Audit Committee Annual Evaluation of the External Auditor
AUDITOR’S INDEPENDENCE AND ACCOUNTABILITY IN NIGERIA PUBLIC ENTERPRISE
This study seeks to identify the determinants of auditors’ independence in public enterprises and determine the policy implications of lack of auditors’ independence in the public sector. The data for the research was primary and collected via questionnaire from the Nigerian Ports Authority Headquarters Lagos. The questionnaire responses were analyzed using the percentage method. The hypothesis was tested using the chi-square method. The study revealed that there is need for the audit of public enterprises in Nigeria; there is objectivity in the appointment of the external auditor for the audit of public enterprises in Nigeria; and that the independence of the auditor has a significant impact on the accountability disposition of Nigerian public enterprises. It was also found that provision of other services by the auditor as well as non-rotation of auditors are some of the strong factors, which may negatively impact on the auditor’s independence and objectivity. It was recommended that the remuneration of the auditor should be determined by office of the Auditor-General for the Federation rather than by the Head of the Public enterprise being audited. In addition, more powers (statutory backing) should be given to the external auditor in order to free him from influence or intimidation by the client while the auditor should avoid other non-audit services and being in the audit of the client for longer than three years.
The independence of auditors is regarded as key to their credibility as external verifiers of external financial statements. The requirement for external auditors to be independent of their clients when undertaking an audit according to the International Federation of Accountant 's (IFAC) Code of Ethics and in the European Union 's Eighth Directive. In the IFAC code, this requirement is translated into various situations where observance of
This study seeks to identify the determinants of auditors’ independence in public enterprises and determine the policy implications of lack of auditors’ independence in the public sector. The data for the research was primary and collected via questionnaire from the Nigerian Ports Authority Headquarters Lagos. The questionnaire responses were analyzed using the percentage method. The hypothesis was tested using the chi-square method. The study revealed that there is need for the audit of public enterprises in Nigeria; there is objectivity in the appointment of the external auditor for the audit of public enterprises in Nigeria; and that the independence of the auditor has a significant impact on the accountability disposition of Nigerian public enterprises. It was also found that provision of other services by the auditor as well as non-rotation of auditors are some of the strong factors, which may negatively impact on the auditor’s independence and objectivity. It was recommended that the remuneration of the auditor should be determined by office of the Auditor-General for the Federation rather than by the Head of the Public enterprise being audited. In addition, more powers (statutory backing) should be given to the external auditor in order to free him from influence or intimidation by the client while the auditor should avoid other non-audit services and being in the audit of the client for longer than three years.
The independence of auditors is regarded as key to their credibility as external verifiers of external financial statements. The requirement for external auditors to be independent of their clients when undertaking an audit according to the International Federation of Accountant 's (IFAC) Code of Ethics and in the European Union 's Eighth Directive. In the IFAC code, this requirement is translated into various situations where observance of