The Problems Encountered By External Auditors In Auditing Nigerian Companies
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This project is dedicated to the Almighty God who has sustained me through these years of study. Secondly, I dedicate this project to my beloved families Mr. and Mrs. Albert Nwachukwu and Mr. and Mrs. David Aguwamba those who shown concern and understanding throughout these years. Furthermore, to all my friends and well wishers who have contributed to the success of this project.
I give all the glory to the Almighty God for this project. I heartily thank my lecturers for their immense support and encouragement; my special gratitude goes to my project supervisor Dr. Bartho N. Okezie for his painstaking supervision throughout this period.
I acknowledge the understanding of my brothers and my sisters and my parents through out this period even my room mates who contribute to my success, may the Almighty God reward them all in a special way.
I also acknowledge the understanding of everybody who in one way or the other supported me during this period. thanks to you all.
This work is designed to examine the problem encountered by external auditors in auditing Nigerian companies, there causes, and there effect on the work of auditors and also the possible solution 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 the study, objectives of the study, research questions, the significance of the study, scope and limitations of the study were also discussed, including the definitions of technical terms.
Chapter two was a review of previous literature and studies. In this chapter, previous literature on theoretical issues of auditing, types of auditing, qualification, appointment, removal and redress available to auditors were discussed. The chapter also covered that problem of external auditors in auditing Nigerian companies.
In chapter three, the procedures or methodology and design adopted in carrying out the research were described. It also highlighted the sources of data and data collection technique, and location of data.
Chapter four explained the actual presentation and analysis of data obtained. The result of the research finding which confirmed that external auditors have problems in auditing Nigerian companies, were presented in tabular form and analyzed.
In chapter five, the summary of the finding, recommendations and conclusion were covered. One of the recommendations was that auditors should help to update the knowledge of the client staff by organizing training and programmes for them. In fact, this work has been interesting one and will be of great help in its audience.
Table Of Contents
- Title Page
- Approval Page
- Table of Contents
- 1.0 Introduction
- 1.1 Background of the Study
- 1.2 Statement of the Problems
- 1.3 Objectives of the Study
- 1.4 Research Questions
- 1.5 Statement of Hypothesis Hypothesis
- 1.6 Significance of the Study
- 1.7 The Scope of the Study
- 1.8 Limitations of the Study
- 1.9 Definition of Terms
- 2.0 Literature Review
- 2.1 Introduction
- 2.2 Developing of Auditing
- 2.3 Types of Auditing
- 2.4 Qualification of Auditors
- 2.5 Appointment of Auditors
- 2.6 Removal of Auditors and Redress Available to them
- 2.7 The Problems of External Auditors in Nigeria Companies
- 3.0 Research Design And Methodology
- 3.1 Introduction
- 3.2 Research Design
- 3.3 Sources/Method Of Data Collection
- 3.4 Population And Sample Size
- 3.5 Sampling Techniques
- 3.6 Validity And Reliability Of Measuring Instrument
- 3.7 Method Of Data Analysis
- 4.0 Presentation And Analysis Of Data
- 4.1 Introduction
- 4.2 Presentation Of Data
- 4.3 Analysis Of Data
- 4.4 Testing Of Hypothesis
- 4.4 Interpretation Of Result
- 5.0 Summary of Findings, Recommendations and Conclusion
- 5.1 Introduction
- 5.2 Summary of Findings
- 5.3 Conclusion
- 4.4 Recommendations
External auditor is an audit professional who performs an audit in accordance with specific law or rules on the financial statement of a company government entity, either legal entity or organization, and who is independent of the entity being audited.
There are problems which external auditor faces such as lack of visible evidence inn the computerized system, the use of unqualified accounting staff by the client, lack of proper keeping of books and records. The auditor also encounters problem in the areas of information supply; problem in the Nigerian business circle is fraud.
1.1 Background Of The Study
The significance of auditing in the accounting profession has been since the inception of business activities from a sole proprietorship to large public enterprises. According to experts, it is a very vital instrument of financial reporting. It forms the bed rock of placing reliance on report presented by the steward of companies on the state of affairs of the companies. The various interest groups in the business organization are to be assured that their interest are being protected. The owners of the business (shareholders) are concerned to be guaranteed that the management is performing its duties effectively.
