The Roles Of Auditor In Promoting Efficiency In Nigeria Banks (A Case Study Of United Bank For Africa)

Project and Seminar Material for Business Administration and Management BAM

Chapter One

Introduction

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:

Determine the need for an audit system or an auditor in Nigeria Banks.
To determine the role played in reliability of the financial statements of the universal banks.
To reveal the impact of their roles to the bank customer (that is, the auditors role to the customer).
To assess the problems of confronting auditors in the course of their assignment
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.

Chapter Five

Summary, Conclusion and Recommendation

5. 1 Summary

At the introductory stage of this work the general over view of the subject matter was given. Revealing the roles of auditors in enhancing efficiency in Nigeria financial institution and their aims and objectives were stated also.
If has been established that the function of financial institution is very vital to the national economic growth and development since the united bank for Africa is also among the financial institution who operates a universal banking services and prepare financial statement the need for an auditor arises.

In the previous chapter the research work have discussed vividly the role of an auditor in banking system, among this role of auditor is to make to share holders a report upon the annual balance sheet, profit and loss account of the bank and every other information as expected by the auditor to perform in reporting on the financial statement of banks and the central bank of Nigeria is duty bound to appoint an auditor in case the concerned bank fails to appoint one

5.2 Conclusion

In summary, attempt and effort has been made in bringing into focus the roles of auditor in financial statements. The objectives and the general qualities and other decrees and law that authorize the need for an auditor were also stated.

The survey of the structure of the Nigeria financial institution is dealt with extensively to show the essence of their existence and operations within and economy. Finally, the independence and ways of ensuring this independence of an auditor are dealt with in latter chapter of this write up. In the content the over all objectives of auditor were explained, the maintenance of independence of an auditor and the importance of auditing an organization’s account.

As financial adviser to the government the CBN (Central Bank of Nigeria) should not relent its effort in emphasizing the need for an auditor in order to minimize the pursuit of conflicting objectives. Various organs of the governmental machinery should be set for policy formulation and implementation.

5.3 Recommendations

As facts have been deduced from the research work it can be recommended that the roles of auditor are very important.

The following recommendations are made to enhance the efficiency of an auditor:

As highlighted in chapter 2.8 the auditor must be an independent person when carrying out his duties. Therefore, the research recommends the following to improving the independence of an auditor:

An auditor must have unrestricted access to records, assets and personnel of the organization.
Freedom to report to the higher management or audit committee
Scope to arrange his own priorities and activities.
If he is not saddled with non-audit assignment apart from his own normal audit work he is likely to be independent.
The financial sector of the country must be adequately monitor for proper implementation of the monetary policies to prevent distress or total collapsing of the sector e.g. the failed bank tribunal put in place to check the fraudulent practice in the financial institution.

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