- EFFECT OF FINANCIAL MANAGEMENT STRATEGIES IN THE MANAGEMENT OF PUBLIC ENTERPRISE (A Case Study of NNPC)
- THE IMPACT OF FINANCIAL MANAGEMENT STRATEGIES IN THE MANAGEMENT OF PUBLIC ENTERPRISE (A Case Study of NNPC)
- THE IMPACT OF CORPORATE GOVERNANCE MECHANISM ON FIRM PERFORMANCE IN NIGERIA (A STUDY OF CADBURY NIGERIA PLC)
- ROLE OF FINANCIAL CONTROL IN PUBLIC SECTOR (A Study of Lagos State Ministry of Finance, Alausa)
- CORPORATE GOVERNANCE AND FIRM PERFORMANCE: AN EMPIRICAL EVIDENCE FROM SELECTED LISTED COMPANIES IN NIGERIA
- CORPORATE GOVERNANCE AND FIRM PERFORMANCE: EMPIRICAL EVIDENCE FROM SELECTED LISTED COMPANIES IN NIGERIA
- ENHANCING CORPORATE ACCOUNTABILITY THROUGH EFFECTIVE AUDIT SYSTEM (A Case Study of Sheffeild Risk Management Limited)
- IMPACT OF FINANCIAL MANAGEMENT IN THE PUBLIC ENTERPRISE (A Study of Nigeria National Petroleum Corporation)
- THE ROLE OF FINANCIAL CONTROL IN THE PUBLIC SECTOR (A Case Study of Lagos State Ministry of Finance, Alausa)
- CORPORATE FRAUD RISK: AN INSIGHT FROM THE NIGERIAN FINANCIAL INSTITUTION (A STUDY OF SOME SELECTED MICRO-FINANCE BANKS IN NIGERIA)
ENHANCING PUBLIC CONFIDENCE IN FINANCIAL REPORT: THE ROLE OF CORPORATE GOVERNANCE
This study examined the role of corporate governance in organizations, and how the public confidence can be restored in organization through financial reporting. The study aimed at ascertaining the extent to which financial helps organizations in achieving their corporate objective. In the course of achieving these objectives, certain research questions were raised, which led to the adoption of three research hypotheses. The study particularly looked at the corporate governance in Consolidated Breweries Nigeria Plc in Edo State. A total of 100 samples was randomly selected from the organization and were administered questionnaire. Based on the descriptive statistics that was carried out. The chi square test showed that audit report significantly improved the process of corporate governance in Nigeria. It was also confirmed that effectiveness of financial reporting significantly improves corporate objectives. Lastly, the result showed that corporate governance help enhance public confidence of financial reports. In the light of these findings, conclusions were drawn and recommendations given. The study strongly recommend that: the auditor being able to detect malicious act and scandals in organizations finance, is equally able to give recommendations for board of the directors, the neglect of this responsibility is a matter that needed to be reversed in order to effect the firmness of corporate governance in organizations.
TABLE OF CONTENTS
Title Page i
Table of Contents vii
Chapter One: Introduction
1.1 Background of the Study 1
1.2 Statement of Problem 3
1.3 Research Questions 3
1.4 Objectives of the Study 3
1.5 Statement of Hypotheses 4
1.6 Significance of the Study 5
1.7 Scope of the Study 6
1.8 Limitation of the Study 6
1.9 Definition of Terms 7
Chapter Two: Review of Related Literature
2.1 Introduction 13
2.2 The Concept of Corporate Governance 14
2.3 Synopsis on Financial Reporting and
Development of Audit Report 15
2.4 Objective of Financial Reporting 17
2.5 Audit General Standards 19
2.6 Qualification of Auditor 21
2.7 Disqualification of Auditor 22
2.8 Qualities of an Auditor 23
2.9 Independence of an Auditor 24
2.10 Auditors Examination and Evaluation
2.11 Internal Control 29
2.12 Audit Planning 31
2.13 Audit Evidence 33
2.14 Obtaining Audit Evidence 34
2.15 Forms and Distribution of the Financial
2.16 Timeliness of Financial Reporting 36
2.17 Timeliness of Financial Reporting 36
2.18 Reporting to Management 37
2.19 Prevention and Control of Fraud through
2.20 The government issues 45
Chapter Three: Research Method and Design
3.1 Introduction 53
3.2 Research Design 53
3.3 Description of the Population of Study 54
3.4 Sample size 54
3.5 Sampling Technique 55
3.6 Sources of Data Collection 55
3.7 Method of Data Presentation 57
3.8 Method of Data Analysis 58
Chapter Four: Data Analysis, Presentation
4.1 Introduction 59
4.2 Presentation of Data 60
4.3 Data Analysis 65
4.4 Test of Hypotheses 75
Chapter Five: Summary of Findings,
Conclusion and Recommendations
5.1 Introduction 82
5.2 Summary of Findings 82
5.3 Conclusion 84
5.2 Recommendations 84
Appendix I 89
Appendix II 90
1.2 Background of the Study
Effectiveness of financial reporting is one area in accounting that is recognized as the power house of financial dealings and management: (Howard, 2002, p. 2). Financial report constitutes the climax of all the planning and operation in the corporate governance. The audit reputation may then depend upon the contents of its report. In essence this implies that effectiveness of financial report is justified only if it is able to repose confidence in the curiosity of its teeming shareholders.
