ABSTRACT
This study was
specifically carried out to ascertain the roles and responsibilities of
external auditor in banking operation. A case study of three selected banks in
Aba.
In the year past, there
has been a misconception of the roles of external auditor in an organization or
a firm, in chapter one, it try to cover the introduction and that of the
explanation of the role of external auditor in an organization or an industry,
why chapter two and three cover the aspect of literature review and that of the
researcher methodology respectively. In term of chapter four and as well
chapter five treated about the data analysis how the data has been analyzed to
make the reader understand what the chapter is all about and it also went
further to summarize the data and as well the conclusion, recommendation and
that of the suggestions part items of further study or further research
respectively. Questionnaire, interview and observation were instrument sued to
elicit explanation from the employees of the banks in Aba, who formed the
respondents, the research also used tables, chi-square and percentage as the
statically instrument in analyzing the data collected. Finally, roles of
external auditor in banking operation will also help to re-define what really
are the roles of external auditor and their effect on banking operation. Using
the analytical and disciplinary research method, and with the case study
of three selected banks in Aba which include , first bank of Nigeria,
United bank for Africa Plc (UBA) and that of the intercontinental bank
Plc, it was discovered that, though a good and effective of external auditor
has been installed in the banking operation, so to speak, some of
the basic element are just there in principle, not in practice bank
rule and regulations. For instance, are not strictly adhered to, there are
inadequate accounting records, improper supervision, some fragment of
dishonesty among the staff, some of which are naturally disposed towards fraud,
and incompetent, and toad to these, detailed are not always
punished accordingly to serve as deterrent to others. Finally,
based on these discoveries, it was recommended that external auditor and
activities be more closely supervised and scrutinized to ensure that
they follow proper procedure as documented in the g banks handbooks programms
and procedures should be designed to employee, and as w ell develop staff that
will be competent and honest, elaborate accounting records should be created
and the staff should be re-oriented and the incorrigible ones should be
discipline accordingly to serve as deterrent to others.
TABLE OF CONTENTS
Chapter one
Introduction
1.1 Background
of the
study
1.2 Review
of the selected
banks
1.3 Statement
of the
problem
1.4 Purpose
of the
study
1.5 Research
question
1.6 Research
hypothesis
1.7 Delimitation
of the
study
1.8 Significant
of the
study
1.9 Definition
of terms
Chapter reference
Chapter two
2.1 Literature
review
2.2 An
auditor duties, statute and rightic
2.3 Auditor
ethical guide
2.4 The
roles of
auditor
2.5 Auditor
report and
concept
2.6 Fraud
prevention in
bank
2.7 Statement
of accounting standard and the prudential
guide.
2.8 Summary
of literature
review
Chapter reference
Chapter three
3.1 Introduction
3.2 Area
of the
design’
3.3 Population
of the
study
3.4 Sample
and sampling
techniques
3.5 Instruments
for data
collection
3.6 Reliability
of
instrument
3.7 Method
/data analysis
techniques
Chapter reference
Chapter four
4.1 Data
presented, analysis and interpretation
4.2 Analysis
and interpretation of data and
Questionnaire
4.3 Testing
of
hypothesis
4.4 Finding
of the
finding
4.5 Discussion
of the
finding
4.6 Chapter
reference.
Chapter five
5.1 Summary,
conclusion,
recommendation
5.2 Restatement of the
findings
5.3 Summary of the procedure used in the
study
5.4 Summary of the
study
5.5 Limitation of the study
5.6 Implication of the
study
5.7 Conclusion
5.8 Recommendation
5.9 Chapter reference
Bibliography
Appendix i
Appendix ii
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
OF THE STUDY
Ordinarily, an
auditor is one to whom the receipt and payment of an organization were read, as
is simplified in the Latin verb audira, to hear. This is so because in
the ancient time account and records of business, estate, trust and farms were
checked by their owners by their being called out by those who compiles them.
Auditing however, as it is known today is an independent examination of the
financial record and statement of business organization non-profit making
bodies, government parasatatrals etc with a view to reporting on them whether
they show a true and fair view.
The practice was known to have been exercised by such ancient
civilization as the Egyptians. But infact, the increased complexity of commerce
today ha greatly widened the scope of auditor operation and has called for a
high degree of skills and discernment likewise, the development of modern
accountancy and auditing is also credited to the great expansion in
industry and commerce, which has taken place since the industrial
revolution. It should be realized that the swift change in nature
has really created an increases in business transaction and investment in
limited liability companies, where share holders are not the manager of their
capital. This has thus provided the need for the manager to account to the
shareholder. On this note the government made provision for accounts of
companies to be examined and reported to the persons other than those who
manage the business.
The role of external auditor in banking operation have been investigated in
this research works using three selected banks in Aba as a case study for
the study. This is based on the fact that there are numerous banks with
branches in Aba and the following are the three selected banks to be
discussed.
i. FIRST
BANK OF NIGERIA
ii. UNITED
BANK FOR AFRICA PLC (UBA)
iii. INTER
CONTINENTAL BANK PLC.
