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AN APPRAISAL OF AUDITORS INDEPENDENCE AND THE GOING CONCERN OF FIRMS

  • Type:Project
  • Chapters:5
  • Pages:119
  • Methodology:Z Test
  • Reference:YES
  • Format:Microsoft Word
(Accounting Project Topics & Materials)
AN APPRAISAL OF AUDITORS INDEPENDENCE AND THE GOING CONCERN OF FIRMS
ABSTRACT

This study appraised auditors’ independence and the going concern of firms. In order to actualize the objectives of the study, various literature and theoretical issues were discussed. The instrument used for the purpose of this research was gathered through primary and secondary sources. The primary source is through questionnaires while the secondary source extracts from textbooks by different authors, journals and other publications. The mass of information generated from the questionnaires was summarized in form of table and analyzed using simple percentage. The researcher administered one hundred (100) questionnaires to respondents, out of which ninety-five (95) were retrieved for the purpose of presenting and analyzing responses to issues raise in the questionnaires. The data collected was analyzed using Z-test statistical tool. The findings from analysis revealed among other things that there is a significant relationship between auditor independence and going concern of firm. Recommendations were however made by the researcher.
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
Background to the Study                     
Statement of the Research Problem            
Objectives of the Study                         
Research Hypothesis                     
Scope of the Study                    
Significance of the Study                     
Limitation of the Study                    
References                             
CHAPTER TWO: LITERATURE REVIEW
Introduction                                 
The Meaning and Types of Auditors Independence     
Audit Independence in Nigeria                 
Review of Previous Studies                     
Theoretical Framework                          
References                         
CHAPTER THREE: RESEARCH METHODOLOGY
Introduction                         
Research Design                                 
Population                                 
Sample Size                         
Sampling Technique                         
The Research Instrument                 
Method of Data Analysis                     
References                        
CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATION
4.1    Introduction                            
4.2    Descriptive Statistics                             
4.3    Test of Hypothesis                         
CHAPTER FIVE:    SUMMARY OF FINDINGS, RECOMMENDATION AND CONCLUSION
5.1    Introduction                             
5.2    Summary of Findings                        
5.3    Recommendations                        
5.4    Conclusion                                    
Bibliography                                
Appendix                             
    CHAPTER ONE
INTRODUCTION
BACKGROUND TO THE STUDY
Auditors’ independence is the foundation of the auditing profession, a significant element in the statutory financial reporting process and a key condition for adding value to all audited financial reports. According to Appah (2008), the duty of an external auditor is to form and express a professional opinion on the financial statement presented to him. In order to achieve this, the auditor needs to be and be seen to be independent from the management.
The question of auditor independence - which is synonymous with auditor objectivity and the auditor’s ability to withstand client pressure - has received increased attention from regulators, academics, and practitioners around the world in recent years due to highly publicized audit failures. Regulators often argue that independence is compromised through an auditor’s dependence on “excessive” audit fees. Some academics, however, argue that regulators fail to consider the cost to auditors of compromising their independence (e.g., loss of reputation) and that regulators ignore the possibility that may actually improve audit quality (e.g., DeFond, Raghunandan and Subramanyam 2002).
Auditors’ independence in fact enhances the reliability of financial statements whereas Auditors independence in appearance promotes public confidence as to enable users rely on financial statements (Church and Zhang, 2002).
The fundamental concept of professional independence is an attitude of the mind based on integrity and an objective approach to work. An auditor must at all times, perform his work objectively, impartially and free from influence by any consideration which might appear to be in conflict with this requirement.  
Appah (2008) note that independence in auditing means having a position to take an unbiased view point in the performance of audit test, analysis of results and attestation in the audit report. Auditor independence refers to the independence of the internal auditor or of the external auditor. It is essentially an attitude of mind characterized by integrity and an objective approach to the audit process. The concept requires the auditor to carry out his or her work freely and in an objective manner.
Audits are carried out to ascertain the validity and reliability of financial statement and presented corporate information. It also provides an assessment of organization internal control. However, the goal of an audit is to express a professional opinion on the financial statements being examined, based on work done on a test basis.
Evans and Parker (2008), describe auditing as one of the most powerful safety monitoring technologies and effective way to avoid complacency and highlight slowly deteriorating conditions especially when the auditing focuses not just on compliance but effectiveness.
This study is therefore, motivated a desire to examine auditor independence and going concern of firms.
STATEMENT OF THE RESEARCH PROBLEM
Auditor independence is commonly referred to as the cornerstone of the auditing profession since it is the foundation of the public’s trust in the accounting profession. Since 2000, wave of high profile accounting scandals have cast the profession into the limelight, negatively affecting the public perception of auditor independence and going concern of firm.
It is against this backdrop, the following research questions are raised.
What is the relationship between auditor independence and going concern of firm?
What is the relationship between auditor independence and firm performance?
What is the relationship between auditor independence and firm financial reporting?
OBJECTIVES OF THE STUDY
Stemming from the above statement of problems, the broad objective of this study is to empirically investigate the impact of auditor independence and going concern of firm.
Other specific objectives are:
To ascertain the relationship between auditor independence and going concern of firm.
To determine the relationship between auditor independence and firm performance.
To verify the relationship between auditor independence and firm financial reporting.
RESEARCH HYPOTHESIS
The following hypotheses shall be tested in this study
Hypothesis I
Ho:    There is no relationship between auditor independence and going concern of firm.
H1:    There is a relationship between auditor independence and going concern of firm.
Hypothesis II
Ho:    There is no relationship between auditor independence and firm performance.
H1:    There is a relationship between auditor independence and firm performance.
Hypothesis III
Ho:    There is no relationship between auditor independence and firm financial reporting.
H1:    There is a relationship between auditor independence and firm financial reporting.
SCOPE OF THE STUDY
This research work is an empirical study on auditor independence and going concern of firm. The population of the study is the entire firm quoted in the Nigeria Stock Exchange, while the sample is firm quoted firms in Nigeria.
The time frame of this study is five (5) years i.e. (2007 – 2011).
Geographically, the study will be conducted in Benin City, Edo State.
SIGNIFICANCE OF THE STUDY
This study will place emphasis on the auditor independence and going concern of firms.
It will enlighten the general public and government on the importance of auditor independence.
It would also add to the available literature on the area of study while also providing a platform for other students and researchers who may want to further this study.
LIMITATION OF THE STUDY
Due to the vastness of the topic, this study is limited to investigate the auditor independence and going concern of firms in Nigeria.
This research cannot be regarded as perfect and hitch free as some difficulties were encountered in the course of the study.
Some of the limitations are:
Smallness of sample size: It is interesting to emphasize that the findings of this empirical research are not to be generalize for all industry, since our limited to a number of small scale enterprise.
The inability to obtain a completely random sample.
Imprecise measurement of variables.
However, strenuous effort has been made to mitigate the effects of these constraints in order to come out with an effective work.


AN APPRAISAL OF AUDITORS INDEPENDENCE AND THE GOING CONCERN OF FIRMS

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Details

Type Project
Department Accounting
Project ID ACC0693
Price ₦3,000 ($9)
Chapters 5 Chapters
No of Pages 119 Pages
Methodology Z Test
Reference YES
Format Microsoft Word

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    Details

    Type Project
    Department Accounting
    Project ID ACC0693
    Price ₦3,000 ($9)
    Chapters 5 Chapters
    No of Pages 119 Pages
    Methodology Z Test
    Reference YES
    Format Microsoft Word

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