Thesis Abstract

Abstract
Bank failures have significant implications for the financial system and the economy as a whole. This research aims to investigate the role of auditors in bank failures in Nigerian banks. The study will examine the extent to which auditors contribute to early detection of financial distress in banks and the effectiveness of their audit processes in identifying and reporting potential risks. The research will utilize a mixed-methods approach, combining quantitative analysis of financial data and qualitative assessment of audit practices and procedures. Data will be collected from financial reports, audit files, and interviews with auditors, regulators, and bank management personnel. The analysis will focus on identifying common audit deficiencies and evaluating their impact on the likelihood of bank failures. The findings of this research will contribute to the existing literature on audit quality and bank failures, particularly in the context of Nigerian banks. The results will provide insights into the challenges faced by auditors in detecting financial irregularities and the implications for regulatory oversight and risk management practices in the banking sector. Understanding the role of auditors in bank failures is crucial for enhancing the effectiveness of audit processes and ensuring the stability of the financial system. By identifying areas where audit practices can be improved and regulatory oversight strengthened, this research aims to promote greater accountability and transparency in the banking sector. Overall, this study seeks to shed light on the intricate relationship between auditors and bank failures in Nigerian banks and provide recommendations for enhancing audit quality and regulatory supervision. The findings will be valuable for auditors, regulators, policymakers, and other stakeholders seeking to mitigate the risks associated with bank failures and promote financial stability in Nigeria.

Thesis Overview

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Bank’s managements are saddled with the responsibility of preparing the accounts and financial statements of a bank. An Audit is expected to be carried out annually to ensure that the statements of accounts that have been prepared and presented as required by law. (CAMA 1990)

According to Webster’s English Dictionary, an Audit is “an examination intended to serve as a basis for an expression of opinion regarding the fairness, consistency, and conformity with accepted accounting principles of statements prepared by a corporation or other entity for submission to the public or to other interested parties”.

In another way, an Audit is defined as “an independent examination of the books and records of an entity in order to express an opinion as to whether the accounts and financial statements represents a true and fair view of the state of affairs of the entity” (Clinton, 2006). From these definitions, it is clear that an Audit is an independent examination and expresses an opinion on the fairness, conformity and truth about the statements as to the state of affairs of an entity.

The Auditor therefore plays a fiduciary role in the running of a bank, as such; they owe the bank and its stakeholders a duty of care in the performance of their duties. The Nigerian law made giant strides in guaranteeing the independence of the Auditors which is important for his position as a trustee. Such strides have been made in the area of Appointment, Remuneration, Rights, Powers and renewal of tenure section 359, 360, 361, and 363 respectively of company and Allied Matters Act (CAMA 1990) .

Auditing in Nigeria is regulated by various statutes and standards of Accounting and Auditing. But inspite of this, accusations has been made against the professional Auditor as to it failure to express a truly independent opinion as to the true and fail view of financial statement of banks presented before her. The veracity of these allegation is the object of this study.

1.3 IN THE LIGHT OF THE ABOVE THE RESEARCH QUESTIONS ARE

Do the existing laws permit the auditors to do what the stakeholders expect of them?

Have banks auditors actually contributed to the distress and failure of their client banks?

To what extent may an auditor be held responsible for a banks failure?

1.4 OBJECTIVE OF THE STUDY

The objective of this study is to establish an independent opinion on the argument that banks auditors have contributed to the failure of their client banks

To examine the effect of fraud on a bank performance
To find out the effect of managers exploitation on the investors in bank..
To determine policies, laws and institutions necessary to regulate and sanitize the Nigeria banking industry
· To Ascertain whether the auditors have any role to play in checking the abuse of powers and ensuring efficient reporting Ascertain whether auditors collaborates in bank failure

· STATEMENT OF THE RESEARCH HYPOTHESIS

Hypothesis one

H0:it is not true that auditors have collaborated to the distress and failure of their client banks

H1: it is true that auditors have collaborated to the distress and failure of their client banks

Hypothesis two

H0it is not true that auditors have contributed the failure of their client banks

H1 it is true that auditors have contributed the failure of their client banks

HYPOTHESIS THREE

H0: The relationship between auditor and bank management enhances

bank failure.

H1: The relationship between does not enhance bank failure.

1.6 SCOPEOF THE STUDY

The study examines the existing legal provisions in Nigeria on auditing particularly. (CAMA 1990, NDIC Decree of 1998 and BOF1A 1991 as amended to date). The study questionnaire is administered on owners and depositors within Benin metropolis to ascertain their opinion on the allegation against the auditors

Secondary data on bank distress from the NDIC publications are used in the study

1.7 RELEVANCE AND SIGNIFICANCE OF THE STUDY

The significance of this study are numerous. The result of the study could be useful to the following due to the accompanying reasons;

The result of the study will assist professional like ICAN, BOFIA and CBN in drawing up more stringent codeof ethics and robust professional requirements for members.

The professional accountants will find the outcome of the study helpful in that he will become fully aware of the consequences of his actions or inactions on his integrity more so as me ac- a is now a global village. If the assertion is found true, it will help to improve their supervisory efforts and place less reliance on auditors report.

These set of stakeholders will be enabled to evaluate the existing legal provisions and make necessary amendment or enactment of further law if necessary

1.8 LIMITATION OF THE STUDY

The limitations of this study reveal certain problems that wasencountered during the information gathering process to problem of the data itself. They include

1. Insufficient and scare related materials to make the work more robust

2. Time constraints: there was equally the problem of time constraints which inhibits the period of study or investigation ought to have been done.

iii. Un co-operative and intimidating attitude of respondents during the course of interview militated against the speed of time

iv Absence of uniformity in financial year endings of financial institutions is another constraints