Their ultimate aim is to receive as much returns as possible from the capital which they invested in the business. The government on their own part is interested in knowing whether the profit and loss shown in the financial statement is correctly prepared for the purpose of tax assessment.
Auditors’ reports are used by the company’s advisers (the legal, financial analysts) to give advice to the management. The legal adviser interprets the legal implication of some information disclosed in the financial statement. The financial analyst also uses the result shown by the auditors to advice the clients on the best source of fund to embark on, where to invest and how much to invest in each alternative.
The auditors are always seen as the watchdog of the entire economy by representing the interest of all these various groups. Their peculiar position therefore calls for a conducive atmosphere, but it is unfortunate that most external auditor encounter serious problem in the performance of their duties. This research work therefore tends to investigate into the nature and causes of these problem and also proper solution to them.
1.2 Statement Of Problems
There are various problems facing external auditor in Nigeria. Auditor sometimes find it very difficult fo audit Nigerian companies as a result of expansion of business activities illiteracy, moral laxity, lack of adequate technical skill and training. This work studies these problems, their causes, effects and remedies.
1.3 Objectives Of The Study
The objectives of embarking on this study include:
- To ascertain the nature of the problem which the external auditors face while auditing Nigerian companies.
- To identify the cause of the problems
- To ascertain the effects of these problems on the work of the auditors
- To recommend measures that could enable external auditors to overcome the problem identified
- To recommend measures to be taken to overcome those problem.
1.4 Research Question
- Can the problem which the external auditors face while auditing Nigerian companies be checked
- Is there any cause of the problems faced by external auditors
- Is there any effects of these problems on the work of the auditors
- Can there be any measures that could enable external auditors to overcome the problem identified
1.5 Statement Of Hypothesis
- H0: external auditors do not have problems in auditing Nigerian companies
- (H1) external auditors have problems in auditing Nigerian companies
1.6 Significance Of The Study
This study will enable the new or intending auditors to be aware of the problems they will encounter in the course of performing their duties and be able to guard against them. It will also enable government to know how it can play its role in creating a better and conducive atmosphere for auditor who has been engaged to perform any duty in the Nigerian companies.
Again, it is expected that this study will consider contributions of directors in Nigerian companies toward a better auditing atmosphere in their various companies.
Furthermore, this study will form a good reference material for any other student who may wish to embark on related topic in future.
1.7 The Scope Of The Study
The study will not exceed problems encountered by external auditors in Nigerian companies. It will consider the effects of these problems on the work of the auditors and proffer possible solution to the problem.
1.8 Limitation Of The Study
There are many constraint facing the researcher during her study in this field such constraints include:
The time that is made available for carrying out the study is limited. Most often, it is interrupted by other academic programme and circular work.
Shortage Of Finance:
There is an insufficient fund to meet up with financial demand required. As a result some research procedures, methods, techniques and process intended for this study will not be applied because of the cost involvement.
Scarcity Of Local Data:
Most of the text book that deal with the problem under review are foreign texts and are no longer current.
Non Available Problem:
In spite of several calls, some officers who the researcher wants to interview cannot be reached at because of their office schedule.
1.9 Definition Of Terms
An auditor is a person who examines tha book of accounts and vouchers of an organization in such a manner as to enable him express an opinion as to whether the accounts show a true and fair view of the state of affairs of the organization at a particular period.
This is a person employed in an organization whose responsibility is to review the operations and record of the business of the organization and to keep management informed of its operation on a more continuous basis.
The company or business organization audited by the external auditors.
PERMANENT FILE:the permanent file contains information of permanent nature which are of continuing relevance to the auditor as regards to the operation and financial statements of the company being audited.
The current file (working file) contains documents and working papers which relate to the current year’s audit.
A system file contains details of an organizations system of accounting and internal control i.e. the system of the organization documentation both manual and computer system.
Internal check is defined as the allocation of authority and duty in such a manner that afford check on the routine transactions of day to day work by means of work of one person being complementary to that of another person.
