The Role of External Auditors on Financial Accountability of Managers in Deposit Money Banks (DMB) in Nigeria
CHAPTER ONE
Objectives of the study
The general objective of the study is to assess the the role of external auditors on financial accountability of managers in deposit money banks (DMB) in Nigeria. Specific objectives; In order to achieve this objective the following specific objectives are designed in that direction.
- To assess how effective external audit is on Deposit Money Banks accountability and transparency
- To examine how external audit report is dealt with by Deposit Money Banks in Nigeria.
- To ascertain the challenges that Deposit Money Banks face in ensuring accountability and transparency.
CHAPTER TWO
LITERATURE REVIEW
A review of related literature is deemed necessary for reviewing different literature on the subject under study and to bring out relevant facts on the similar work done by others in the past and then relate it to the research work. It also determines and conveys understanding in appreciation of what the researcher has intended to achieve.
In this chapter, several issues, articles tests and comments relating to various aspects of the study are diffused critically. This is necessary because it provides good information both to the researcher and others who may like to make use of the research work.
INTERNAL AUDITOR
Internal Auditors are the employees of the bank employed to discharge their duty of unbiased and objective reviews of the work of other employees of the same organization in order that the management can be assured of receiving the right quality of information. Internal auditors must be independent from the entire administrative and operating department on whom they are reporting; in order words internal audit department should be a separate department in its own right.
The objective of internal auditing is therefore to assist all members of management in the effective discharge of their responsibilities by furnishing them with analysis, appraisals, recommendations and pertinent comments concerning activities reviewed. Internal auditors are concerned with any phase of business activity in which they may be of service to management. This involves going beyond the accounting and financial records to obtain a full understanding of the operation under review.
CHAPTER THREE
RESEARCH METHODOLOGY
Introduction
In this chapter, we would describe how the study was carried out.
Research design
Research design is a detailed outline of how an investigation took place. It entails how data is collected, the data collection tools used and the mode of analyzing data collected (Cooper & Schindler (2006). This study used a descriptive research design. Gill and Johnson (2002) state that a descriptive design looks at particular characteristics of a specific population of subjects, at a particular point in time or at different times for comparative purposes. The choice of a survey design for this study was deemed appropriate as Mugenda and Mugenda (2003) attest that it enables the researcher to determine the nature of prevailing conditions without manipulating the subjects.
Further, the survey method was useful in describing the characteristics of a large population and no other method of observation can provide this general capability. On the other hand, since the time duration to complete the research project was limited, the survey method was a cost effective way to gather information from a large group of people within a short time. The survey design made feasible very large samples and thus making the results statistically significant even when analyzing multiple variables. It allowed for many questions to be asked about a given topic giving considerable flexibility to the analysis. Usually, high reliability is easy to obtain by presenting all subjects with a standardized stimulus; observer subjectivity is greatly eliminated. Cooper and Schindler (2006) assert that the results of a survey can be easily generalized to the entire population.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered.
CHAPTER FIVE
CONCLUSION AND RECOMMENDATION
Introduction
This chapter provides a summary of the major findings of the study, conclusion and recommendations. The study assesses the role of external auditors on financial accountability of managers in deposit money banks (d m b) in Nigeria by focusing on Union Bank in Awka metropolis.
Conclusion
From the research work carried out, the following conclusions were arrived at. Most of the total respondents agreed that there is effectiveness in external audit on Deposit Money Bank managers in the pursuit to be transparent and accountable. There is therefore more to be done for external audit report to be effective in the Deposit Money Banks industry.
It was revealed also that the audit reports of Deposit Money Banks are not discussed with the key players and recommendations are not enforced and implemented and as such contributes nothing to accountability and transparency thereby further reinforcing the assertion that corrupt practices is pervasive on Deposit Money Bank activities.
Finally the challenges Deposit Money Banks face are as a result of non – compliance to their own procedures and regulations, though logistically they are not constraint to ensuring that accountability and transparency approaches are followed to the latter.
In conclusion external audit has impact on Deposit Money Banks managers activities in relation to accountability and transparency.
Recommendations
For the impact of External audit to be effective on Deposit Money Banks manager’s activities in relation to accountability and transparency the following have been recommended.
Project end evaluation should not be only narrative as has been the case in most evaluations but should include audited financial statement to be signed by the external auditor.
External Auditors should not be hired by management of Deposit Money Banks but by the Board of Directors or Donors so the external auditors will report to the Board or the donor or funding agency and not management of Deposit Money Banks. Accountability can best be enforced when anomalies are identified and management is called to explain why compliance is compromised. Deposit Money Banks contracts with donor agencies could end if it is clear in external audit report that there has not been transparency and that funds meant for beneficiaries are not properly accounted for, so that only credible and accountable and transparent Deposit Money Banks are supported to implement projects.
Audit Committees should be established in Deposit Money Banks so that they can educate staff on the findings in the audit reports. This will help put information available to all. The audit committees would ensure that external auditor‘s recommendations are studied, enforced and implemented.
Beneficiary communities and stakeholders should be educated to demand full disclosure of the entire package of support such that they can hold Deposit Money Banks implementing the projects within their community accountable if they refused to render the agreed support package. The Deposit Money Banks also at the time of evaluation would require the various stakeholders to mention areas of support for the external evaluator to document demonstrating how successful they have been and the impact thereof. When communities and stakeholders who these grants are meant to support understand their role in the roll out and achievement of outcomes of the Deposit Money Banks, the can hold them accountable.
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