1.2 REVIEW
OF THE SELECTED BANKS
First Bank traces its
ancestry banks to the first major financial Instruction founded in Nigeria,
hence the name. The current chairman is Dr. Ayoola Oba Otudeko, OFR. The bank
is the largest retail lender in the nation, while most bank gather funds from
consumers and loan it out to large corporations and multinationals, first banks
has created a small market for some of its retail clients.
At the end o August
2006, the bank had assets totaling 650billion Nigeria or $5billiopn dollars.
The bank was also the most highly capitalized stock on the Nigeria stock
exchange, and had about 10 billion outstanding shares. It has a subsidiary in
the United Kingdom, FBN bank (UK), which has a branch in Paris. The
bank also has representative offices in south Africa and China. The company was
named the best in Nigeria by Global Finance magazine in September
2006.
The first auditors
are Akintola Williams Deloitte and Touche (Chartered Accountant) and
KPMG Audit (Chartered Accountants) .
The firm has solid Short
and Long term ratings from Fitch and the Global Credit Rating
Company partly due to its low exposure to non-performing loans. The firms
compliance with financial laws has also strengthened with the Economic
financial crimes commission giving it a strong rating.
Due to spaces, I may see this is all I have about first Bank.
In terms of (UBA) which means United Bank for Frica Plc is the product of the
merge of Nigeria’s third (3rd) and firth (5th) largest
banks, namely the old UBA and the erstwhile standard trust bank Plc (STB)
respectively, and a subsequent acquisition of the erstwhile continental Trust
Bank Limited (CTB). The Union emerged as the first successful corporate
combination in the history of Nigerian Banking.
Today the United bank for Africa Plc is one of the Africa’s lading financial
Institution offering Universal banking to more than 7 million customer across
750 branches in 14 African countries with presence in new York, London and
Paris which assets in excess of $19 bn ,UBA is your partner for
banking services for Africans and African related businesses globally.
Lastly, Intercontinental bank Plc which established as a merchant bank in
February under the name, Nigeria Intercontinental Merchant Bank Limited.
Commenced business with paid up ordinary share capital of N12
million. In five years it become the most profitable merchant bank in Nigeria.
1989, September 1, The
first subsidiary, Intercontinental securities Limited (INTERSEC) and investment
company was s et up in 2000 converted to Universal Banking, 2002 became a
publicly quoted company listed on the Nigerian Stock Exchange with IPO of
288, 995,000 ordinary share, which was fully subscribed.
2004 Public offer of
2.75 million ordinary shared in December, in its quest to exceed the new N25
billion shareholders funds as prescribed by the CBN. Subsidiary by 136% and
reaffirming investors confidence in the banks. While 2005 was the
merging with three other banks. Equity, Gateway and Global in
October, 2005.
1.3 STATEMENT
OF THE PROBLEM.
Both Internal and
External auditor are there to contract and maintain of the financial balance
and upbringing of the organization. It is task for this researcher work to
investigate on the position effects and influence of the auditors.
Emphatically, the external auditors have over financial organization like the
banks.
Auditing has been the basic means to contract the financial system any
organization. despite the practice, the organization still present fruadful
financial statement and report to the public and certainly there has been
persistent fraudulent practice in the banks, which at the end gets the banks
distressed.
However, It could be questioned, how could this situation persist while
auditing practices had been inexistence in carrying out his research
work. Some problems have attracted special attention. These are as
follows:
i. Should
auditors be changed in two year or should they remain as already established,
that as been appointed annually by the banks.
ii. What
has been the reason for consistent fraudulent practices in the banks.
iii. What
are the actual roles the external auditor play in bank to enhance te growth of
the banks and for the bank to keep to standard as required by BOFIO and
CAMA.
iv. To
what extent should external auditor dive into the financial and managerial
systems of the banks?
1.5
PURPOSE OF THE STUDY
The aim of this study is
to critically look or examine the banking business In Nigeria and to also
identify the roles of the external auditors to install on effective and
efficient in banking operation. It is well known that one of the problem facing
banks in Nigeria is mismanagement of fund, loan and credits. Based on the
problems identified above the objectives of the researcher work includes the
following:
i. To
educate auditors lend credence to the accounts of the banks and to ensure
compliance with SASIO and IAS30.
ii. To
educate on the necessity of banks to keep in mind the essence to comply with
the provisions of the banks and other financial institutions decree, 1991.
iii. To
teach the banks to ensure compliance with the companies and allied matters Act (CVAMA)
1990.
iv. To
highlight the need for appropriate review and report upon the accounts and
balance sheet for banks by external auditors.
