TABLE OF CONTENT
Title Page………………………………………………………………………………………………………………………. i
Certification…………………………………………………………………………………………………………………… ii
Dedication…………………………………………………………………………………………………………………….. iii
Acknowledgement…………………………………………………………………………………………………………. iv
Abstract………………………………………………………………………………………………………………………. viii
CHAPTER ONE: INTRODUCTION
- Introduction…………………………………………………………………………………………. 1
- Statement of Research Problem………………………………………………………………. 2
- Objectives of Study………………………………………………………………………………. 2
- Research Hypothesis……………………………………………………………………………… 3
- Scope of study………………………………………………………………………………………. 4
- Significance of the Study……………………………………………………………………….. 4
- Limitations of the study…………………………………………………………………………… 5
REFERENCES………………………………………………………………………………………… 6
CHAPTER TWO: LITERATURE REVIEW
- Historical Background…………………………………………………………………………… 7
- Qualifications of Audit Committee Members……………………………………………. 12
- Forms and Contents of Financial Statements…………………………………………….. 26
REFERENCES…………………………………………………………………………………………. 28
CHAPTER THREE: RESEACRH METHODOLOGY
- Introduction………………………………………………………………………………………….. 30
- Population of Study………………………………………………………………………………. 30
REFERENCES………………………………………………………………………………………… 33
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION.
REFERENCES……………………………………………………………………………………….. 54
CHAPTER FIVE: FINDINGS, RECOMMENDATIONS AND CONCLUSION
BIBLIOGRAPHY…………………………………………………………………………………………….. 59
ABSTRACT
Out of the worries ignited by the incessant occurrence of organizations failure and liquidation in Nigeria, even with the presence of audit committees in these organizations, this project topic was born. A topic aimed at evaluating audit committee and financial reporting Nigeria. In carrying out this investigation, the likert-scale questionnaire was drawn to extract correct and direct data from respondents in some randomly selected firms. Data extracted were presented, analyzed and interpreted. Hypothesis were tested using chi-square with five percent (5%) level of significance, indicating ninety five percent (95%) assurance or confidence on the accuracy reliability and validity of the data collected and information gathered therefrom. After rigorous research and study, it was revealed that audit committees have contributed immensely to the financial reporting in Nigeria, though at some point they just exist without making any considerable impact in the financial reporting system in the firm they are established. It was recommended that it is not enough for companies to establish audit committees because the law, CAMD 1990, says so but that the company and its board of directors must show full commitment to accountability by providing a conducive environment in which their audit committees can discharge their responsibilities effectively and efficiently.
- INTRODUCTION
CHAPTER ONE
One mechanism that has been widely used in worldwide organizations to monitor the financial reporting process is the establishment of an audit committee comprising a majority of independent directors. The existence of an audit committee could improve the monitoring of financial reporting and internal control. This could be done by bridging the communication gap between the auditors and management and through strengthening the role of the internal auditors. Although audit committees have been in existence for decades, there are criticisms of the practices of audit committees and a large amount of research have been undertaken to identify an ideal audit committee that would act in the interest of shareholders (Abbott and Parker, 2000; Krishnan, 2005).
Audit committees serve as a bridge in the communication network between internal and external auditors and the board of directors, and their activities include review of nominated auditors, overall scope of the audit, results of the audit, internal financial controls and financial information for publication (FCCG, 1999). Indeed, the existence of an audit committee in a company would provide a critical oversight of the company‟s financial reporting and auditing processes (FCCG, 1999; Walker, 2004).
Audit committee could also enhance auditor independence. Knapp (1987) discovered that an audit committee is more likely to support the auditor rather than management in audit disputes and the level of support is consistent across members of the committee, regardless of whether the member is in a full-time or part-time position, such as managers, academicians and retired partners.
In addition, audit committees could play a role in selecting auditors, determining their remuneration and in the dismissal/retention of auditors. Goldman and Barlev (1974) pointed out that audit committees could observe the financial reporting process and provide recommendations in the selection of auditors, negotiation of fees and termination of external auditors, which would ultimately diminish management‟s power over the auditor. An audit committee is anticipated to ensure that a business organization has sufficient internal controls,
proper accounting policies, and independent external auditors that will prevent the incidence of fraud and promote high quality and timely financial statements.
