TABLE OF CONTENTS

Tittle                                                                                                                                    Page

Title page        -           -           -           -           -           -           -           -           -           -           i

Declaration      -           -           -           -           -           -           -           -           -           -           ii

Certification    -           -           -           -           -           -           -           -           -           -           iii

Dedication      -           -           -           -           -           -           -           -           -           -           iv Acknowledgement.-            -           -           -           -           -           -           -           -           -           v Table of Contents    -           -           -            -           -           -           -           -           -           vi  

Abstract          -           -           -           -           -           -           -           -           -           -           viii

CHAPTER ONE:

INTRODUCTION

1.1 Background of the Study-            -           -           -           -           -           -           -           -           1

1.2 Statement of Problem       -           -           -           -           -           -           -           -           2

1.3 Research question -           -           -           -           -           -           -           -           -           3 

1.4 Research objectives           -           -           -           -           -           -           -           -           3

1.5 Research hypothesis          -           -           -           -           -           -           -           -           3

1.6 Scope of the study            -           -           -           -           -           -           -           -           -           4

1.7 Significant of the study-   -           -           -           -           -           -           -           -           4

CHAPTER TWO:

LITERATURE REVIEW

2.1 Introduction          -           -           -           -           -           -           -           -           -           5

2.2 Concept of Auditing         -           -           -           -           -           -           -           -           5

2.3 Concept of Auditor’s opinion       -           -           -           -           -           -           -           7

2.4 Concept of financial reporting quality      -           -           -           -           -           -           13

2.5 Empirical   -           -           -           -           -           -           -           -           -           -           19

2.6 Theoretical framework      -           -           -           -           -           -           -           -           22

2.7 Summary   -           -           -           -           -           -           -           -           -           -           22

CHAPTER THREE:

RESEARCH METHODOLOGY

3.1 Introduction          -           -           -           -           -           -           -           -           -           24

3.2 Research design    -           -           -           -           -           -           -           -           -           24

3.3 Population and sample size           -           -           -           -           -           -           -           24

3.4 Methods of data collection           -           -           -           -           -           -           -           26

3.5 Techniques of data analysis          -           -           -           -           -           -           -           26

3.6 Variable specification-      -           -           -           -           -           -           -           -           28

3.7 Justification of methods and techniques used      -           -           -           -           -           29

3.8 Summary   -           -           -           -           -           -           -           -           -           -           29

CHAPTER FOUR:

RESULTS

4.1 Introduction          -           -           -           -           -           -           -           -           -           30

4.2 Data presentation- -           -           -           -           -           -           -           -           -           30

4.3 Data analysis-        -           -           -           -           -           -           -           -           -           33

4.4 Test of hypothesis-            -           -           -           -           -           -           -           -           35

4.5 Discussion of findings      -           -           -           -           -           -           -           -           36

4.6 Summary   -           -           -           -           -           -           -           -           -           -           38

CHAPTER FIVE:

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary   -           -           -           -           -           -           -           -           -           -           39

5.2 Conclusion -          -           -           -           -           -           -           -           -           -           40

5.3 Recommendations -          -           -           -           -           -           -           -           -           41

5.4 Limitation of study-          -           -           -           -           -           -           -           -           42

5.5 Suggestion for further studies      -           -           -           -           -           -           -           42

References.-    -           -           -           -           -           -           -           -           -           -           43

Appendixes-    -           -           -           -           -           -           -           -           -           -           47 

 

ABSTRACT

Financial auditing – this study focuses on auditor’s opinion and financial reporting quality in the Department of operations and accounts at the main branch of First Bank Plc. Kaduna. This is the method of data collection where the data are from the original sources and used directly for the purpose of this research it is originally collected for. The major method adopted for collecting data for the purpose of this research is questionnaire. Nnamocha (2005) noted that the data analysis technique “include instruments to be employed and procedures adopted on how the data collected will be analyzed and what type of statistics and other quantitative technique will be employed”. The respondents which are mainly represent the opinion of administrative and internal audit staff of First Bank of Nigeria, Kaduna main branch from the department of operations and accounts with not more than two years in such position present the following analysis as discussed in the major findings: The internal auditors whose primary responsibility in the organization is to see that the report of the banks are properly presented must be given the opportunity and the independence to that. Any form of administrative resistance can jeopardise the quality of the financial reporting given by the auditors. During the course of this research, certain observations from the data obtained and analysed as presented necessitated some recommendations. As such, the following recommendations are given by this study: The study agreed that the inclusion of auditor’s opinion significantly affects the quality of financial reporting. The role of internal auditors of the First Bank possesses a degree of independence, while carrying out their responsibilities in the organisation. An auditor’s opinion is the outcome of an auditor’s review of an organisation financial statement the crucial nature of auditing in ensuring the integrity and reliability of financial information cannot be overemphasised. It is for this reason that all organisation need the attestation of financial statement by the auditors. The investigation launched by the financial regulators and other stakeholders in the banking industry revealed that auditors have not done their work properly due to unqualified audit report.

 

 

CHAPTER ONE

INTRODUCTION

1.1              Background of 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. This qualification serves as a protection to the auditor in that the auditor’s opinion of the organization’s fiscal policies is subject to the qualified item being corrected.

The qualified audit indicates that there are areas of concern in the presentation of financial data that may need to be addressed by an organization’s management. These areas may be minor in scope. They should, however, be addressed as soon as possible to prevent abuse. In fact, a qualified finding may actually provide the read map to those who would commit malfeasance if any underlying practice of concern is not addressed. An audit report that does not contain qualification is a positive affirmation of organization management, Messier and Emby (2005).

A qualified audit report is issued when the auditor encountered one of two types of situations which do not comply with generally accepted accounting principles, however the rest of the financial statements are fairly presented. This type of opinion is very similar to an unqualified or “clean opinion”, but the report states that the financial statements are fairly presented with a certain exception which is otherwise misstated.

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 which the auditor is willing to issue qualified opinion often provides some indication of audit quality, Chen K. and Church B. (1992).

In respect of the banking crisis, attention has focused on the role of accountants and auditors who have been involved. Accountants and auditors may be expected to report financial irregularities in company accounts by enhancing transparency and accountability and by developing techniques for fraud detection.

1.2              Statement of the Problem

The crucial nature of auditing in ensuring the integrity and reliability of financial information cannot be overemphasized. It is for this reason that many countries require the attestation of financial statements by auditors. Unfortunately, there are criticisms of the auditor from which opinions have emerged over the years as a result of bank that have failed. This criticism of auditors in Nigeria by users of audited financial statements has stirred many response both from the profession and statues.

The investigations launched by the financial regulators and other stakeholders into the Nigerian banking industry revealed that accountants and auditors have not done their work properly; because the nature of qualified audit report practice in Nigeria does not    conform to   qualified audit  report theory. Despite the distress, some banks   have opened

New branches in some parts of the country while others have ceased operations and changed names to keystone bank, Mainstreet bank, Enterprise bank and some were acquired. What factors attributed to the distress, change of names and acquiring of those banks? Could it be as a result of the inability of auditors to give qualified audit opinion that conform to theoretical framework; about the capital structure, unethical management practices, customers’ patronage, loss of goodwill or just to change the names? Faith in the audit that is essential to auditor’s job diminished because of several crimes left undetected in Nigerian banking industry, until billions of naira were lost through the chief Executive Officer’s (CEO). Insider trading abuse of some Nigerian commercial bank such as Afribank Plc, Intercontinental bank, Oceanic bank International Plc, Union bank, and First Inland bank Waziri (2009).

1.3              Research Questions

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