According to section 259 of company and Allied matters Act (CAMA) 2004, the financial report prepared by an auditor may include “A report to it’s members the accounts examined by them and in every bank sheet and profit and loss account, and on all group financial statements, copies of which are to laid before the company in a general meeting during the auditors tenure of office”
Recognizing the importance attached to the final report, the auditing practice committee sponsored by the six major accounting standards and guidelines have made suggestions and provided a member of example of audit report to apply in various circumstances (Alvin, 2007).
The importance of a corporate financial report cannot be overemphasized as the auditor may be held responsible to a great extent of what he states or does not state as his opinion to the trueness and fairness of company’s financial statement. And his responsibility may extend not only to his immediate client (Milky, 2008:2).
This study seeks to ascertain how public confidence in financial reporting can be enhanced and the implications it has on corporate governance. It also aimed at ascertaining how it influences the decision of external users of company’s financial statement. The external users include shareholder’s government and potential investors.
1.2 Statement of Problem
Financial reporting cannot be considered effective unless the report is timely provided. This may form the culmination of a great deal of deterred work and effort over a long period and yet may be summarized in a few lines.
1.3 Research Questions
This study seeks to find answers to the following research questions:
i. Is financial reporting relevant in corporate governance?
ii. Do financial reporting help organizations in achieving their corporate objective?
iii. Does the incorporation of corporate governance help in building public’s confidence in financial report?
1.4 Objectives of the Study
The objective of this study is to evaluate the role of corporate governance in enhancing public confidence in financial report.
The research study also has the following interrelated objectives:
i. To ascertain the relevance of financial reporting in corporate governance
ii. To determine the extent which financial reporting helps organizations in achieving their corporate objective.
iii. To find out whether the corporate governance help in building public’s confidence in financial report.
For reports to have an impact in any organization, it requires the truth of these assumptions. The impact of this report would be examined for the purpose of conveying information, reporting, finding, putting forward ideas and making recommendations.
1.5 Statement of Hypotheses
Hypothesis is a tentative statement about relationship that exists between two or among many variable to prove their validity. Therefore, the hypotheses formulated for consideration are as follows:
1. Ho: Financial reports have not significantly improved the process of corporate governance in Nigeria.
HI: Financial reports have significantly improved the process of corporate governance in Nigeria.
2. Ho: Effectiveness of financial reporting does not significantly improve corporate objectives
HI: Effectiveness of financial reporting significantly improves corporate objectives
3. Ho: Corporate governance does not enhance public confidence of financial reports.
HI: Corporate governance help enhance public confidence of financial reports.
1.6 Significance of the Study
It is expected that the findings of the, research study in conjunction with findings of similar research studies on the subject enhancing public confidence in financial reporting and the implications for corporate governance would be useful to the public and private sector.
A license result of this study would be to find out of the objectives of the financial reporting one being achieved and if these objectives have furthered the growth of the corporate governance in Nigeria
1.7 Scope of the Study
This study is restricted to financial reporting in corporate governance with particular reference to Consolidated Breweries Nigeria Pie.
The research work is designed to look into audit report in corporate governance to have an accurate investigation of information in different categories of workers in various department of Consolidated Breweries Plc.
The period of coverage is between (2006- 2011) five years.
1.8 Limitation of the Study
In carrying out this study, the researcher strictly limit him with the case study. This is because of time constraint in conducting the research work.
Lack of adequate finances of transportation of fathering data collection and they expanded in the case of the research work.
The computation of information used for the preparation of their research work has not been easy. Another noticing problem is the unwillingness of some executive officers to give information and have a direct interview with them.
Finally, the researcher also limits himself on the role of financial reporting and corporate governance in Nigeria as it affects public confidence of corporate reporting.
1.9 Definition of Terms
In carrying this research the following important terms were used and their definitions are seen below
1. Financial report: These consist of the balance sheet, profit and loss account, sources and application of fund, value added statement five years financial summary etc. it is the statement which communicates information about the company to those who have a right to receive it, e.g. the shareholders, loan creditors etc. It provides an indication of the company’s trading or operational performance and give a fixed point, snap-short of its financial position at a particular date (section 331 CAMA).
2. Audit: Audit is a Latin word meaning to “hear” it is a process carried out by qualified parsons called auditor on the account prepared by management of organizations, parastatals and establishment to ensure adherence to laid down rules or policy. The auditing standard Board defined audit as “the independent examination of opinion on the financial statement of n enterprise by an appointed auditor in accordance to the term of his engagement and compliance with any relevant statutory obligation and professional requirements.
3. Audit report: This is a statement made by an independent auditor expressing his opinion as to the true and fairness of the financial statement examined by him and whether or not it is in compliance with the relevant act.
4. Internal control: This is defined by the Auditing Standard Board as the system of control, financial or otherwise established by management in order to carry on the business of the enterprise or company in an orderly and efficient manner and ensuring adherence to management policies, safeguard the asset and secure as far as possible the completeness and accuracy of records.
5. Financial institutions: In this study shall be taken for the banks that are into commercial activities, that is commercial banks, hang branches across the federation.
6. Auditing guideline: Auditing guidelines are intended to give guideline on: (a) Procedure by which the auditing standards may be applied. (b) The application of auditing standard to specified items appearing in the financial statement of enterprises. (c) The application of auditing standards to particular sector, industries or service organizations. (d) Other matters relating to the proper performance of audit work.
7. Corporate Governance: Is an all- encompassing concept that seeks to guarantee and institute credible bedrock governance standards, in the creation of wealth, in the light of the primacy that corporations have come to assume in privately- led economies.