Audit Conflict: Its Impact on Auditors Ability to Resist Management Pressure

Audit Conflict: Its Impact on Auditors Ability to Resist Management Pressure

(A Case Study of First Bank and Diamond Bank)

ABSTRACT

The project deals with audit conflict its impact on auditors’ ability to resist management pressure. This study examines the effect of ethical reasoning and formal sanction on the behaviour of auditors with beautiful attributes. The researcher used two sources of data collection, primary and secondary data. Method of investigating, the researcher made use of various research instruments in gathering information for the research. One of the methods and instruments used for data collection is the questionnaire, oral interview with directly observing the workers ascertain their performance. First, we find a significant positive association between Machiavellianism and unethical auditor’s behaviour. In addition, we find that auditors’ unethical behaviour is significantly reduced by higher ethical reasoning abilities and increase the threat of sanctions.

TABLE OF CONTENT

Title page.      .      .      .      .      .      .      .      .      .         i

Certification    .      .      .      .      .      .      .      .      .         ii

Approval page.      .      .      .      .      .      .      .      .         iii

Dedication      .      .      .      .      .      .      .      .      .         iv

Acknowledgement .      .      .      .      .      .      .      .         v

Abstract  .      .      .      .      .      .      .      .      .      .         viii

Table of contents    .      .      .      .      .      .      .      .         ix

CHAPTER ONE: Introduction 

1.1      Background of the study       .      .      .      .      .      .         1

1.2      Statement of problem    .      .      .      .      .      .         3

1.3      0bjective of the study    .      .      .      .      .      .         5

1.4      Research question  .      .      .      .      .      .      .         6

1.5      Research hypotheses     .      .      .      .      .      .         6

1.6      Significance of study      .      .      .      .      .      .         7

1.7      Scope are and limitation of study .      .      .      .         8

1.8      Definition of terms..      .      .      .      .      .      .         9

References .    .      .      .      .      .      .      .      .         12

CHAPTER TWO

Literature Review

2.1  concept of the study      .      .      .      .      .      .         11

2.2  Who is an Auditor   .      .      .      .      .      .      .         14

2.3  Conflict overview    .      .      .      .      .      .      .         21

2.3.1  Auditors behaviour and management pressure.         23

2.3.2        Auditors ways of addressing management pressure in terms of conflict management  .      .      .      .         24

2.4         Audit conflicts, its impact on the auditor’s ability to resist  management pressure  .      .      .      .      .      .         27

2.4.1        The role of auditors    .      .      .      .      .      .         30

2.4.2        Auditors or audit report     .      .      .      .      .         32

2.5         Rights of the auditors in resisting management pressure.33

Reference.      .      .      .      .      .      .      .      .         36

CHAPTER THREE

Research Design and Methodology

3.1      Research design     .      .      .      .      .      .      .         37

3.2      Sources of data      .      .      .      .      .      .      .         37

3.3      Population and sampling determination.       .      .      .        39

3.4      Methods of investigation.      .      .      .      .      .         40

3.5      Method of analysis  .      .      .      .      .      .      .         41

CHAPTER FOUR

PRESENTATION AND ANALYSIS OF DATA

4.1      Analysis of data      .      .      .      .      .      .      .         44

4.2      Test of hypothesis .      .      .      .      .      .      .         53

CHAPTER FIVE

Finding Conclusion and Recommendation

5.1      Summary of finding       .      .      .      .      .      .         62

5.2      Conclusion .    .      .      .      .      .      .      .      .         63

5.3      Recommendation    .      .      .      .      .      .      .         64

Bibliography    .      .      .      .      .      .      .      .         66

Appendix I      .      .      .      .      .      .      .      .        67

Appendix II     .      .      .      .      .      .      .      .         68

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The impact of auditing in any organization is of vital importance that their growth and retardation depend on it. According to Nwabueze (200:2), an audit is an independent examination of and expression of opinion of the financial statement of an enterprise by an appointed auditor in pursuance of the appointments and compliance with any relevant law and regulation. An audit is an independent examination by an auditor of the evidence from which the final revenue account and balance sheet of an enterprise have been prepared to ascertain that they present a true and fair view of the summarized transaction of the period under reviewed and the financial state of the organization at the year and this enabling the auditor to report thereon. It is an investigation into books of accounts and the documents and vouchers from which the books have been written up with the object of enabling the auditor to make a report on the balance sheet or other statement prepared from books to the person or persons to whom he has been appointed to report.

Nwabueze (200:3) further stated that an audit is an independent examination, of an organization’s financial records at a given time to ascertain the true position of the final accounts of the institution or organization. It is imperative to state that auditing is never with hunting as some establishments tend to book at it.

This study tends to look into audit conflicts its impact on auditors ability to resist management pressure. Lugli point on this study will be guard a long time management conflict in an enterprise, organization and institution as a result of unbalanced accounting records and other forms of management issues boarding on the firm, for example, unretired payments, incomplete records, overpricing of products usage of organizations property without proper or adequate permission, over vouching and deliberate fraud or embezzlement of funds.

At a place where auditing is appropriate and timely, such conflicts are reduced if not nipped out the bud. The relevance of auditing as it is daily guarding momentum is overemphasized. Any company organization or agency that requires growth result allow periodic auditing into its final records. Such periodic exercise will enhance efficiency reliability and dependent records with a strong financial base.

According to Onovo (2001) if the auditor is to fulfil the primary objective of an audit of a financial statement which is to express an opinion on such financial statement a financial statement must be prepared within a frame of reorganized accounting principles.

The above is referring to the primary objective of auditing that borders on efficiency timely execution of audit responsibility cost-effectiveness and risk reduction and elimination timely execution of audit is very necessary for any audit inspection and equerry according to Nwabueze (2000:14) the primary objective of an audit is the critical examination of and verification of the accuracy and the truth of a statement usually a financial one by a skilled and impartial observe (the auditor.)

From the going therefore the priory objective of auditing will be defeated if timely execution and efficiency of it conducts about the above (Millichapamp (1990:24).

In the same vein, the inspection or auditing of an organization records will include the following, an examination, of the bookkeeping accounting and internal control system to ascertain whether they are appropriate for their purpose and whether they are effectively applied to some other auditing functions, include verification of own existence and value of assets and the number of liabilities shows in the balance sheet (Aguolo 19983)

1.2 STATEMENT OF THE PROBLEM

The researcher is fully prepared to carry out the project titled “audit conflict: impact on auditor’s ability to resist management pressure” but is faced with a Myriad of management problems. Those banks couldn’t release their record for inspection to external persons for project purposes. Again the management of the bank sees the incidents projects as exposing their records more especially now that the EFCC (economic-financial crimes commission) are after them.

Most of the staff of the bank that is prepared to cooperate were afraid of losing their jobs on account of the assistance they are to give. Meanwhile, the study is vital in the sense that audit conflicts as their impacts on management are an important tool to be resolved in the effectiveness on the efficiency of day to day operations of an organization, eg the selected banks in particular.