The Observance Of Professional Ethics By Auditors In Nigeria

The Observance Of Professional Ethics By Auditors In Nigeria 

Chapter One

Preface

Background Of The Study

In the awake of fiscal heads in late 1990s, the transnational community emphasized the major part that the observance of transnational norms and canons of stylish practices can play by strengthen public and transnational fiscal systems. The transnational community called for the medication of reports in the observance of standard and canons( ROSC) an assessment of the degree to which an profitable observes internationally honored norms and canons.

Auditing, as a professional body of adjudicators, has its own ethics, which specify the respectable law of conduct, geste or action anticipated of the members in their relations and dealings with one and another and with other members of the society in which they operate.

In recent times there have been a libelous failures of commercial titans and professional bodies which easily shows the absence of integrity, ideal and independence in the inspection profession which has lead to lost confidence in the minds of the public by the true adjudicators serve.

These failures have redounded to scrutiny of work of an adjudicator and the ethical issues raised concerning the work of an adjudicator both within and outside the profession. Following the collapse of theU.S giant company through unethical account practices. In the case of Enron in the United States, a top account establishment. Andersen consulting was criminated for having contributed to the collapse of the giant company. The adjudicator’s themselves came subjects of inspection and there were wide allegations of conflict of interest. It acquired world wide applicability in an tract entitled “ Enron’s collapse and account profession ”. The Nigeria Tribune in its edition of February 8, 2002 and also, in the early part of 2003, the Auditor General of the Federation, Vincent Azie had released an inspection report in which he criminated colorful departments of state for snide fiscal practices. The report refocused to leakage, wide spread corruption and failure of account officers in reporting finacial conditioning. Also, in Nigeria, the African Petroleum, Union Dicon Salt and Nicon Insurance case in 2002, the Institute of Chartered Accountants of Nigeria( ICAN) had a case to query two adjudicators in respect of work done for these three companies videlicet African Petroleum( AP) Union Dicon trade and Nicon Insurance. The privatization of the AP had generated so important public uproar when it was discovered that the company owed a debt of N26 billion which the external adjudicators had failed to expose. The adjudicators had still sought to shift the blame to the directors of the affected company professing that they failed to make necessary data available to the adjudicators.

It’s worth noting for times, accountants have been routinely held responsible for the torture in the banking and manufacturing sectors. Despite favourable reports by adjudicators, companies still go down, raising ethical questions about the work of accountants. The wide downturn of fortunes within the Nigeria frugality has brought the adjudicators under a different hunt light. still, ICAN’s response with commination of unethical practices has been to define the integrity of its members, it has had cause to argue that over 90 percent of the causes performing in torture were outside the horizon of the adjudicators. The challenge is for ICAN to strengthen its nonsupervisory and correctional functions, and insure acceptable commitments to transnational account norms.

Adjudicators as professional men and women whose calling demand placing public interest above particular interest can only be achieved when adjudicators cleave rigorously to the introductory abecedarian and ethical norms that regulates their relationship with the public as well as the company being reported. This will enhance public confidence in the reports given by adjudicators. The regulating bodies in an attempt to guarantee this, has made compliance with ethical standard mandatory and had also designed complaints and correctional process to deal with any errant member who violates the member canons of conduct.

All honored professions have developed canons of professional ethics. The abecedarian purpose of similar canons is to give members with guidelines for maintaining a professional station and conducting themselves is a manner which will enhance the profession elevation of their discipline.

Professional ethics as a public account as in other profession has developed gradationally over the times and still in a process of change as the practice of auditing itself changes. To be effective, a body of professional ethics must be attainable and enforceable. It must correspond not simply of abstract ideals but of attainable pretensions and practical working rules which can be executed.

