Policeman Theory and Contemporary Auditing in Nigeria: An Empirical Investigation of Past and Present (original) (raw)

An Assessment of Audit Approach and Audit Quality in Nigeria

The paper addresses the contemporary issue of quest for improved public confidence in financial reporting in Nigeria and the understanding of issues surrounding the way and manner that Nigerian auditors' carry out their work. Therefore, the aim of this study is to assess the audit approach in the light of audit quality and the assurances that the financial statement provide. In spite of the number of changes that have taken place in the audit profession during the past twenty years which have changed the way external auditors operate and manage their activities in proving the statutory attest function on the financial statements, there is paucity of research focused on the way auditors' carry out their attest function in the midst of dwindling investors' confidence in Nigeria. Using a survey design, the questions that were raised in the study were answered using descriptive and inferential statistics. F-statistics was used in providing answers to the propositions raised in the study. Findings from the study show that respondents believe that auditors' requirement to comply with ethical standards is a crucial factor in sustaining investors' confidence. There is also evidence that the size, complexity and clients' business risk are crucial factors in choice of audit approach in Nigeria. While significant differences were found in respondents' perception of audit quality been a function of audit approach, it was otherwise on the effect of traditional audit impact on audit quality. The study suggests that there is the need for the profession to gear its effort towards adherence to ethics of the profession in Nigeria, ensure adherence and enforcement of high ethical standard. Audit approach should be based on size, complexity and clients' business risk in the effort towards restoring the confidence of users of financial statements in Nigeria.

Critiquing the Audit Process in Nigeria for Effective Auditing and Financial Reporting

Critiquing the Audit Process in Nigeria for Effective Auditing and Financial Reporting, 2017

This study examines the role of Nigerian auditors in giving assurance for financial statements of public companies by evaluating existing legal frameworks on auditing and financial reporting, with a view to identifying gaps that need to be addressed to improve audit quality and reliability. The study is underscored by the fact that auditors were implicated in financial scandals the world over, including Nigeria. The paper examines the efficacy of Nigerian provisions and comparatively analyses them considering global reforms post-Enron. It recognises the efforts Nigerian policy and lawmakers have made over time to ensure a reliable and effective audit process and financial reporting. However, it identifies the shortcomings in the frameworks and makes recommendations on how they can be addressed effectively. In particular, the paper makes the case that, rather than have many oversight bodies as is presently the case, these should be streamlined to avoid duplication of efforts. The paper concludes by recommending urgent provision of auditing standards and, sufficient guidance for reporting on internal controls for financial reporting with a view to providing greater assurance and reliability for financial statements.

Auditing Profession in Peril: Strategic Quality Assurance Measures as the Way Forward in Nigeria

Indian-Pacific Journal of Accounting and Finance, 2022

Corporate collapses, business failures and fraudulent financial reporting scandals have led to a very turbulent time, resulting in a credibility crisis for the auditing profession as a whole. There is an increasing demand on auditors by regulators, third parties, and users of their services in terms of their responsibilities and duties to perform. Using the secondary data research approach, this paper examines the reasons why auditing is proving risky and expensive. It finds out that audits have evolved from routine checklists to a vital part of the corporate governance process of companies and that the auditing profession must be actively dynamic and proactive in order to surmount modern day challenges which have drastically impacted the profession. It concludes that unless the profession, the regulators, and users of the services of auditors come together to review the profession, it might be difficult to source value adding auditors in the future. It recommends, amongst others, t...

Fighting the Scourge of Audit Failures in Nigeria- the Search for Audit Quality

International Journal of Academic Research in Business and Social Sciences

The objective of this conceptual study is to draw attention to the scourge of audit failures in Nigeria, its consequences for the capital market and suggest what is to be done to ameliorate the situation and enhance audit quality. Our literature search reveals that audit failure is a serious problem in Nigeria with dire consequences for the capital market and the auditing profession in Nigeria. We chronicle some of the suggestions made at various fora to tackle this problem. We recommend, among others, immediate mandatory introduction of Forensic audits for say every 5 years for public interest entities in Nigeria, strengthening of corporate governance institutions for more effectiveness, introduction of joint audits and tackling headlong cultural factors militating against audit quality in Nigeria.