1.6 RESEARCH
QUESTIONS:
In view of this research
work, specific questions are pertinently identified to aid the accomplishment
of the intended aim. These include:
i. Does
the banks make provision for the external auditors whose it appoints to audit
the financial statement prepared by the banks.
ii. Has
the management of the bank with the help of the external auditor endeavored to
curtail the inadequate in financial report
iii. Do
banks accurately provide all the necessary book of records for verification and
investigation if it becomes very necessary?
iv. Has
the presence and investigative activities of auditors enabled bank to check
their fraudulent practices.
v. Has
inefficiency in cash and financial management resulted into deficiency in the
entire banks financial management resulted into deficiency in the entire banks
financial system control.
vi. Do
banks adhere to the requirement establishment by bank and other financial
institution decree 1991 and also that of the companies and allied Matters Act
1990.
vii. Have
the banks been keeping to the requirement of CAMA 1990 with regards to
preparing their annual financial report and statement.
1.7 HYPOTHESES
In view of the problems
and questions already mentioned and the objectives and the significance
set to be achieved in this research work, the hypotheses for this study my be
formulated for acceptance or rejection as follows:
Given that Ho = Null
Hypotheses and
Hi = Alternative Hypothesis.
i. Ho = Fraudulent
practice have not declined in the bank since
2000.
Hi =
Fraudulent practice have declined in the band since 2000
ii. Ho: = banks do not
employ the service of external auditors to audit and investigate their
financial statement, report and record. Council library
documentations were made use of also Abia Poly library and
other textbooks were made use of it in this research work. The work deals on
the history, nature, roles, and essentials of external auditors in banking
business in Nigeria.
1.8 SIGNIFICANCE
OF THE STUDY
To appreciate the
general significance of this research work, one will have to put into
consideration the roles of the external audit in bank and that of the
internal auditor. In considering this, the importance of this study are assed
by the need to ascertain tat bank keep up to the requirement of the banks
and other financial institution degree, 1991. other importance include
the following:
i. The
government regulations on banks are being acknowledged by the external
auditors, however, making sure that they are continuously put to effect
by banks.
ii. Also
the auditors roles ins established in the view to assessing in general
the financial background of the banks aiming at putting to a stop
the issues of distress.
iii. It
creates room f or possible assessment of the banks financial reports enabling
the entire public to receive what they bargained for this is a true and
fair reviewed re[ort.
iv. The
investors are opportuned to understand the financial reporting nature of banks
thus knowledgeable detecting true and fair viewed report which might be
measures to them in their business with banks.
v. The
project will provide for any student carrying out a similar topic or further
research work on this subject a solid foundation for the realization of
his or her researcher purposes of works.
vi. This
study is also in partial fulfillment of the requirement for the award of Higher
national Diploma (HND) Degree in Accountancy to the research.
1.9 DEFINITION
OF TERMS
This aspect of the
research work is of utmost importance to enable the user of the research
finding to appreciate thoroughly the research work in its entirety. The
following are the definition of some terms used in the project work.
v Banking Business: According
to BOFIO, it is a business of receiving deposit, a current account, savings
account or other similar account paying or collecting cheques drawn by or paid
by customers, provision of financial or such other business as the Government
(or the central bank of Nigeria) may order published in the Gazzette
designated as banking business .
v Accounting Polices: Accounting
Polices encompasses the principle base connections, rate and procedures adopted
by management in preparing and presenting financial statement. They are
the specific accounting bases followed, for items considered to be material in
the determination of profit or loss for the period and stating matters in the
financial partition.
v An Audit: It is an
Independent examination of the financial records and statement of business
organization non-profit masking bodies, government parastatals etc with a
view to reporting on them whether they show a true and fair view.
v Internal Check: Is the part
of internal control system which deals with the organization and preparation of
the book-keeping and other clerical duties in such a way as
to ensure that no single task is executed from its
inception to its completion by only one person and the work of each
clerk engaged upon a task is subject to an independent check in the
course of another’s duties.
v Substantive Test: the
auditing standard and Guideline in internal control defines
substantive test a s “those test of transaction and balances and
other procedures such as analytical reviews, which seek to provide audit
evidence as to the completeness, accuracy and validity of the information
contained in the accounting records.
v Vouching: Vouching is the
examination of the documentary evidences put forward to support the entries in
a clients accounting records. A voucher is any document, which forms ten
basis for an entry in the accounting records.
v Fraud: Fraud is
referred to those acts, which include the sue of deception to obtain an illegal
or unjust financial advantages and is also an intentional mis-statement
in or Omission of accounts or disclosure from an entity’s accounting records of
financial statement.
v Chi-square Test (X2): This
is a text statistic used to test whether an observed
series of value differ significantly from what was expected. It is
employed for testing more than two population properties.
Department | Banking and Finance |
Project ID Code | BFN0218 |
Chapters | 5 Chapters |
No of Pages | 99 pages |
Methodology | Chi Square |
Reference | YES |
Format | Microsoft Word |
Price | ₦4000, $15 |
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Contact Us On | +2347043069458 |