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AUDITORS INTEGRITY: THE ROLE OF AUDITORS IN THE FINANCIAL STATEMENT

  • Type:Project
  • Chapters:5
  • Pages:100
  • Methodology:Chi Square
  • Reference:YES
  • Format:Microsoft Word
(Accounting Project Topics & Materials)
AUDITORS INTEGRITY: THE ROLE OF AUDITORS IN THE FINANCIAL STATEMENT
        ABSTRACT

    The integrity of auditors in Nigeria has been frequently cautioned. The way at which Nigerian auditors secure their audit assignments and the rate at which they lobby for auditing jobs put their independence in jeopardy. Even though recognized professional accounting bodies in Nigeria are trying very hard to ensure best practice in the auditing profession via the enforcement of professional code of conduct for their members, the strict observance of such codes is still questionable. The main objective of this study is to examine the issues of ethical considerations in auditing and how they affect the integrity of auditors in Nigeria. The study employed a synthesis of descriptive and survey research methods. Data for the study were obtained from the conduct of interviews and administration of questionnaire. Descriptive method was used in the analysis of the data collected from interview; while chi-square analysis was used to test the research hypothesis. The findings from this study revealed that audit firms in Nigeria are still employing certain categories of unethical practices in securing and discharging their audit engagements. Thus, the way and manner at which some auditor’s pursue audit assignments renders their integrity in jeopardy. The results from the study, however, revealed that the presence of ethical considerations and other rules of professional conduct do not significantly impacted on the auditor’s independence in Nigeria. To achieve a significant level of impact of ethical considerations on auditors’ independence, the mentality of auditors must be changed to make them believe that such ethical practices are meant to improve their professional conduct and will not make them lose audit jobs. There should also be a rotational duration in terms of serving as an auditor(s) of a particular company or at a particular time, which is to be determined by the recognized professional bodies in Nigeria.
TABLE OF CONTENTS
CHAPTER ONE
1.1     Introduction                                    
1.2     Statement of Research Problem                    
1.3     Objectives of the Study                        
1.4     Significance of the Study                        
1.5     Scope of the Study                            
1.6     Research Hypothesis                            
1.7     Limitations to the Study                        
CHAPTER TWO: LITERATURE REVIEW
2.1    Introduction                            
2.2    Historical Background of Auditor: The History and Conceptual Benefits
of Audit Committees                        
2.3    The Auditor and Financial Reporting                    
2.4    Audit Committee Challenges                        
2.5     The Function and Practices of Audit Committee in Nigeria        
2.6    Composition of Auditor in Nigeria and the Ambiguity in the Provision
of CAMA 2004                        
2.7    Qualification of Audit Committee Members                
2.8    Quality of Audit Committees                    
2.9        Auditor’s Effectiveness and its Relevance to Financial Reporting        
2.10    Auditor Independence                            
2.11    Audit Committee Relationship with Management, Internal Auditor and
External Auditors                            
2.12    Audit Committee and the Independence of External Auditors    
2.13    Auditor and Corporate Financial Reporting: Audit Committee
Characteristics and Financial Reporting Quality            
2.14    Financial Reporting                            
2.15    The Concept and Definition of Financial Reporting        
2.16    Components of Financial Reports                    
2.17    Form and Content of Financial Statements                
2.18    Types of Financial Statement                        
References                                
CHAPTER THREE: METHODOLOGY
3.0    Introduction                        
3.1    Research Design                                
3.2    Population and the Sample of the Study                
3.3    Sample and Sampling Technique                    
3.4    Sources of Data                            
3.5    Instrument of Data Collection                    
3.6    Actual Field Work                            
3.7    Data Collection Method                        
3.8    Data Analysis Method                        
3.9    Justification for the Use of Chi-Square Test                    
3.10    Decision Rule                                
References                                
CHAPTER FOUR:    DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1    Introduction                                 
4.2    Data Presentation                            
4.3    Data Analysis and Interpretation                    
4.4    Test of Hypothesis                        
References                            
CHAPTER FIVE:    FINDINGS, RECOMMENDATIONS AND CONCLUSION
Introduction                                
Findings                                    
Recommendations                            
Conclusion                                
Bibliography                                 
Appendix                                
CHAPTER ONE
1.1     INTRODUCTION
Auditors are saddled with the responsibility of examining the financial statements of organizations for the purpose of ascertaining their truth and fairness. The auditing profession in Nigeria is regulated by a combination of three regulatory documents. The Companies and Allied Matters Act (CAMA), No. 1 of 1990 serves as the supreme regulator; while the Nigerian Standards on Auditing (NSAs) and Rules of Professional Conduct released by ICAN and ANAN for the members in practice. The main objective of these regulatory documents is to provide guidelines for the practice of auditing in Nigeria.
