CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
It is obvious that enormous resources of money and material
are being utilized by corporate organizations.
In recent years the numbers and monetary
values of public sector activities have
increased substantially. This increase in activities have brought within an added demand for accountability.
Auditing is one of the elements of accountability. Shareholders
and government are responsible for
ensuring that appropriate audit are made
and reports therefore acted upon. Financial auditing contributes to public account ability since
it provide independent report or whether
the financial information represent a true and fair view of the organization‟s financial stand,
the internal controls and the
compliances with laws and regulation.
As an external auditor, his auditing exercise embrace the examination of the financial report of the
organization in order to see whether the
account have been prepared in accordance or in
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compliance with general accepted accounting principle (GAAP)
and applicable laws, ethics and
regulations and in the process errors or
fraud maybe detected (mill-champ 1990). Since huge monetary resources are utilized by the financial
institutions of public organization,
errors which tend to lead fraud may exist and is not disclose in the report may contain errors or
mistakes that cause it to be
deliberately misleading or the report may fail to disclose relevant information. All these maybe
revealed through an audit work done by
the external auditor since he is independent of
management.
The responsibly of external auditors for ensuring high
ethical standard with an organization as
a lesser one than internal auditors, for
the year only occasional visitors to the company and can only look at a fraction of numbers of
transactions that internal auditor will
not normally be directly involved in the establishment of the policies within an organization which
would include policies of an ethnic
nature.
Therefore, their ability to shape the ethnical nature of an organization is critically affected by the
attitude of the management. If the
management are prepared to establish procedures
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demanding the highest ethnical standard from employees, and demonstrates that themselves to these
standard, then the ability of external
audit to help enforce ethnical standards is greatly enhanced. Based on these factors, it interest
the researcher to know the place of
external auditors on the examination of the financial statement.
1.2 STATEMENT OF THE PROBLEM
The goal of every business is to make profit and profit is to
be made when total revenue exceeds total
operating cost and losses when the
reverse is the case.
In view of the above, it is therefore necessary for firms to
strive to manage their affairs
effectively and efficiently in order to make
profit achieve their objective; they do by setting various auditing systems to check mate these.
To reduce cost and at the same time impose quality service (product) and as well received in acceptance
of the costumer, effective and
efficiency control of asset inventory cash human resources as well as reduce the liabilities,
financial abnormalities,
misappropriation and embezzlement of money, and adequate external audit measures has been established
in the bank to aid
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the management in curbing the above mentioned variables. Despite the existence of internal audit
system the bank still experience some
financial anomalies which prompt this research
work to study the significance of external auditors on examination of financial statement in the bank.