Role Of Auditors In Mitigating Fraud And Corruption In Corporate Firms In Nigeria

Role Of Auditors In Mitigating Fraud And Corruption In Corporate Firms In Nigeria

Abstract

In this exploration work on the part of adjudicators in mollifying fraud and corruption in Nigeria with particular reference to Nigerian Breweries Plc 9th afar corner Enugu. The experimenter examined the significance of adjudicators in controlling fraud and corruption in Nigerian breweries plc. estimated the effect of fraud and corruption on the profitability of a commercial establishment. Caught on the extent at relationship between the duty of the adjudicator and the forestallment of fraud in a commercial association. The experimenter also linked the challenges faced by the adjudicator in precluding fraud and corruption in Nigerian breweries plc. The experimenter sourced the data through Primary and Secondary sources of data Collection. Primary data questionnaires and oral interviews were used to collect information from the repliers. Secondary data journals, and other applicable accoutrements relating to the area of my disquisition will be review. expansive literature review was carried out on the direct literature and circular literature on books, journals and once workshop. The exploration instrument used in this study includes oral interview and questionnaire. The questionnaire is structural as to contain both close and open concluded question. Simple tables and probabilities were used in treatment of data. ki- forecourt was used in testing the suppositions. At the end the experimenter observed that Adjudicators are veritably important in controlling fraud and corruption in Nigerian breweries plc. It was also discovered that fraud and corruption has significant effect on the profitability of a commercial establishment. The study inversely revealed that there’s significant relationship between the duty of the adjudicator and the forestallment of fraud in a commercial association. The study shows that there are so numerous challenges faced by the adjudicator in precluding fraud and corruption in Nigerian breweries plc. Grounded on the findings the study recommends that companies are to increase their conditions pertaining to qualifications and draw up more effective webbing ways. They’re to insure that there’s isolation of duties, effective internal controls, jobs reparations and job enrichment. mindfulness should also be created so as to ‘ nip ’ the situation in the ‘ cub ’ before anything serious occurs. This requires further than just sound judgment and dynamic action; it calls for commitment that can only be gained if the operation has assured that all the motivational impulses have been put in place. A total alertness that takes nothing for granted and mindfulness that trust could be lost, this being a active and meticulous approach.

Chapter One

Preface

Background of the study

That an adjudicator has the responsibility for the forestallment, discovery and reporting of fraud, other illegal acts and crimes is one of the most controversial issues in auditing, and has been one of the most constantly batted areas amongst adjudicators, politicians, media, controllers and the public Gay( 1997). This debate has been especially stressed by the collapse of both small and big pots across the globe. The auditing profession in Nigeria has caught the media’s attention following fiscal dishonors in some of the Nigerian banks similar as Intercontinental Bank, Oceanic Bank, Afribank, and Bank PHB among others. There seems presently to be a misconception that adjudicators ’ duties are largely the precluding, detecting and reporting of fraud, for illustration, Idris( 2009).

Fraud, according to Adeniji( 2004354) and ICAN( 2006206), is an purposeful act by one or further individualities among operation, workers or third parties, which results in a misrepresentation of fiscal statements. Fraud can also be seen as the purposeful misrepresentation, concealment, or elision of the verity for the purpose of deception/ manipulation to the fiscal detriment of an individual or an association which also includes embezzlement, theft or any attempt to steal or unlawfully gain, misuse or harm the asset of the association,( Adeduro, 1998 and, Bostley and Drover 1972). Fraud has increased vastly over the recent times and professionals believe this trend is likely to continue. According to Brink and Witt( 1982), fraud is an ever present trouble to the effective application of coffers and it’ll always be an important concern of operation. ISA 240 ‘ The Auditor’s liabilities to Consider Fraud in an inspection of Financial Statement( Revised) ’ refers to fraud as “ an purposeful act by one or further individualities among operation, those charged with governance, workers or third parties, involving the use of deception to gain an unjust or illegal advantage ”.

Aderibigbe and Dada( 2007) define fraud as a deliberate dishonesty planned and executed with the intent to deprive another person of his property or rights directly or laterally, anyhow of whether the perpetrator benefits from his/ her conduct.

Weirich and Reinstein( 2000 cited in Allyne & Howard 2005), define fraud as “ purposeful deception, cheating and stealing ”. Some common types of fraud include creating fictitious creditors, “ ghosts ” on the payroll, falsifying cash deals, undeclared stock, making unauthorized “ write- offs ”, and claiming inordinate or noway – incurred charges. Pollick( 2006) regards fraud as a “ deliberate misrepresentation, which causes one to suffer damages, generally financial losses ”.

According to Pollick,( 2006) Corruption is a form of dishonest or unethical conduct by a person entrusted with a position of authority, frequently to acquire particular benefit. Corruption may include numerous conditioning including bribery andembezzlement, though it may also involve practices that are legal in numerous countries.( 2) Government, or’ political’, corruption occurs when an office- holder or other governmental hand acts in an sanctioned capacity for particular gain.

