SIGNIFICANCE OF EXTERNAL AUDITOR’S ON THE EXAMINATION OF FINANCIAL STATEMENT

ABSTRACT

This study was to assess the significance external auditor‟s in the examination of financial statement of first Bank of Nigeria Plc., Enugu. The banking sector in Nigeria and elsewhere in recent times have become so diversified, challenging, highly competitive and has been characterized by persistent, fraud, errors and misappropriation of funds in the bank, the impact of which has undoubtedly shaken the whole economy of the nation. For this work to be effectively and efficiently carried out the use of primary and secondary methods was adopted for the collection of data, where in primary data, the researcher designed and advanced questionnaires to first Bank Enugu for collection of primary data while secondary data was gotten from textbooks, journals, manuals lecture notes, etc. the data collected from the questionnaire was analyzed in tables with simple percentage and interpreted for the understanding of the study the formulated hypothesis were tested using Z – test formula. The result of the study shows that, external auditors examination of first banks financial statement or records aids in checking and monitoring as well as stopping frauds errors, misappropriation of funds in the Banks. Recommendations were made to the management of First Bank of Nigeria Plc, Abuja.

CHAPTER ONEINTRODUCTION1.1 BACKGROUND OF THE STUDY

It is obvious that enormous resources of money and material are being utilized by corporate organizations. In recent years the numbers and monetary values of public sector activities have increased substantially. This increase in activities have brought within an added demand for accountability.
Auditing is one of the elements of accountability. Shareholders and government are responsible for ensuring that appropriate audit are made and reports therefore acted upon. Financial auditing contributes to public account ability since it provide independent report or whether the financial information represent a true and fair view of the organization‟s financial stand, the internal controls and the compliances with laws and regulation.
As an external auditor, his auditing exercise embrace the examination of the financial report of the organization in order to see whether the account have been prepared in accordance or in compliance with general accepted accounting principle (GAAP) and applicable laws, ethics and regulations and in the process errors or fraud maybe detected (mill-champ 1990). Since huge monetary resources are utilized by the financial institutions of public organization, errors which tend to lead fraud may exist and is not disclose in the report may contain errors or mistakes that cause it to be deliberately misleading or the report may fail to disclose relevant information. All these maybe revealed through an audit work done by the external auditor since he is independent of management.
The responsibly of external auditors for ensuring high ethical standard with an organization as a lesser one than internal auditors, for the year only occasional visitors to the company and can only look at a fraction of numbers of transactions that internal auditor will not normally be directly involved in the establishment of the policies within an organization which would include policies of an ethnic nature.
Therefore, their ability to shape the ethnical nature of an organization is critically affected by the attitude of the management. If the management are prepared to establish procedures
demanding the highest ethnical standard from employees, and demonstrates that themselves to these standard, then the ability of external audit to help enforce ethnical standards is greatly enhanced. Based on these factors, it interest the researcher to know the place of external auditors on the examination of the financial statement.

1.2 STATEMENT OF THE PROBLEM

The goal of every business is to make profit and profit is to be made when total revenue exceeds total operating cost and losses when the reverse is the case.
In view of the above, it is therefore necessary for firms to strive to manage their affairs effectively and efficiently in order to make profit achieve their objective; they do by setting various auditing systems to check mate these.
To reduce cost and at the same time impose quality service (product) and as well received in acceptance of the costumer, effective and efficiency control of asset inventory cash human resources as well as reduce the liabilities, financial abnormalities, misappropriation and embezzlement of money, and adequate external audit measures has been established in the bank to aid the management in curbing the above mentioned variables. Despite the existence of internal audit system the bank still experience some financial anomalies which prompt this research work to study the significance of external auditors on examination of financial statement in the bank.

1.3 OBJECTIVE OF THE STUDY

The main objective of the study is to determine the significance of external auditor on the examination of financial statement. To find out the significance of external auditors in examining the financial statement of the first bank Nigeria plc. To find out the modern techniques employed by the auditor management in reducing fraud, errors and misappropriation. To identify the problem associated with examination of financial statement.

1.4 RESEARCH QUESTIONS

The following research questions guided the study; What are the significance of external auditors in examining the financial statement o first bank Nigeria plc.
What are the modern techniques employed by the auditors/management in reducing errors and misappropriation. How do we identify the problems associated with examination of financial statement

1.5 RESEARCH HYPOTHESES

Based on the stated problem as well as the need for the study, there is need for a set of hypothesis that will act as a guide for the work. Such hypothesis might be true but such a conclusion can only be made at the end of the study.
The hypotheses are,
Hypothesis one
H0: There is no relationship between the financial statement of the bank and audit examination.
H1: There is a relationship between the financial statement of the bank and audit examination.
Hypothesis two
H0: The auditor‟s report does not represent a true and fair view of the performance of the organization.

Order the full materials for this project from chapter one to References.

Was it interesting? If it was then don’t forget to share this Project Materials with your other friends and circle too. You may never know that your share may be proven helpful for many of the Final Year Student out there. So, keep sharing and liking our content over social media and Google plus.