on the major problems which include; there are factors militating against the preparation of annual financial statements, there are no provisions of the law authorizing the auditing of small and medium scale enterprises and auditing of small and medium scale enterprises has some economic importance. Based on the findings, the researcher therefore made some recommendation that will be useful to the research study which includes; Effective internal control unit should be established in every small and medium scale enterprises, proper management to avoid missing some important information in the financial statement and finally employment of qualified personnel.