CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
Auditors derived their roles from some
sources among which are: (a) Companies and Allied Matters Decree 1990 (CAMD
1990) (b) Bank and Other Financial Institution Decree (BOFID 1991). Number 2 of
the decree states their functions. (c) Their roles are also specified in other
financial disclosure requirement for the universal banking system in Nigeria.
The role of an Auditor can not be
overemphasized in any organization.
An Auditor is a person whose job is to
carefully check the accuracy of business records. Auditors can be either an
independent auditor (auditors that are not affiliated with the company which
they audit), or a captive auditor, some are elected public officials. The term
auditor is sometimes synonymous with “comptroller”. Auditor helps to ensure
that forms are run effectively and their records are kept accurately, taxes
paid properly and on time. Their main duties is to carry out an examination
which enables them to determine whether a firm’s record has being properly
recorded.
1.2 STATEMENT OF THE PROBLEM
Recently in Nigeria, banks were going
into liquidation, acquisition, merger and recapitalization; and before any of
these can take effect, an auditor is needed to give the financial stand of the
bank. Part of these is what leads the researcher to the topic in order to
enable the UBA (United Bank for Africa) and CBN (Central Banks of Nigeria) and
all other financial institution involved to know the roles of auditors in banking
system.
1.3 RESEARCH QUESTIONS
The research work is aimed at
addressing the general roles of auditors in the banking system in Nigeria.
Auditors reports are considered essential tools when reporting financial
information to users particularly in business. Since many third party users
prefers or even require financial information to be certified by an independent
external auditor, many audited rely on auditors reports to certify their information
in order to attract investors, obtain loans, and improve public appearance.
1.4 PURPOSE OF THE STUDY
This research work tries to examine
the auditor’s roles in the Nigeria banks, since all banks (both UBA) and other
are involved in the same monetary transaction.
The purpose of this research work is
to:
(a)Determine the need for an
audit system or an auditor in Nigeria Banks.
(b)To determine the role played
in reliability of the financial statements of the universal banks.
(c)To reveal the impact of their
roles to the bank customer (that is, the auditors role to the customer).
(d)To assess the problems of
confronting auditors in the course of their assignment
(e)To examine the effectiveness
of their report.
1.5 SCOPE OF THE STUDY
This research write-up examines the
historical background of auditors, their roles to the United Bank for Africa
(UBA) and the entire banking system. If also gives an in depth look into the
impact of auditors on all commercial stakeholders.
The study is also centered on the
Nigeria banking sectors and other financial institution. It also states the
exemplary performances of auditors.
1.6 LIMITATION OF THE STUDY
Major constraint encounter in the
prices of writing this research topic were during data collection. The data
were collected from the UBA staff and it was given to the researcher under
strict compliance with certain rules and regulation.
Also, the financial aspect of this
project also demanded lot money were used during transportation to the bank and
in buying stationeries. Time was also consumed in pursuing UBA staffs when
searching for relevant data(s) and information.
1.7 SIGNIFICANT OF THE STUDY
Since the inception of Obasanjo’s Administration in 1999, a
lot of questions was erupted as regards to the performance of commercial banks
in Nigeria in relations to the role played by the auditors, this will make this
research work of more benefit to any willing individual that wish to know how
efficient and effective the work of an auditor is and their impact to the
economic growth and development.
This research word is also significant for shareholders who
are willing to invest in one bank or the other (it serves as a guideline to
investment).
Finally, this research work is significant for the
government in order to know the appropriate measures to be taken in formulating
plans and policies for the financial institutions in Nigeria.
1.8 DEFINITIONS OF OPERATIONAL TERMS
(1)
FINANCIAL STATEMENT: – These are part of a company annual report, the purpose
of which is to communicate information about the company to those who are
eligible to it,
(2)
MANAGEMENT: – This involves all those people that engage in the efficient
running of the firm. They are the one who perform the stewardship function in
an organization.
(3)
FRAUD: – This is a deception, deliberately practiced in order to secure unfair
or unlawful gain. In other words, it is the intentional misrepresentation of
financial information by one or more individual among the management, employees
or third parties of an organization.
(4)
AUDITEE: – an individual, firm or an organization that is being audited.
(5)
SHAREHOLDERS: – they are the rightful owners of the company which resources are
contributed together towards the running of the business.