THE IMPACT OF REGULAR AUDIT TO THE VIABILITY AND ORGANIZATION EFFECTIVENESS OF COMMERCIAL BANKS IN NIGERIA A STUDY OF SELECTED BANKS

CHAPTER ONE:

1.0 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

High performing organization brings Joy to its shareholders stakeholders and directors. Falling organization brings heartache, hypertension and death to all those associated with it.

 In any case there should be deaths and survivors in an endeavor be it a game, business or war.

Osuagwu et al(1995) have aptly noted that the desire of man will always remain to win, to perform and be praised be among survivors and rejoice with the living The world is full of intrigues, political activity, competition, and stress and turbulent. The business community is not an exception that art of testing and checking of an organization accounting and financial records to see whether otherwise known as “Auditing is a corn age from a Latin word Audire” which means to hear.

It is an offshoot accounting, which was believed to have originated in the Italian cities far back in the 13th and 14th centuries credit for earlier words is not complete without mentioning such notable person as Luca Pacioli a Franciscan mathematician Auditing from its beginning had an undertone of internal control Woolf(1982) defined internal control system as the whole system of controls financial and wise established by a management in orderly to carry on the business of the enterprise in an orderly and efficient manner ensure adherence to management policies, safeguard assets and secure as far as possible completeness and accuracy of the record.

According to Davidson etal(1986:61) the goals of any firm are the targets or end result towards which the energies of the firm are the means for achieving those goals. The details in which goals and strategies are stated vary among firms some firms prefer to state goals and strategies in general term only for instance a firm might express its goals as be more profitable than our competitions. Its strategy might be to mechanize produce as a cost lower than its competitors.

Therefore, all levels of management requires information on which to base it decision to organize, to plan and to control while timing is important other factor such as competence accuracy and relevance are equally important in assessing the value of information to the organization.

Johnson(1957) has stated clearly that the quality of management information is directly related to its timing, but this is linked to the particular situation give rise to the need for such information.

1.2 STATEMENT OF THE PROBLEM

Auditors role in both the private and public emphasized the main duty of an auditor is to report to the members or shareholder on the accounts examined by him and on every balance sheet and every profit and loss account and all group account laid before the company in a general meeting during his tensure of office the auditors must report positively that is in his opinion.

The accounts give true and fair view of the company’s account and of its profit and loss accounts.

Complying with requirements of the company’sAllied matters Decree, 1990.If the auditor is not satisfied on the above points. It is the duty to qualify his reports.

Most directors found quit of fraud embezzlement and misappropriation of funds, despite the fact that the audit reports vividly have shown that the accounting records have been fairly kept and therefore display a true and fair view if the operations for the period under review. The most sticking problem now become how can an investor assured himself that his investment well even yield positive results in the face of this malady and the profit figures that have magnetized him to the business are not fabricated or falsified and misleading.

On the other hand, all auditors involve risk, auditors therefore means the chance of damage to auditors or their firms as a result of giving audit opinion that are wrong. Damage may be in form of monetary damage paid to client or third parties as compensation for loss caused by the conduct (for instance negligence) of auditors or simply loss of reputation with clients or the business community.