This report shall state whether in the auditor’s opinion the annual account has been properly prepared in accordance with the companies and allied matter decree and whether the account shows a true and affair view of the company’s state of affairs.
I bet you, the complete material is fully loaded. This is just an excerpt. The Material is in MS-Word Format which you can easily edit and is comprehensive for a complete research work for this topic
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How to nail it on the head during your project defence
You are through with writing that project. Now what?
You have found yourself at that point where you have to defend what you have written. Of course you have to stand in front of your supervisor and other literary personalities to prove that you know what you wrote in your project paper. Unfortunately, the more you think about it, the more it looks like you are about to face a legion. It is not a war. But the emotion of dread welling up inside of you makes it look like one. So now you are asking yourself questions.
- How am I going to start?
- I hope I will do well enough to get an A.
You really want to nail it, but you need to come to terms with exactly how to get everything in perfect control. Especially your emotions of fear that seem to make a wreck of you every time you think about public speaking.
So here is the deal. I want to help you avoid that feeling that would ruin your precious moment if you dare to let it. And we are going to do it together.
I am going to highlight some very important tips to help you get in control for you to be comfortable enough to move from that feeling of DREAD to CONFIDENT; and making an awesome Impression for that great rating your supervisors should be giving to you so freely.
Consider these tips as you prepare for your defence. We will be taking them one after the other so here we go.
Watch Your Body Language And Keep It Confident:
Can you tell that a person is falling apart if they look confident? … If I can second guess you rightly, am sure you answered no to that question. Remind yourself that you need to come out that way. Now this might seem like a huge big deal when you are dealing with the foreboding. Maintaining a poise of confidence is very important. So find your most comfortable position, sitting or standing and draw up your body. You must exude confidence. It is something you need to do for yourself. People can only see what you allow your body language to show. So you must endeavour to put that out. Remember the story of David and Goliath? … At the end of your defence day, you want to be David.
Dress In Your Most Comfortable And Impressive:
Am sure this one is a no brainer. However I must highlight that you choose comfortable pieces. You don’t want to look so good and yet look like you were forced to wear something that does not belong to you. It’s great to ensure that as impressive as your clothes are on you, that they are also very comfortable.
Speak With Authority:
Going hand to hand with that aura of confidence is your most powerful asset:your words. If you look that confident, your words must not come out like whimpers. To be able to pull this off, you definitely need to speak as deliberately as possible in expressing yourself. Let them also hear what they see.
Use, Your Gestures:
I have often found this to come to my rescue in dealing with shyness and conveying my confidence. Usually it gives you an edge to also drive home your point. You must, however, ensure that you do not over use it. It doesn’t mean that your hands should be flying all over the place. That would be absolutely unnecessary. If you do this well, after a while you will realize that you are not as self-conscious as you used to be at the very start. For most situations, it would have completely disappeared altogether; leaving a really confident you talking.
Have A Good Opening And Closing Line:
Make sure you have perfected a good opening line. You should also be armed with a good closing line too. Try and rehearse it to a friend. If for the first time you presented it, your friend does not say “wow, that’s beautiful” or something like that; just know you need to keep refining it until you get the perfect line. Both opening and closing lines will go a long way in how impressed your panel gets to rate you high.
Make Sure You Know Your Work:
Certainly you should understand how important it is to know your own work from start to finish. Not having in-depth knowledge of your own work is tantamount to a suicide mission. Why should you kill yourself?
When all is said and done, this is what you came to defend in the first place. You should know your work from A to Z.
Prepare For The Questions:
Now this part is truly essential. You must be sure you do not floor all the good work you did on your presentation by not answering correctly. You must pay attention to the questions you are asked to be sure you will give the right answer. Many people get it wrong at this stage and spoil their good presentation. When you do not understand any question do endeavour to ask the person to expatiate what they mean before you answer.
These tips are by no means exhaustive, but applying these tips will give you some necessary advantage you need for a great outcome. Of course that outcome would mean that you eventually earn all your points on this project.
