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1.1 Back Ground of the Study

In recent years, the independence of an auditor has come under criticism. This is because the essence of auditing was to authenticate the true and fairness of the financial statement, and to give a true picture of the financial statement of the reporting entity, and to give credibility to it. This however has not been achieved, as the public has been mislead by “window dressed” financial statement which the auditor has audited and gives an unqualified opinion; and thus mislead the users of this financial statement who relied on it credibility.

          Many critics have observed that the public accounting profession has done little to police its own members.  Due to the fact that most companies which had been wound up had it financial statement audited within the year and a high margin of profit reported , and yet nothing is done to the auditors who authenticate and attest to it credibility. This and so many other cases put forward by Taylor and Glezen (1994) has brought to light some dismal performance of some auditing firms. Among the prominent case of criminal action against auditors is certified professional midwives (CPMs) in United States Vs Natali (1975) where two auditors where convicted of criminal liability under the 1934 act for certifying financial statement of national student marketing corporation that contain inadequate disclosures pertaining to account receivable. The fraud was so extensive and the audit work so poor that the court concluded that the auditors must have been aware of the fraud and where guilty of complacency.

          However, Azubuike (2005) state that auditing is derived from the Latin word AUDIRS which means to hear. Auditing profession emanate as a result of the development in the business organization over the years from sole proprietorship to partnership and then to corporate entities, ownership continue to be separated from the control (management) of the business.

 Ikechukwu and Bridget (2004) Opine that today  providers of capital that is business owners or share holders engage managers (steward) to run the business organization on their behalf. They managers are accountable to the owners then the question arises: How true or correct are the presentation of the managers to the owners of the business on the day-to-day running of the business.

          An intermediary (Auditor) comes into play to mediate between to owners and the management.

          Ikechukwu and Bridget (2004) define audit as the independence examination if an expression of opinion on the financial statement of an enterprise by appointed auditor in pursuance of that appointment and in compliance by any relevant statutory obligation.

          Okezie (1995) see  An audit in a process carried out by a suitable, qualified accountants or auditors whereby the accounts of business entities including charities, trust and professional firms are subjected to scrutiny in such a details as to enable the auditor to form an opinion as to the accuracy, truth and fairness. This opinion is then embodies in an “audit report” (attestation) address to interested parties who commission the audit or to whom the auditors are responsible. For this audit report to be of high quality there is need for professional independence.

Professional independence in the context of this work means the independence of the external auditor which entails independence from parties which way have an interest in the business being audited. Independence requires integrity and objective approach to the audit work or process. The concept requires the auditor to carry-out his or her work freely and in an objective manner.

          Aderibigbe (2005) opines that professional independence however is a concept fundamental to the accountancy profession. Baker (2005) stated that professional independence refers to the independence   of the auditor from parties, that have an interest in the financial statement of an entity. It is essentially an attitude of mind characterized by integrity and an objective approach to the audit process. This concept requires the auditor to carry out his work freely and in an objective manner.

There are two important aspect of independence which must be distinguished from each other these are:

·        The real independence (in fact)

·        Independence in operation

However, both are important in achieving the goal of independence.

          Real independence is concern with state of mind an auditor is in and how the auditors acts or deal with a specific situation. An auditor who is independence “in fact” has the ability to make independence decisions even if there is a perceived lack of independence present, or if he is place on a compromising position by companies directors while independence in appearance has to do with the auditors mental attitude and personal integrity, since it is difficult to measure his appearance (Taylor and Glezen 1994).  There is no independence without quality control being achieved.

Myring and Bloom (2006) defines quality control as consisting all measure and procedures carried out within the audit process to guarantee the quality of audit work and of the resulting report. Quality control is paramount in audit practice because complete independence may never be achieved but quality control can reduce the percentage of interference to a minimum.

          Thus it is imperative to the business and the auditing profession that a high quality controlled independent audit be attained to ensure that the suspicion of owners and investors are reduced to the barest minimum. The task is not as easy as it is said but requires extra commitment.


Independence in auditing of companies financial statements is a major problem in the field of auditing because in practice there are circumstances which empower the directors to appoint the auditor and also fixed their remunerations. This act undermines and question the independence of an auditors and where directors who are responsible for the preparation of the financial statements to be audited are in position to hire and pay those who are to audit them- put the auditors, in a difficult position and threatens his independence.


The main objective of the study is to evaluate the level of independence and the benefit of quality control in an audit. This study however specifically seeks to;

i)        To ascertain the challenges to auditors independence in an audit

ii)       To ascertain the methods and techniques adopted in ensuring independence

iii)      Evaluate the benefit quality control measures in the audit process

iv)      Explore avenues of ensuring auditors independence.

1.4                 RESEARCH QUESTION

          In other to achieve the objective of the study and proffering solution to problem of study, the following research question were formulated:

a)      What are the challenges to auditors independence in an audit?

b)   What method and techniques can be adopted to ensure independence?

c).     How has the quality control measures assisted in the audit process?

d)      What avenues could be used in enhancing auditors        independence?


