THE ROLE OF EXTERNAL AUDITORS ON FINANCIAL ACCOUNTABILITY OF MANAGERS IN NIGERIA ORGANIZATIONS (A CASE STUDY OF UNION BANK OF NIGERIA PLC. AKWA BRANCH)
An audit is the independent examination of, and expression of
Opinion on the financial statements of enterprises by an auditor. In pursuance of this objective, he may disclose defalcations and irregularities, which are capable of impairing the truth and fairness of the financial statement.
In recent years there has been considerable debate over the extent of the statutory auditors responsibility for the detection of fraud. This has been stimulated by the continued uncertainty over the extent of the auditors liability to third parties for negligent audit work. It is obvious that failure to detect a major fraud may lead to a loss for the client or some third party to whom a duty of care is owned. The important question is low far do the auditor’s responsibilities.
The auditing profession had always hold tight to the opinion that the primary responsibility for both prevention detection of fraud and other irregularities rest with management. The auditor’s duties do not require him specially to search for fraud unless required by stature or the specific term of his engagement. In accordance with normal practice, audit will be planned primary to enable us to express our professional opinion, and auditor merely obliged to plan his work and design his procedures so that he has a reasonable chance of detecting those, illegalness which might impair the truth and fairness of the financial statement.
A BRIEF HISTORY OF UNION BANK OF NIGERIA PLC.
Union Bank is one of the foremost commercial bank today with every strong capital ban.
The bank which was formerly known as Dominion Colonial Overseas (DCO) started banking business in Nigeria in 1917. The bank today has so many branches scattered all over world. The bank also branched into other business such as Union Assurance Company Ltd. Union Homes Savings and Loan Ltd. Union on March into union stock broke etc.
1.2 PURPOSE OF THE PROBLEM
The aim of the study is to critically look or examined the
banking business in Nigeria and identifying the role the external auditors play in fraud detection.
It is well known that one of the problem facing banks in Nigeria is mismanagement of fund or inappropriate accounting for receipts and payments. Based on the problem identified above, the objectives of the research work include: –
1.3 SIGNIFICANCE OF THE STUDY
To appreciate the overall significance of this research work,
one will have to put into consideration the roles of the external auditors of fraud detection.
In considering this, the importance of this study is dressed by the head to ascertain that banks keep up to the requirements of the banks.
1.3 PURPOSE OF STUDY
This study aims at assessing the internal audit as a subsystem of internal control being operated in the bank.
i. The purposes are outlined below
ii. To aid good accounting system
iii. To eliminate wastage and losses
iv. To survey the external audit unit of union bank Plc. Head quarters
at Victoria Island so as to review the predominant audit practice
in the bank.
v. To point out deficiencies in the internal control system used by
vi. To appoint out the implications of the system and suggest
Recommendation that will bring improvement.
vii. To evaluate the expenditure procedure of the bank.
To ensure adherence management policies procedures, secure completeness and accuracy of record and safe guard all assets.
1.4 STATEMENT OF THE PROBLEM
It is a test to this research work to investigate on the positive
effects and influences the auditors, most emphatically the external auditors have financial organization like banks.
Auditing has the basic means to control the financial system of organizations still present fraudulent financial statements, financial and reports to the public and certainly there has been persistent gradient practice in the banks which at the end gets the banks distressed.
However, it could be questioned, how could this situation persist while auditing process had been in existence. In carrying out his research work some problems have attracted special attention.
They are as follows: –
1.5 HYPOTHESIS FORMULATION
In view of the problems and questions already mentioned and
the objectives and significance set to be achieved in this research work, the hypothesis for this may be formulated for acceptance or rejection as follows:
given Ho = null Hypothesis and
Hi = Alternative Hypothesis
1. Ho: Fraudulent practices have not declined in the bank since
Hi: Fraudulent practices have declined in the bank since
2. Ho: bank have not been employing the services of external
auditors to audit and investigate their financial statements, reports and records.
Hi: Bank have been employing the services of external audit
and investigate their financial statement, report and records.
3. Ho: The management of banks have been accepting
recommend shows and specialized ideas or advices of auditors managing finance .
4. Hi: The management o banks have been deception recommendation and specialized ideas or advices of auditors in managing their finance.
1.6 SCOPES AND LIMITATION
The research work is to enable the auditor discuss on union
banks Plc. And their various affordable auditors, stating the auditors objective, roles and services in the bank. In view of this, the project covers the auditing of Union Bank Nigeria Plc.
The research work has identified the role of external auditor in fraud detection.
In as much a these are so many branches of Union bank Plc. In specific towns and location around the country the scope of this study has been subjected within the Union Bank of Nigeria Plc. Akwa.
The Awka branch was taken as the case study since it can represent the entire branches of Union Banks, as they all exhibit and maintain similar functions, business transactions and the some organizational frame work.
1.7 LIMITATIONS OF THE STUDY
In the course of this study, some limiting factors were
encountered by the researched.
Thus regents interruption with lectures, test and private studies was not in common consequently limited time was available for the study.
1.8 DEFINITION OF TERMS
The analogy o learning accounting, auditing and learning
language is not perfect, but the similarities the significant. Some terms used in auditing could have different meaning from that used outside business hence, the need to define the following terms from auditing perspective for clear understanding as they would be used in this study.
The following are the definitions of the terms used in this project work.
It is an undependable examination of and expression of opinion on the financial statements of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevant statutory obligations.
This encourages the principles bases, contentious, role and procedures adopted by managements in preparing and presenting financial statement.
Are all the relevant and reliable data or information obtaining and recorded by the auditor n arriving at conclusion of the audit work bases in independent opinion on financial statement.
This means establishing the existence ownership, valuation, and presentation of assets and liabilities a the balance sheet date.
Are test, which seek to ensure the auditors at the external control procedures are being applied as prescribed.
Are those test on transactions and balance on other procedures such as analytical review, which seek to provide audit evidence as to the completeness, accuracy and validity of the information constrained in the accounting records or financial statements.
CHI-SQUARE TEST (X2)
A test statistic used to test whether an observed serves of value differ significantly from which was expected.
It is employed for testing more than two population properties.
This is communicated statement of opinion based upon convincing evidence by an independent competent authoritative person, concerning the degree of correspondence in all material aspects of accounting and information communicated by an entity with established criteria.