The word loose when used as an adjective literally means” hugely broken”. The word was first used by Aristotle and latterly by Cicero who added the terms fix and abandonment of good habits. StephenD. Morris, a professor of politics, writes that( political) corruption is the illegitimate use of public power to profit a private interest.

Economist Ian Senior defines corruption as an action to( a) intimately give( b) a good or a service to a third party( c) so that he or she can impact certain conduct which( d) profit the loose, a third party, or both( e) in which the loose agent has authority. Daniel Kaufmann, from the World Bank extends the conception to include’ legal corruption’ in which power is abused within the confines of the law — as those with power frequently have the capability to make laws for their protection.

Albrecht et al( 1995 cited in Allyne & Howard, 2005287) classified fraud into hand embezzlement, operation fraud, investment swindles, seller fraud, client fraud, and eclectic fraud.

Fraud also involves complicated fiscal deals conducted by white collar culprits, business professionals with technical knowledge and felonious intent( Pollick 2006).

Statement of Problem

The director of companies are empowered to appoint, reappoint, and remove their external adjudicators and they’re also to fix the external adjudicator ‘s freights using the guidelines of the Adjudicator- General as an aid. The problem so created is that the directors are officers of the association, who also have the responsibility of managing the finances, budgeting, spending including awarding of contracts and the medication of fiscal statements. The same people who are thus placed in a position to render stewardship accounts are now given the power to hire and fire ‘ external adjudicators who would review the accounts of their own conditioning. This runs athwart to the ideal principles of public responsibility.

Adjudicators in Nigeria are ladened with the responsibility of examining the fiscal statements of associations for the purpose of catching on their verity and fairness. The auditing profession in Nigeria is regulated by a combination of three nonsupervisory documents. The Companies and kindred Matters Act( CAMA),No. 1 of 1990 serves as the supreme controller; while the Nigerian norms on Auditing( NSAs) and Rules of Professional Conduct released by ICAN and ANAN for the members in practice. The main ideal of these nonsupervisory documents is to give guidelines for the practice of auditing in Nigeria.

Although CAMA provides expansive vittles on the practice of auditing in Nigeria, it fails to specifically address the issue of adjudicator’s independence. still, it contains only guidelines as to the manner at which the adjudicators should be appointed, how they should serve and to whom they should report to. The other two nonsupervisory documents also don’t capture explicitly what adjudicator’s independence means but rather bear adjudicators to be independent and be seen acting as similar. still, they give detailed list of issues that surrounds the adjudicator’s independence.

The main thrust of ethical norms in auditing is to insure and uphold the adjudicator’s independence( Jackling et al, 2007; Dearman and Beard, 2005). Independence has come an emotive word, a banner standing for freedom, integrity and all that’s good. According to Aderibigbe( 2005), the word independence has two distinct meanings. originally, it falls within a family of words inferring an absence of relationship like unconnected, disconnected, insulated, remote and sectarian. maybe this is the reason why, in the olden days, adjudicators were frequently needed to hold shares in their customer companies so as not to be too independent. Secondly, independence falls within a family of words inferring freedom from the exercise of powers; for illustration, free, unchecked, emancipated and free from dominance or influence, the independence of adjudicators in Nigeria has been constantly advised. The way at which Nigerian adjudicators secure their inspection assignments and the rate at which they lobby for auditing job put their independence in jeopardy. Indeed though honored professional account bodies in Nigeria, like ICAN and ANAN, are trying veritably hard to insure stylish practice in the auditing profession via the enforcement of professional law of conduct for their members, the strict observance of similar canons is still questionable.

The development thus appears to put the adjudicator ‘s investigative and reporting independence in jeopardy and this may master the purpose of public inspection and erode the independence and hence, the neutrality of report of the adjudicators.

Ideal Of The Study

The end of this exploration work is to examine the part of adjudicators in mollifying fraud and corruption in Nigeria with particular reference to Nigerian Breweries Plc 9thmile corner Enugu. The specific objects of this exploration work includes the following;

1. To examine the significance of adjudicators in controlling fraud and corruption in Nigerian breweriesplc.

2. To estimate the effect of fraud and corruption on the profitability of a commercial establishment.

3. To ascertain the extent at relationship between the duty of the adjudicator and the forestallment of fraud in a commercial association.

4. To identify the challenges faced by the adjudicator in precluding fraud and corruption in Nigerian breweries plc. And also proffer possible results to the problems linked.

Exploration Questions

Grounded on the objects above the experimenter developed the following questions;

1. What are the significance of adjudicators in controlling fraud and corruption in Nigerian breweries plc?

2. To what extent does fraud and corruption affect the profitability of a commercial establishment?

3. What are relationship between the duty of the adjudicator and the forestallment of fraud in a commercial association?

4. What are the challenges faced by the adjudicator in precluding fraud and corruption in Nigerian breweries plc. And also proffer possible results to the problems linked?