Auditor’s Role in Safeguarding the Going Concern Concept in Nigeria.
Abstract
This study dealt on Auditors role in safeguarding the going concern concept in Nigeria. The burden of preparing the financial statement lies with the director, the auditor is required to report on these financial statements.
A lot of people have failed to understand that the role of an auditor is not to detect fraud or error but the key role of an auditor is to “examine the financial statement prepared by the director of the company and report on it to shareholders.
This study sought to investigate the relationship between the role of an auditor and the going concern of the company, to assess the effect of Auditors beneficial shareholdings on the credibility of audit report,
to ascertain the effect of auditors non audit engagement services on the credibility of external audits, to examine the impact of non-compliance with audit rotation policy on audit performances.
In achieving this objective, a number of research tools were employed both the primary data and the secondary data.
The research did not limit herself to a particular audit firm in a state, indefinite statistical formula was used and the five hypotheses was tested using the chi-square.
Introduction
Background of Study
The historical development of auditing can be traced back to the 8th century industrial revolution, when our present day business organization were just evolving hence it is as business itself, Wolf (1979).
Business have grown into a main complex and complicated network of contracts and activities than what used to be the case in the past. Directors now run organizations on behalf of the owners (shareholders);
this has brought about stewardship accounting. Stewardship accounting is the process whereby managers of a business, account or report to the owners on the state of affairs of the business.
Aguolu (2008:1) defines auditing simply as “the independent examination of the financial statements of an organization with a view to expressing an opinion as to whether these statements give a true and fair view and comply with the relevant statutes and the international financial Reporting Standards”. The person who carries out such an examination and expresses the opinion is called an auditor.
Going concern is one of the accounting concepts; it means that the business unit will operate in perpetuity, i.e. the business is not expected to be liquidated in the foreseeable future.
A business is considered a going concern if it is capable of earning a reasonable net income and there is no intention or threat from any source.
References
Adeniyi, A.Adeniji (2000) Auditing and investigation, University of Benin publisher, Edo.
Aguolu, O. (2008), Fundamentals of Auditing, Enugu, Institute for development studies.
Aguolu, O. (2008), Fundamentals of Auditing, Enugu, Institute for development studies.
Alalade, O.A, (1987) Essays on auditing concept and practice, peacock publishers, Lagos
CAMA (1990) “Company and Allied Matters Act” FGN