Role Of External Auditors On Financial Accountability Of Managers In Nigeria Organizations A Case Study Of Union Bank Of Nigeria Plc Lagos Branch
TABLE OF CONTENTS
Title page – – – – – – – – – – i
Declaration – – – – – – – – – ii
Certification – – – – – – – – – – iii
Dedication – – – – – – – – – iv
Acknowledgement – – – – – – – – – v
Table of content – – – – – – – – – vii
List of tables – – – – – – – – – – x
Abstract – – – – – – – – – – xi
CHAPTER ONE: INTRODUCTION
1.1. Background to the study – – – – – – – – 1
1.2. Statement of problem – – – – – – – – – 3
1.3. Objectives of the study – – – – – – – – 4
1.4. Research questions – – – – – – – – 5
1.5. Research Hypothesis – – – – – – – – 5
1.6. Significance of the study – – – – – – – – 6
1.7. Scope of the study – – – – – – – – 6
1.8. Operational definition of terms – – – – – – – 7
1.9. Organization of the Study – – – – – – – 7
CHAPTER TWO: LITERATURE REVIEW
2.1. Introduction – – – – – – – – 8
2.2. Conceptual Literature – – – – — – 8
2.2.1. Auditing – – – – – – – – 8
2.2.2. External Auditing – – – – – – – – 10
2.2.3. Financial Accountability – – – – – – – 11
2.2.4. Bank – – – – – – – – – – 12
2.3. Reviews of Empirical Studies – – – – – – – 16
2.3.1. Flavianus Benedicto and Ng’eni (2016); Theoretical Aspects Underpinning Public
Sector Audit and Financial Accountability in Tanzanian Local Government
Authorities (LGAs) – – – – – – – – 16
2.3.2. Musa Success Jibrin, Success Ejura Blessing and Iyaji Danjuma (2014); The Role
of Auditors in the Recent Nigerian Banking Crisis – – – – – 17
2.3.3. Onyekwelu, Uche Lucy and Ugwuanyi, Uche Boniface (2014); External Auditing
Relevance in the Growth of Banking Industry in Nigeria: An Emphasis on the
Effect on Deposit Mobilization – – – – – – 18
2.4. Theoretical Review – – – – – – – – 19
2.4.1. Contingency Management Theory – – – – – – 19
2.4.2. The financial intermediation theory of banking – – – – 21
2.4.3. The fractional reserve theory of banking – – – – – 22
2.4.4. The credit creation theory of banking – – – – – – 22
2.5. Theoretical Framework – – – – – – – 23
CHAPTER THREE: RESEARCH METHODOLOGY
3.1. Introduction – – – – – – – – – – 25
3.2. Research Design – – – – – – – – – 25
3.3. Population of the Study – – – – – – – – 26
3.4. Sampling Size – – – – – – – – – 26
3.5. Sampling Technique – – – – – – – – 27
3.6. Instrument for Data Collection – – – – – – – 27
3.7. Method of Data Collection – – – – – – – 28
3.8. Validity/Reliability of Instrument – – – – – – 28
3.8.1. Reliability test – – – – – – – – – 28
3.9. Method of Data Analysis – – – – – – – 30
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1. Introduction – – – – – – – – – 31
4.2. Data Presentation/Analysis – – – – – – – 31
4.3. Testing of Hypothesis – – – – – – – – 35
4.4. Discussion of Findings – – – – – – – – 38
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1. Introduction – – – – – – – – – 39
5.2. Summary – – – – – – – – – 39
5.3. Conclusion – – – – – – – – – 40
5.4. Recommendations – – – – – – – – 41
5.5. Limitations to the Study – – – – – – – 42
5.6. Suggestions for Further Studies – – – – – – 43
REFERENCES – – – – – – – – – 44
APPENDIX – – – – – – – – – – 47
LIST OF TABLES
Table 1 Sex of Respondents – – – – – – – – 31
Table 2 Age distribution of Respondents – – – – – – 32
Table 3 Marital status of respondents – – – – – – 32
Table 4: Respondents views on whether there is need for external auditors by corporate
entities – – – – – – – – – – 33
Table 5: Respondents views on whether the use of external editors have help ensured credibility
of financial reports – – – – – – – – 34
Table 6: Respondents views on whether the use of external editor have help to ensure proper
returns from the branch – – – – – – – 35
Table 7: Respondents views on whether External editor have help prevent failure of the
organization – – – – – – – – – 35
Table 8: Test of Hypothesis I – – – – – – – – 37
Table 9: Test of Hypothesis II- – – – – – – – 39
ABSTRACT
This research work empirically explored the role of external auditors on financial accountability of managers in Nigeria organizations a case study of Union Bank of Nigeria PLC, Lagos branch. The objectives of this study were to examine the impact of external auditors on quality of financial reports, examine the impact of external auditors on influencing deposit growth. The scope of the study is Union Bank of Nigeria PLC, Lagos branch in 2020 making use of its staffs, contingency theory was used as a framework. The research design used for this study is survey, the population targeted for this study consists of staffs of Union Bank of Nigeria PLC, Lagos branch. 20 staffs were used as sample size and cluster sampling technique was applied. Instrument used for this study is the questionnaire. Data collected were collected from primary sources. From the analysis of the data, the findings shows that external auditors have helped to ensure quality of financial reports, the activities of external auditors does not influence on deposit growth. Following the findings, it was recommended that the use of external auditors should be embraced by most organization, external auditors should perform their duties properly. The study concludes that the use of external auditors has a positive impact on financial accountability of an organization.
Keywords: financial accountability, external auditors, organization, Union bank of Nigeria PLC.
