TITLE PAGE
THE PROBLEMS ENCOUNTERED BY EXTERNAL AUDITORS IN AUDITING NIGERIAN COMPANIES
(A CASE STUDY OF AKINTOLA WILLIAMS AND CO. CHARTERED ACCOUNTANT, ENUGU)
ABSTRACT
This work is a partial fulfillment of the requirement for the award of Higher National Diploma in Accountancy. It is also designed in such a way as to help readers understand the problems encountered by external auditors in auditing Nigerian companies, their causes, their effects on the work of auditors and the possible solutions to eradicate these problems.
Chapter one was designed to give an overview of the research work. This chapter of the project dealt with the background of study, statement of hypothesis, significance of the study and scope then limitations. Also covered here is the definition of technical terms.
Chapter two was a review of previous work of other people on related literature and studies. Under this section, previous literature on the definition of auditing, types of auditing, qualification of auditors, appointment of auditors, removal & resignation of auditors and the problems of external auditors in auditing Nigerian companies were discussed.
In chapter three, the procedures or methodology adopted for carrying out the research was described. It highlighted the source of data, the research instrument and location of data.
Chapter four shared the actual presentation and analysis of the research obtained. The result of the research findings were presented in the stable terms and analyzed.
In chapter five, the summary of the findings recommendations and conclusion were covered. In fact the work has been an interesting one and will be of great help to its audience.
TABLE OF CONTENTS
CHAPTER ONE
INTRODUCTION
1.1Background of study
1.2Statement of problems
1.3Purpose of study
1.4Research questions
1.5Research hypothesis
1.6Significant of the study
1.7Scope and limitation of the study
1.8Definition of terms
CHAPTER TWO
2.0REVIEW OF RELATED LITERATURE
2.1Definition of auditing
2.2History of auditing
2.3Objectives of auditing
2.4Types of auditing
2.5Qualification of auditors
2.5.1Institute of chartered accountants of Nigeria (ICAN)
2.5.2Association of national accountants of Nigeria (ANAN)
2.6Appointment of auditors
2.7Removal of auditors and redress available to them
2.8The problems of external auditors in Nigerian companies
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
3.1Sources of data
3.2Location of data
3.3Population size and sample selection
3.4Method of data presentation
3.5History of Akintola Williams & Co
CHAPTER FOUR
DATA PRESENTATION & ANALYSIS
4.1Presentation and analysis response questionnaires
4.2Oral interview
4.3Testing of hypothesis
CHAPTER FIVE
FINDINGS, RECOMMENDATIONS AND CONCLUSION
5.1Summary of findings
5.2Recommendations
5.3Conclusion
Bibliography
CHAPTER ONE
INTRODUCTION
Many groups are interested to be assured of their interests being protected in the business organizations. The owners of the business (shareholders) having been concern to be guaranteed the management is performing its duties effectively and efficiently. Their ultimate aim is to receive as much returns as possible from the capital they invested in the business.
On its own part, the government is interested in knowing whether the profit & loss shown in the financial statement is correctly done for the purpose of tax assessment.
The companies advisers (the legal, financial analysts) also make use of the auditors report to advice the management. The legal adviser interprets the legal implications of some information disclosed in the financial statement. Also, the financial analyst uses the result shown by the auditors to advise the clients on the best source of fund to embark on, where to invest and how much to invest in each alternative. The competitors may also be attracted to merge with the auditors clients through the report issued by him.
However, the auditors can always be seen as the watchdog of the entire economy by representing the interest of all these groups. Their peculiar position therefore calls for a conducive atmosphere, but, it is unfortunate that most external auditors face serious problems in performance of their duties. In any case, this research work tends to investigate into the nature and causes of these problems and also solutions to them.
There are many problems facing external auditors in Nigeria. Auditors in Nigeria, even the most successful ones find it very difficult to audit Nigerian companies as a result of business activities, illiteracy, moral laxity lack of adequate technical skill and training. This work studies these problems, their causes, effect and remedie
RESEARCH QUESTIONS
In carrying out this work, the following questions were in the mind of the researcher.
RESEARCH HYPOTHESIS
There are different opinions about the problems of external auditors in auditing Nigerian companies. Some experts are of the view that they do not have any problems in auditing Nigerian companies while others contend that they do have. As a result of these opposing ideas, two types of hypothesis were employed to facilitate this research work. They are started as follows:
It is a true saying that people can suffer for lack of knowledge. If auditors are not aware of the problems they will encounter in the performance of their duties they will invariably not be able to guard against them. This work saves as an eye opener to draw their attention to these problems and the ways to tackle them.
Again, it enables the government to know how it can play its role in crating better auditing atmosphere in the Nigerian companies.
Furthermore, it is expected that this should study the contributions of directors of the Nigeria business enterprise towards a better auditing environment in their companies.
This study will also form a good reference material for any other student who wants to write on a related topic in future.
The study does not exceed the problems encountered by external auditors in auditing Nigerian companies and their effect on the work of auditors.
The auditors considered here are those in all the different forms of business organizations in Nigeria. There were, however, a lot of constraints facing the researcher who is doing her study. They include:-
a. Time factor:- The period of time available for carrying out this research was very short. Moreover, the short period is filled with other academic programmes.
b. Shortage of finance:- Some research procedures, techniques, methods and processes will not be applied in this work because of the cost involved. There is no sufficient funds to meet up with them.
c. Scanty of local data:- Most of the texts that deal with the problem under review are foreign texts and are not current. There are only few local material available. This makes the collection of data not to be easy.
d. Non-response problem:- Inspite of all explanations as to the purpose of this study, some people can still refuse to answer the research questions that will be passed across them. This will make some questionnaires to be returned blank.
Auditor: A person who examine the books of accounts and voucher of an organization in such a way as to enable him express an opinion as whether the account shows a true and fair view of the state of affairs of the organization in a particular period.
Internal auditor:- This is a person employed in an organization that has the responsibility of reviewing the operation and records of the business of that organization.
Client: The company or business organization audited by the extern al auditors.
Permanent file: The permanent file usually contains documents and matter of continuing relevance of the operation and financial statement of the company or other organization whose account are being audited. The item includes:
a. Rules and regulations governing the enterprise memorandum and articles of association, partnership agreement, stock exchange regulation, building society rules where necessary, statutory material governing the conduct, account and audit of the organization being audited.
b. A brief description of the nature of business actually carried on and the registered office.
c. An organizational chart showing various departments and sections, the names of responsible officials showing lines of responsibility.
d. List of accounting records and documents and the officials responsible for them.
c. A outline history of the organization. Reference should be made by share capital, prospectuses, reserves, acquisition of business etc.
d. Clients i
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