Exploration Questions

This study is designed to find results to the following questions

1. Are the canons of conduct for professional adjudicators effective?

2. How effective is the enforcement medium of the canons of conduct by the nonsupervisory bodies?

3. Do pressure and overdue influence undermine ethical moral value of adjudicators and their independence?

4. Are the inspection practice in Nigeria regulated by laid down ethic rules?

Objects Of Study

The objects of this study is to help us

1. To know the effectiveness of the canons of conduct for professional adjudicators.

2. To know the effectiveness of the enforcement medium by the regulating bodies.

3. To know whether pressure and overdue influence undermine ethical moral value of adjudicators and their independence.

4. To know whether inspection practices in Nigeria is regulated by laid down ethical rules.

Compass Of The Study

The study will cover five different druggies of audited fiscal report and five adjudicators regulating bodies. These include;

1. Government

2. Public

3. Investors

4. Shareholders

5. operation

6. Institution of Chartered Accountants of Nigeria( ICAN)

7. Securities and Exchange Commission( SEC)

8. Central Bank of Nigeria( CBN)

9. Nigeria Accounting norms Board( NASB)

10. National Pension Commission( NPC)

It’s important to note that our exploration content is reflective of our compass, because of the broadness of the conception of professional ethics, so our study would be limited to the observance of professional ethics by adjudicators in Nigeria only some questionnaires will be administered to the below druggies of checked finacial reports and the regulating bodies. The question naira will be administered on the base of the following hypotheticals

a) That druggies of audited fiscal reports and the regulations are apprehensive of the actuality of the professional ethics the adjudicators are anticipated to misbehave with.

b) That the druggies of audited fiscal reports and the controllers are apprehensive of the goods of compliance andnon-compliance to the being professional ethics.

Significance Of The Study

This study is carried out to know whether adjudicators actually observe and misbehave with canons of professional ethics and also the position of compliance. It’s anticipated that the results and recommendations from this study will help adjudicators know the substance of professional ethics overbalance. help controllers in the profession to strengthen their compliance and enforcement mechanisms, nonsupervisory bodies. help in maintaining and administering nonstop professional education of professional ethics among members by the professional bodies.

This study will also be useful for farther exploration.

Study Constraints

A content of this nature being related to inspection and ethics entails a lot of work so there was time constraint and also material and fiscal constraint. Some other constraints include

1. Delay response by the applicable authorities.

2. Non exposure of real law of conduct being use by some operation of enterprise.

3. Deficient data as kept by some associations.

4. terrain content wasn’t wide due to transportation cost.

The Exploration Thesis

There will be need for the collection of data and statistical test in this because all the information demanded won’t be available from secondary source, hence the need for statement of thesis.

In this exploration design, four suppositions are to be tested;

H0 – Is the null thesis

H1 – Is the indispensable thesis

Thesis 1

H0 – The law of conduct for professional adjudicators aren’t effective.

H1 – The canons of conduct for professional adjudicators are effective.

Thesis 2

H0 – The enforcement medium of canons of conduct by inspection nonsupervisory bodies aren’t effective.

H1 – The enforcement medium of canons of conduct by the inspection nonsupervisory bodies is effective.

Thesis 3

H0 – Pressure and overdue influence doesn’t undermine ethical moral value of adjudicators and their independence.

H1 – Pressure and overdue influence undermine the ethical moral values of adjudicators and their independence.

Thesis 4

H0 – inspection practice in Nigeria isn’t regulated by laid down ethical rules.

H1 – inspection practice in Nigeria is regulated by laid down ethical rules.

Description Of Terms

In this section, some terms were technically used, so below is the description of the terms in order to have a clear meaning or interpretation of the terms.

Inspection

An inspection is an independence examination of, and expression of an opinion on the fiscal statement of an enterprise so as to give a true and fair view of the fiscal statement for the fiscal period.

Adjudicator

Is the independent monitor who carries out an inspection exertion.

Ethics

A set of rules and norms which governs the conduct of members of a profession.

Profession

A calling that requires special training or skill or a body of persons engaged in a calling.

Integrity

The quality of being honest and having strong moral principles, maximum sincerity, avoidance of deception.

Questionnaire

A means in which questions are answered by the repliers and which the replier is anticipated to complete.

Canons Of Conduct

Guidelines or a set of norms that members of a particular profession agree to follow in their work.

Adjudicator Report

A written document of an adjudicator findings together with the adjudicator professional opinion regarding the true and fairness of fiscal statement.

Effectiveness

The extent to which neutrality is achieved and the relationship between the intended impact and the factual impact of an exertion.

11. Capital Structure And Request Value Of Companies

12. Credit Management And Bank Lending.

Chapter One

Preface

fiscal analysis is a procedure for preparing and reporting dependable information concerning sale.

fiscal resource in any frugality should be adequately mustered, taking into consideration the pivotal part of finance in the profitable development.