CHAPTER ONE
INTRODUCTION
1.1. Background to the Study
Many organizations are required by law or by policy to hire an accountant to produce a periodic audit of the organization’s financial statements. Auditors affix qualifications or warnings to an audit report that exposes defects within the organization’s financial systems. The economic value of an audit opinion to users of financial statements is of great interest to academic researchers and accounting practitioners, especially in times when auditing is under considerable regulatory and public scrutiny Francis (2004); DeFond and Francis (2005).
Management of most banks is detached from owners (Principal-Agency Theory). Since stakeholders are not involved in the daily operations of the business, they may be doubtful of what the management may present to them as report of the organizations performance, thus the stake holders need confirmation or assurance by an independent party known as the external auditor. The usefulness and reliability of the audited financial statements of banks depend on the quality of audit and the integrity of the auditor. One of the measures of audit quality is the auditor’s report which contains important information for stakeholders about the quality of the financial statements as well as some indication towards the banks’ performance. While the audit quality is difficult to measure, the extent to the auditor is willing to issue qualified opinion often provides some indication of audit quality, Chen et-al (2005).
An external auditor performs an audit, in accordance with specific laws or rules, of the financial statement of a company, government entity, other legal entity, or organization and is independent of the entity being audited. The primary objectives of most organizations is to make profit and long-time survival. External auditing plays a crucial role in ensuring financial accountability of any organization. Accountability is when an individual or department is held responsible for the performance of a specific function. As an important source of organizational achievement, external auditors could be expected to be a vehicle to encourage accountability. The relationship between accountability and external auditors has been viewed as being influential in achieving organizational goals.
This study, therefore, is posed to assess the role of external auditors on financial accountability of managers in Nigeria organizations a case study of union bank of Nigeria PLC, Lagos branch.
1.2. Statement of the Research Problem
Every organization hopes to achieve accountability. External auditing functions are seen as powerful tool that could aid corporate performance. The sensitive nature of the banks especially in Nigeria has put more demand on external auditing reports. In the early 1990’s Nigeria experience the collapse of almost eighty (80%) of her first generation banks. In Nigeria, the ability to ensure accountability in organizations lies within the help of the external auditors.
Several studies have been carried out on the general role of the external auditing in areas of fraud prevention but few or none has been conducted on the role of external auditors on financial accountability of managers in Nigeria organizations. It is against this background that the researcher considered the role of external auditors on financial accountability of managers in Nigeria organizations a case study of Union Bank of Nigeria PLC.
1.3. Objectives of the study
The aim of this study was to assess the role of external auditors on financial accountability of managers in Nigeria organizations a case study of Union Bank of Nigeria PLC, Lagos branch. The specific objectives are to:
- examine the impact of external auditors on quality of financial reports.
- examine the impact of external auditors on influencing deposit growth.
1.4. Research Questions
This study will be guided by the following research questions:
- What is the impact of external auditors on quality of financial reports?
- To what extent does external auditors influence on deposit growth?
1.5 Research Hypothesis
The study is guided by the following hypothesis:
H0: There is no significant relationship between external auditors and quality of financial reports.
H0: There is no significant relationship between external auditors and deposit growth.
1.6. Significance of the Study
The critical nature of accountability in organizations is given, this is because it ensures development. The study will enable organizations in Nigeria to appraise external auditor’s framework for possible modification and modernization.
Empirically, this study is carried out to identify the role of external auditors on financial accountability of managers in Nigeria organizations. This study will be of utmost importance to investors, government and the researchers because it will provide policy recommendations to the various Nigeria stakeholders taking adequate measures in the banking industry for rapid capacity investment. The changing character of the banking industry has affected the industry in recent times and will push studies on the relevance of external auditing as tools for ensuring accountability to new evidence(s). It will contribute to existing literature on the subject matter. This study will be of benefit to;
The Academia: members of the academia will find the study relevant as it will also form basis for further research and a reference tool for academic works.
Government: this study will reveal to the government happenings in the banking industry. Formulation and implementation of policies based on this findings would ensure development in the area.
Investors: this study shall also be valuable to the investors especially those who may have research interest as it shall guide their private investment decisions.
1.6. Scope of the Study
This study is intended to examine the role of external auditors on financial accountability of managers in Nigeria organizations with particular emphasis Union Bank of Nigeria PLC in 2020.
1.7. Operational Definition of Terms
The following terms have been defined operationally.
- Accountability: the act or condition of being accountable.
- Role: the function assumed or part played by a person or thing in a particular situation.
- External auditor: a person who perform an audit in accordance with specified laws or rules of the financial statement of the company, government entity, or organization and is independent of the entity being audited.
- Organization: an entity comprising multiple people, such as an institution or an association that has a particular purpose.
1.9. Organization of the Study
This study is divided into five chapters. Chapter one is introduction which consists of the background to the study, statement of problem, research questions, research hypotheses, objectives of the study, the significance of the study, the scope and limitations of the study and finally the organization of the study. Chapter two deals with the literature review which consists of the conceptual literature, theoretical literature, empirical literature, theoretical framework. Chapter three gives the research methodology including research design, population of study, sample size, sampling technique, method of data collection, instrument of data analysis, method of data analysis, validity/reliability of instrument. Chapter four is presentation and analysis of data, discussion of findings. Chapter five gives the summary, conclusion and recommendations.
CHAPTER TWO
LITERATURE REVIEW
Do you need help? Talk to us right now: (+234) 08060082010, 08107932631 (Call/WhatsApp). Email: [email protected].IF YOU CAN'T FIND YOUR TOPIC, CLICK HERE TO HIRE A WRITER»