          It is conceived that at the completion of the study its findings would be beneficial to.

          The management of business entities who are contributors to the subject in consideration.

          The accounting profession and auditors in their different engagements and assist them to project a good image of accounting profession

          Research students who may want to use the study as a source of reference in their academic pursuit.

          The entire public (Investors and potential investors) who rely on the external auditor for economic decision making.


This study covers auditors independence and quality control in audit practice of the following selected audit firm in Uyo metropolis:

1.      Thomas Gamble and Co (chartered accountant).

2.      Jimmy Akpan and Co (Chartered accountant).

However these research have some constraints to its scope and coverage, these include:

a)      AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study  

b)      TIME: The time frame allocated to the study does not enhance wider coverage as the researcher have to combine other academic activities and examinations with the study.

c)      Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.


a)      Auditor: An auditor is a person who examines the books, account and vouchers of an organization in such a way as would enable him to express an opinion as to whether the account show a true and fair state of affairs of the organization in a particular period. (Omeje 1990)

b)      External Auditor: Akpakpan (2006) defines external auditor as an independent public accountant who is an outside auditor and who is not employed by the organization engaging him in the audit work.

c)      CLIENT: The company or business organization audited by the external auditor

d)      Financial statement: Akakpan (2002) defines financial statement as the financial data or reports concerning an organization. Financial statement or report is a formal record of the financial activities of a business, person or other entity. It consist of statement of financial position, statement of comprehensive income, income statement, value added statement, statement of source and application of find.

e)      Working papers: Audit working papers contain information from accounting and statistical records, personal observation, they result interview and enquires and other available sources.

          Working papers according to meigs etal (1982) includes all the written records, of the work performed by the auditors, the methods and procedures that followed and the conclusion they developed. The information contained there constitutes the principal evidence of the auditors work and their resulting conclusion.


An accounting term that encompasses the conventions rules and procedures necessary to define accepted accounting practice at a particular time. GAAP as used in reports include accounting principles and practice as well as the methods of applying them.


          These are rules of conduct imposed by professional Accounting bodies on their members as a guideline on audit work.

H)      Peer View: Taylor and Glezen (1994) define peer view as review of an audit firms systems and procedures, approaches and audit standards generally conducted by another audit firm of comparable size and reputation

i)        Quality control standards: Ginaker (1965) state that quality control standard are standards for establishing quality control policies and procedures that provide reasonable assurance that all of a certified public accountants firms audit are conducted in accordance with professional standards.

J)      Policies: These are ground rules and criteria to be applied when talking decisions relating to a particular function or activity. policies established boundaries that restrict the scope and nature of decisions concerning specific issues.

Hot Review: This is a review carried out by a special manager appointed to review on the completion of each audit (Millichamp 2002).

Quality control: Millichamp (2002) Opine that quality control is the means by which a firms obtains reasonable assurance that it expression of audit opinion always reflect observance of approved audit standards and statutory of contractual requirement and any professional standards set by the firm itself. This is to say that it is generally concerned with the maintenance of standards within a professional office.


          This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), statement of problem, objectives of the study, research question, significance or the study, research methodology, definition of terms and historical background of the study. Chapter two highlight the theoretical framework on which the study its based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study.


          In the study, the researcher chooses a select audit firm for they research and they include:

Thomas Gamble and Co (Chartered Accountants): Thomas Gamble and Co is a well developed and experienced professional accounting firm registered with the corporate affairs commission with registration No 25612 of 10th September 1984. The firm was established with a view to providing a first class service delivery as auditors, project administrators, financial consultants advisors and other auxiliary services.

          They firm has three (3) offices:- Uyo, Calabar and kaduna. The partners of the firm include:

-        Obong I.J Gamble-principal partner- Uyo office Mr. Mkpanam Akpata- Partner Calabar Office Mr. Ephraim Thomas partner Kaduna office.


          The firm most valuable resourced have been their committed experience and highly skilled staff supported by an integrated team of consultants. These have been their competitive advantage. This therefore is what propels them to provide solution to variety of problems and services: The firm renders the following services.

a)      AUDITING: This is the firm largest single activity and it covers limited liability companies’ public corporations statutory bodies and individual business of all type. Their system ensures close supervision review and also personal services of the partners with a view to satisfying enabling laws as well as standards laid down by the accounting profession. The firm maintains a strict code of conduct as regards confidentiality, integrity and independence

b)      Project administration: The firm Co-ordinate project executions monitoring the work done by the main and sub contractors, ensuring that contractors are duly paid for only Job done. They also liaise with relevant regulatory authorities to ensure that the project is executed without any hindrance

c)      Investigation: The firm conducts investigations in special circumstances including financial investigation in the event of acquisition mergers and sales of business or fraud.  

d)      Tax Consultancy: They firm helps to prepare tax returns and liaise with the inland or internal revenue on behalf of clients for the purpose of determining and advising them in their tax liability.

e)      Accounting: The give advice and assistance on accountancy matters and this include;

-        Preparation and presentation of financial statement

-        Ge

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