Nwankwo( 1993p.2) stated that finance resourced have been considered a veritably important factor in the frugality development. Accordingly, the rallying of resource has been defining a criteria in the achievement of rapid-fire econ0mic growth in any frugality. The first step for coffers rallying for the development purpose if the rallying of fiscal coffers, which will lead to the capital conformation. Capital conformation needed the release for domestic goods and service for real investment or the import of coffers form outdoors or both.

Ojo and Adewumi( 1989P.10). They emphasized the part of fiscal coffers and pointing out that the fastidious institution offers an effective institutional medium through which resource can be mustered and directed to lower essential use for further productive druthers . The pen contention then’s that the effectiveness of any fiscal system particularly in a developing frugality like Nigeria depends on the extent of which the fiscal information part is effectively and efficiently discharge with reference to the profitable good of the country and the ideal of the institution itself.

According to Racheal 91984p.478), the primary function of the marketable bank is the extension of credit to good borrowers. it has been noted that marketable bank is the most important institution n the rallying of finances.

That further further Khat Khate and Racheal( 1984p.516), while making the significance of resource rallying stated that marketable bank are the most applicable institution in the developing countries to encourage and rally savings and also to casket similar saving into a productive investment. First because of their network of office, second because marketable bank through normal credit operation frequently spark savings which are lying idle away and third because the bank are largely liquid and therefore attract saviors .

Oji( 1984 P9), projected at Nigerian case editorialized that, the marketable banking system be used as a representative since it constitute the largest single element of about 85 of all the institutional savings in the system. Mayor( 1982P 13) further stressed that there are two main reasons why the marketable banking system is the most important fiscal conciliator.

originally the total quantum of deposit in the marketable banking system has the capacity to produce deposit demand performing from advancing conditioning.

Since demand deposit constitutes a large sum of the plutocrat supplied, the banking system is suitable to expand the nation force of plutocrat. The concurrence that marketable bank need liquid asset especially the short term asset that an be converted into cash loan accordant to him constitute the largest quantum of asset.

Good bank lending insure high profit position, insure lesser return and have underscore of meeting the social responsibility to he benefit of the society while in the other way bank lending can affect the bank negatively in colorful way for case, it might take a great chance of their periodic profit which the bank need to stay in business with. This and the magpie extension of loan although within the credit guidelines without proper supervision of similar loan and account have led to an adding tend in the actuality of baddept.

The bank has failed in the perpetration of colorful checks against bad debt and has tended to forget every loan committed the moment the contract has been concluded. The author contention then’s that the cause of bad debt is due to indecorous supervision and operation of loan granted. therefore study is been carried with the Ecobank plc as the case of study

The Brief Review Of The Bank

Ecobank plc was incorporated on the 29th of October 1990 and was granted license to operate as a marketable bank on the second of January 1991. The bank opened for business on the 2nd of April 1991 with and authorized and completely paid up capital of# 50 million( fifty million). The equity grounded was ultimate increased to# 100 million and by March 1995 it has reached 200 Million Naira. It has as its headquarter and listed office at Plot BC, Okigwe Road, Ugwu Orji Owerri, Imo state Nigerian. presently the bank has fanned in the country and pressman bank in London, Norway and United state of America

Statement Of Problem

The marketable banking system shares veritably important characteristics with other members of the fiscal sector and the rest of the business community. It asked to maximize profit. Clem( 1994P.4), marketable bank are profit seeking enterprise as similar it partake with other business the same set of anticipation concerning the health of the frugality. it’s on this light that it made loan available to borrowers on interest which is a source of profit to the bank. Near, the growth the credit sector is the adding high prevalence of bad debt due amongst others, to poor operation. Ecobank plc like utmost marketable bank ahs recorded high prevalence of bad debt and have one on the time declared losses. For case in 1994, he bank sustained a net loss of 112, 153 Million, performing from the fact that the bank net portfolio is( generally not performing( president periodic report 1996P.28)

In 1995, the bank made a profit of# 87, 879,000, after the quantum of# 1, 836,645 has been subtracted as the provision for the bad debt. Added to130.481, 720 revised provision in 1994 at the case for the central bank of Nigerian and those for the proceeding times the bank provision for the bad debt rose to a sta