Abstract
This research work investigates investment decision as an analysis of the impact of qualified audit report using evidence from Nigeria. The problem associated with investment decision with recourse to the impact of qualified audit report can not be over emphasized. The broad objective of the study is to find out whether qualified audit report have a significant effect on share price of listed companies in the Nigeria Stock Exchange (NSE). The auditing process is completed with the drafting of the auditors opinion through an audit report prepared and signed by the auditor. The primary source of data collection was used and the survey method was used to gathered data from the respondents through the administration of questionnaire using a sample size of 30 for effective study. The findings revealed that it was discovered that it is the basic duty of the auditors to verify whether the company financial statement shows a true and fair view of the position of the company. The study recommends amongst others that the duties of the directors as regard the preparation of financial statement should be spelt out and any other relevant matter relating to the director in the engagement letter so as to enable both the directors and the auditor to be aware of their respective duties.
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Acompany financial statements present managers, investors, creditors and general user with the company’s financial status. It should therefore be ensure that data shown in financial statement are actual and provide all necessary information. As such corporate financial statement is subjected to audit by external and independent auditors.
Audit report is a media of communication between auditor and financial statement users; it show the most important part of auditors activity and expenses the result of financial statement assessment to users (Salehi & Abedini, 2008).
The auditing process is completed with the drafting of the auditors opinion through an audit report prepared and signed by the auditor. In this report, auditors describe the finding of the audit and express their view on the true and fair condition of the company’s financial status through its published financial statement yet, the importance attributed by investors to those report and their contents is rather questionable and require further examination.
A considerable reason for demanding auditing is expected effects on decision making and demanding for audit services is generated by many causes including the expecting gap between the financial statement user and preparer’s (Salehi, 2007; Salehi & Azary, 2008); the conflict of interest between kinds of financial statements users (Salehi, 2007); the complicated economic environment and effect of the financial on decision making.
The importance of audit reports is significant and the weight placed on the informational content is substantial. Many researchers examined audit report as part of their field of research both at a theoretical and empirical level. Studies have been performed not only in Africa and Europe but also in US, Australia and within the continuously growing auditing market of China. However result includes certain contradiction. This aim of this research is to examine the impact of audit reports that have been issued and published for companies, on the share prices, fluctuation at the Nigeria Stock Exchange (NSE) during the period under review.