Although CAMA provides extensive provisions on the practice of auditing in Nigeria, it fails to specifically address the issue of auditor’s independence. However, it contains only guidelines as to the manner at which the auditors should be appointed, how they should function and to whom they should report to. The other two regulatory documents also do not capture explicitly what auditor’s independence means but rather require auditors to be independent and be seen acting as such. However, they provide detailed list of issues that surrounds the auditor’s independence.   The main thrust of ethical standards in auditing is to ensure and uphold the auditor’s independence (Jackling et al, 2007; Dearman and Beard, 2005). Independence has become an emotive word, a banner standing for freedom, integrity and all that is good. According to Aderibigbe (2005), the word independence has two distinct meanings. Firstly, it falls within a family of words implying an absence of relationship like unrelated, disconnected, isolated, remote and insular. Perhaps this is the reason why, in the olden days, auditors were often required to hold shares in their client companies so as not to be too independent. Secondly, independence falls within a family of words implying freedom from the exercise of powers; for example, free, unhindered, emancipated and free from dominance or influence.The independence of auditors in Nigeria has been frequently cautioned. The way at which Nigerian auditors secure their audit assignments and the rate at which they lobby for auditing job put their independence in jeopardy. Even though recognized professional accounting bodies in Nigeria, like ICAN and ANAN, are trying very hard to ensure best practice in the auditing profession via the enforcement of professional code of conduct for their members, the strict observance of such codes is still questionable. What is the impact of these professional codes of conduct or ethical considerations on the auditor’s independence in Nigeria? To what extent can we say that the ethical considerations ensure and uphold auditor’s independence in Nigeria? These are focal issues that this study intends to address. The main objective of this study, however, is to carry out an empirical study on the issues of ethical considerations in auditing and how they affect the independence of auditors in Nigeria.
1.2     STATEMENT OF RESEARCH PROBLEM
    A successful audit process has to pass through phases of the audit standard and practice, (C.A.M.A sec 360 (1) 1990 as amended up to date). Integrity is one of the moral qualities of an auditor, this is questioned when directors of organization who have responsibility of managing the funds tries to influence the auditor’s integrity.
    This study shall view these problems in the following listed perspective;
That as the auditor partner tenure increases in an organization,  the integrity of the auditor is negatively influenced.
That it is possible for auditors of firms to detect errors and fraud in the financial statement before audit report is given.
That auditor’s are to add value to the integrity and relevance of the financial statement.
Auditor’s integrity in the financial statement is affected by management pressure.
    1.3     OBJECTIVES OF THE STUDY
    In carrying out this research study, the researcher decides to design an objective in consonant with the integrity of the auditors which is a role of auditors in the financial statement. According to (C.A.M.A 1990 sec 360 (1) as amended to date).
To ascertain that auditors add value to the integrity of financial statements.
To ascertain that audit detect errors and fraud in financial statements.
To ascertain that audit tenure affects the integrity of financial statements.
To ascertain that management have an influence on the independence and integrity of the audit work.
1.4     SIGNIFICANCE OF THE STUDY
    The study seeks, among other things, to identify the auditor’s integrity as a factor that determines the confidence of the shareholders in the financial statement. This encourages the independence of auditors in the public enterprise taking management as a key role. The study determines the factors that reduce auditor’s integrity in public enterprise. The study also determines how the auditor could detect errors and fraud in the financial statement and to determine if the auditors increase in duration could affect the auditor’s integrity in the public enterprise.
    In order to achieve these objectives it was hypothesized that the integrity of auditors has a significant impact on the accountability of the public enterprise in Nigeria.
1.5     SCOPE OF THE STUDY
    The scope of the study examines the existing legal provisions in Nigeria, on auditing particularly, (C.A.M.A 1990, B.O.F.I.A 1991, as amended to date).
    These study uses questionnaire and personal interview administered on owners, depositors and stakeholders in the following Banks in Benin as a sample representing Banks in Nigeria. These Banks include;
First Bank Plc, Uselu, Benin city.
Zenith Bank, Uselu, Benin city.
Sterling Bank, Mission road, Benin city.
Mainstreet Bank, Ringroad, Benin city.
GT Bank, Uselu, Benin city.
1.6     RESEARCH HYPOTHESIS
    The feeling of familiarity, friendship, trust and social support from long tenure between partners, give rise to the hypothesis below:
1.    Ho:  Auditors integrity in the financial statements is not affected by management
    H1:  Auditors integrity in the financial statements is affected by management.
2.    Ho:  As auditor partner tenure increases, the auditor’s integrity will be affected.
    H1:  As auditor partner tenure increases, the auditor’s integrity will not be affected.
3.     Ho:     Auditors add value to the integrity of financial statements.
 H1:   Auditors does not add value to the integrity of financial statements.
4.    Ho:   Audit detect errors and fraud in financial statements.
    H1:  Audit does not detect errors and fraud in the financial statements.
1.7     LIMITATIONS TO THE STUDY
The duration of the study was short leading to reduced sample selection and analysis.
Only five banks were selected and surveyed this sample was quite small.
Most of the bank visited usually gave a coloured or manipulated data, to either increase or reduce certain records
The study is not able to determine causality as the data is obtained from a single point in time.
The ability to draw inference from this study may be limited because the relationships identified in the year selected 2007 to 2011, may not be representative of the underlying relationship.

AUDITORS INTEGRITY: THE ROLE OF AUDITORS IN THE FINANCIAL STATEMENT

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Details

Type Project
Department Accounting
Project ID ACC0757
Price ₦3,000 ($9)
Chapters 5 Chapters
No of Pages 100 Pages
Methodology Chi Square
Reference YES
Format Microsoft Word

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    Details

    Type Project
    Department Accounting
    Project ID ACC0757
    Price ₦3,000 ($9)
    Chapters 5 Chapters
    No of Pages 100 Pages
    Methodology Chi Square
    Reference YES
    Format Microsoft Word

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