The structure of a good project work
Undergraduate projects in Nigeria is a prerequisite for graduation amongst Nigerian tertiary students who will which to obtain bachelors degree in their respective courses of study such as accounting, banking and finance, business administration and a host of others. Writing an undergraduate project in Nigeria for final year students entails a lot both financially and otherwise. Being able to develop any final year project depends on getting a researchable topic whether it is Accounting Undergraduate project topics, Banking and Finance research topics or banking and finance project topics and materials and it all requires diligent hard work of students who are willing to develop best undergraduate projects in Nigeria and graduate in flying colors.
A typical Undergraduate project in Nigerian tertiary institutions can be said to be divided into five or six chapters depending on the format of the school and course of study which are
The introduction of an undergraduate project states the main research problem and research argument. What precisely the study is all about and why it is important. It looks at the originality of the research work and how it will fill the gap in other studies. Justification for a research undergraduate topic should not be lengthy before it has been explicitly stated.
Below are the contents in chapter one of an undergraduate research project which includes;
- Background of the study,
- Statement of the problem,
- Objectives or aims of the study,
- The research questions,
- Research hypothesis,
- Significance of the study,
- Scope of the study,
- Limitations of the study and
- Operational definition of terms.
2. Literature review
Literature review of any undergraduate research work, be it business administration project topics or Economics project topics just to mention a few is very critical to securing a high grade in one’s project work. The literature review of a research process uncovers what other writers have written about the student’s topic. A student’s undergraduate research work should include a discussion or review of what is known about the subject and how that knowledge was acquired. The review could conclude with a brief summary of the literature and its implications. The contents of the literature review are the theoretical review, conceptual framework, empirical review and summary of literature review.
3. Research Methodology
This section includes a description of the research methods used in the undergraduate research work such as the sample size, data collection methods, measurement instruments, research data analysis procedures and the population from which the sample was selected. This section also describes the method used in selecting the sample or samples, validation and reliability of the instruments used in the research work. There are different research statistical techniques used in undergraduate research work such as SPSS, e-views etc.
4. Results & Discussion
This section presents and discusses the data analysis results used in an undergraduate research work, the results of each analysis is being summarized, tabulated, and then discussed for each research question. Then for each research hypothesis, the statistical test of significance selected and applied to the data is briefly described, followed by a statement indicating whether the hypothesis was supported or not supported. In presenting the result analyses/summary in an undergraduate project tables and figures and or graph are used to add clarity to the presentation.
5. Summary, Conclusions And Recommendations
This section summarizes the findings of the study in an easy to understand manner. It also explains the practical implications of those findings, and points to recommended directions for future research in that area.
This is where every source cited in the undergraduate research work is being included. Every undergraduate research work must be properly referenced for its authenticity.
Choosing A Good Project / Research Topic
Students in Nigerian universities these days wish to choose a very simple project topic/material. There is no issue choosing a simple project topic; the only problem is your ability to choose a good project or research topic that your supervisor will easily approve for you.
Most project supervisors really want to see how good his or her project student understands his or her surrounding through the kind of topic he or she chooses for their project work.
There are some project topic that are not reject-able; for instance in Nigeria of today; what do you think is the major issue on ground now?
If a project student can choose or craft a topic on the effect of dollar increment on the economy of Nigeria. Such project topic will be very interesting to write on.
Now what are the qualities of a good project topic?
- The materials for the project topic must be easily assessable.
- The project topic itself must be meaningful.
- The variables must be able to give a clear aim of the project topic.
What do I mean by variable?
Well I am deriving my point from the area of ; the variables here are those main words in the project topic.
Like the above project topic; the effect of dollar increment on the economy of Nigeria. You can see the main variables that really define this project topic are:dollar, increment and economy.
Before you present your topic to your project supervisor, first of all understand your project topic, and then secondly try to do some research for your topic to see if at least you can get up to 60% of what you need to write the complete project.
I said that above because you might have a very nice topic that the materials are not available online and there are no books as regard the topic; in this case the project topic becomes difficult for you even though the topic is catchy.
What do I mean by your topic being assessable?
Well what I mean is very simple and easy to understand. Simply pick your project topic, type it on google and see if you will have at least a good background for the topic you are writing on.
If you can have a good background for your project topic and you can understand the problem associated with the project topic, then I believe the aim of the project is not far-fetched.