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Research Journal of Finance and Accounting
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol 3, No 5, 2012
www.iiste.org
Challenges of Auditors and Audit Reporting in a Corrupt
Environment
Prince Kennedy Modugu* Nosa Ohonba and Professor Famous Izedonmi
Department of Accounting, Faculty of Management Sciences, University of Benin, PMB 1154, Benin City,
Nigeria
*
Email of corresponding author: princekenny2010@yahoo.com
ABSTRACT
The rising spate of corruption in both private and public establishments has assumed an enormous dimension.
This development has eroded public trust in financial statements. Auditors in their duty to expressing professional opinion on the truth and fairness of financials are ostensibly bedeviled with quantum of challenges which could result in the issuance of a clean bill of health to corruption-riddled establishments. It is against this background that this paper critically examines the challenges corruption poses to auditors and audit reporting, and proffers formidable cures to ameliorate the achilles heels and to redeem the auditing profession from impeding collapse.
Keywords: auditors, corruption, audit reporting
1. INTRODUCTION
Historically, auditing was confined principally to public accounts. This is a clear indication that from an early date, it was customary for an audit of the accounts of manors and estates to be performed. The person whose duty it was to make such an examination of accounts became known as the auditor, the word being derived from the Latin ‘audire’, meaning “to hear”. Originally, the accounting parties were required to appear before the auditor who had their accounts. The audit of business accounts did not become common until the nineteenth century. The enormous increase in trade in that period, which was fostered by the discovery of steam power and by mechanical inventions, generally led to the formation of numerous joint stock companies, and other corporate undertakings, involving
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol 3, No 5, 2012
www.iiste.org
Challenges of Auditors and Audit Reporting in a Corrupt
Environment
Prince Kennedy Modugu* Nosa Ohonba and Professor Famous Izedonmi
Department of Accounting, Faculty of Management Sciences, University of Benin, PMB 1154, Benin City,
Nigeria
*
Email of corresponding author: princekenny2010@yahoo.com
ABSTRACT
The rising spate of corruption in both private and public establishments has assumed an enormous dimension.
This development has eroded public trust in financial statements. Auditors in their duty to expressing professional opinion on the truth and fairness of financials are ostensibly bedeviled with quantum of challenges which could result in the issuance of a clean bill of health to corruption-riddled establishments. It is against this background that this paper critically examines the challenges corruption poses to auditors and audit reporting, and proffers formidable cures to ameliorate the achilles heels and to redeem the auditing profession from impeding collapse.
Keywords: auditors, corruption, audit reporting
1. INTRODUCTION
Historically, auditing was confined principally to public accounts. This is a clear indication that from an early date, it was customary for an audit of the accounts of manors and estates to be performed. The person whose duty it was to make such an examination of accounts became known as the auditor, the word being derived from the Latin ‘audire’, meaning “to hear”. Originally, the accounting parties were required to appear before the auditor who had their accounts. The audit of business accounts did not become common until the nineteenth century. The enormous increase in trade in that period, which was fostered by the discovery of steam power and by mechanical inventions, generally led to the formation of numerous joint stock companies, and other corporate undertakings, involving
References: Abadi, D. A. T (2005). Internal Auditing in Nigeria: Nigeria; First Edition: Sylbek International. Howard, L. R (1982). Principles of Auditing. 21st Edition: Macdonald and Evans Limited. Millichamp, A. H (1990). Auditing: An Instructional Manual for Accounting Student: London; 5th Edition DP Publication Limited. Walter, W.B (1969). Spicer and Pegler’s: Practical Auditing: 15th Edition; London; HFL Publishers Limited. Accounting Standards Board. (1988). "The Auditor 's Responsibility to Detect and Report Errors and Irregularities." Akpomi, M. E. and Amesi, J. (2009). Behavioural constraints on practices of auditing in Nigeria. Educational Research and Review Vol Khan, M.A. (2006). Role of Audit in Fighting Corruption. Paper Prepared for Ad Hoc Group Meeting On “Ethics, Integrity, and Accountability in the Public Sector: Re-building Public Trust in Government