Users’ Perceptions on Auditors’ Responsibilities for Fraud Prevention, Detection and Audit Expectation GAP in Nigeria

Asian Journal of Economics, Business and Accounting

The role of auditors is highly important in today's business environment as a result of the separation of ownership from control considering numerous shareholders in the companies. One of the areas that posed a challenge is where users of financial statements perceive the roles of auditors concerning fraud prevention and detection. This paper examined users' perceptions of the auditors' responsibility for fraud prevention, fraud detection and audit expectation gap (AEG) in Nigeria. The study adopts a survey research design in which 200 copies of the questionnaires were administered to academics, accountants, investors, stockbrokers and bankers in Kano and Jigawa States of Nigeria. In addition, three hypotheses were formulated and tested using One-way Analysis of Variance (ANOVA). The findings of this study revealed that AEG exists in the area of fraud prevention and detection in Nigeria. In view of this, the paper suggests that proper enlightenment to the public, investors and potential investors about the audit function and auditor's responsibilities concerning fraud prevention and detection should be employed by the regulators, professional accounting bodies and other stakeholders as this could help in reducing the AEG in Nigeria.

AUDITING STANDARDS AND AUDITORS PERFORMANCE: THE NIGERIAN EXPERINECE

In this paper an attempt is made to demonstrate the application of auditing standards on auditor's performance. The study involves firms in Nigeria. A 13-item questionnaire constructs by the researchers, validated by two experts and which has an internal consistency coefficient of 23 percent served as the instrument of data collection. This study, empirically using ordinary least square (OLS), reveals that the external auditors in Nigeria are complying with standards and many criticisms were directed to International Auditing Standards. Consequently, the research suggests the need for more interpretations, clarifications and improvements to be more applicable and suitable for the Nigerian auditing environment.

Stakeholders' Perception of Audit Performance Gap in Nigeria

International Journal of Accounting and Financial Reporting, 2011

The audit expectation gap is critical to the auditing profession because the greater the unfulfilled expectation from the public, the lower the credibility earning potential and prestige associated with the work of auditors. The study examined the level and nature of expectation gap (performance gap) between auditors and users of financial statements. It sought to establish whether or not there are differences between users of financial statements and auditors' perception of management responsibility for the preparation of financial statements, its reliability and decision usefulness. Chi-square (χ 2) was used to analyze the data obtained from the study. The data were obtained through questionnaire. Two hundred and fifty (250) copies of the instrument were distributed using purposive sampling technique. In this study, a cross-sectional survey was conducted to capture the perceptions of users of financial statements in Nigeria. The tests of hypothesis were done using Statistical Package for Social Science (SPSS) version 14.0. Tests were carried out at a significant level of 5% and four degree of freedom. The findings of this study indicated that there is a wide expectation gap in the areas of auditors' responsibility for fraud prevention and detection. There is no generally accepted description of the role of the auditor. Audit scandals had negative impact on auditor's credibility. The users of financial statements should be enlightened more on the responsibilities of auditors on the financial statements, the role of the auditor should be clarified and quality control measures should be observed in audit firms.

DETERMINANTS OF AUDIT QUALITY IN NIGERIA: EVIDENCE FROM LISTED CONSUMER GOODS SECTOR IN NIGERIA

Academy of Accounting and Financial Studies Journal,, 2022

The general public and specific stakeholders have expressed apprehension as regards the degraded quality of the external audit report. The concept of audit quality and its determinants has been a debatable issue over the decades. The current study examined the determinants of audit quality in the context of the Nigerian listed consumer goods companies. Using the ex-post facto research, a sample of six (6) companies were randomly selected from a population of twenty existing companies as at 31st December 2020. Necessary data for the study was spooled from the audited annual financial statement of the considered companies for an eight-year period from 2012 when IFRSs became operational in Nigeria to the 2019 financial year. Correlation and regression analysis were carried out using SPSS version 22. The outcome of the study revealed a statistically non-significant but positive relationship with the board size as a proxy for corporate governance, audit firm size and company size on one hand, and audit quality on the other hand. However, a negative and statistically insignificant relationship is established between the tenure of the audit firm and audit quality in the Nigerian consumer goods sector. The following recommendations are proposed: (i) Policy measures should be put in place to regulate the activities of auditors so as to checkmate unreasonably long-term auditor-client relationship which may jeopardize objectivity and independence. (ii) Small audit firms should be encouraged to form partnerships so as to boost their capacity so as to enhance their audit engagement quality to big client companies.