Auditors' Liabilities to Organizations and Societies in General

Abstract

The belief that whenever an auditor i:i engaged with any business organization , the objective(s) of such organization are likely to be achieved, seems not to stand the test of time, considering the rate o f business failures and the inherent loss of economic resources resulting from such failures by the stakeholders. Financial statement is one of the tools which companies employ to present and ex-ray their performance or position over a period of time. It is the duty of Auditors to examine these financial statements and ensure that what companies claim to have, really exists. Stakeholders place the is reliance upon these audited statements for their economic decisions. Surprisingly, some of these financial statements that have been reported 10 have shown a true and fair view and complied with relevant statutes by an auditor, turns out to be a reverse. It is on the premise of the above, that this research project was set out to actually position. Those factors, which are responsible for the unreliable reports that subsequently lead to business failures, have been unraveled. The researcher also went ahead to portray the impact of these unreliable company financial statements in economy and the possible panacea. Primary and secondary sources of data were employed, questionnaires were served to company Directors, Financial controllers and senior Accountants engaged with the selected organizations. These companies are manufacturing ndustries , financial institutions and trading concerns that prepares annual financial statement. On collect ion of the information (data) from the respondents , they were ana lyzed using tables, percentages, bar charts and chi-square (X2 ) . Discoveries were made at the End of the study as follows: That business organizations don ' t achieve their objectives with the engagement f audito rs, irrespec tive of the fact that these auditors certify the financial statement after a thorough examination. This unreli able report from corporate auditors goes a long way in misleading the shareholders , government and the entire society leading to the rampart business collapse in the recent time. It was also discovered that the non-independent of auditors and their dual role (e.g. being financial adviser and audito r at the same time) to a company, influences them to give a mis lead ing report. After the above findings, recommendations were made, thus: Different arms of the law, including Banks and other Financial institutions Board (BOFID), Companies and Allied Matters Decree (CAMD), According Professional Bodies and other regulatory agencies should step in through educating all the concerns, instituting monitoring teams that will ensure compl iance to all the laws enacted. These steps if followed, will no doubt, restore reliance and accountabil ity in relation to the company finan cial statements in one hand, and t e auditors' report in the other hand.