Zambrut
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Economy

Statutory Provisions

Statutory Provisions
Every statement of financial position and statement of comprehensive income, and on all group financial statements
Compliance with statutory provisions by auditors in the cause of their engagements plays an important role in giving a quality report to investors, capital market operators and practicing auditors. The study examined effect of compliance with statutory provisions by auditors on enhancement of quality of audit report in Nigeria. Specifically, the study analyzed the effect of compliance with statutory provisions on quality of audit report and how audit fees could be used as a determinant factor of audit report quality in Nigeria. The study was a descriptive survey and qualitative one. It employed frequency distribution and simple percentage in order to meaningfully describe the data gathered for the study. The ordinary least square (OLS) stated in the form of correlation and multiple regression models were used in the data analysis. Results revealed that that there is a positive significant correlation between quality audit report, compliance with statutory provisions and audit fees with specific values of 0.328** for compliance with statutory provisions and 0.367** for audit fees. This connotes that quality audit report moves in the same direction with compliance with statutory provisions and audit fees.
The study concluded that compliance with statutory provision has the capacity to improve the quality of audit report and that the higher the audit fees, the higher the quality of audit report. Overall, it could be concluded that independence of auditors has a positive relationship with compliance with statutory provisions which will breed good quality of audit report. The research shall be useful to the investors, capital operators and auditors.
Compliance with statutory provisions by auditors in the cause of their engagements, plays an important role in giving a quality report to investors, capital market operators and practicing auditors.
Audit reports are prepared to provide useful information in making business and economic decisions (Dogan, Coskun, & Celik, 2007). This audit report is important for the users, as they use the audited report to assess the financial condition and performance of related companies ( Call for paper 2019 , 2010).
Compliance is a state of being in accordance with a professional operational guidelines or specifications. It is an efforts to ensure that accounting and auditing professional are abides with the rules and regulations guiding the preparation of financial statements
Audit reports evaluate the strength and thoroughness of compliance preparations, security policies, user access controls and risk management procedures.
Okaro, Okafor and Ofoegbu (2015) posited that quality audit promotes the credibility of financial statements. According to Economic and Business Journal .(2001) most financial institutions Chief Executive Officers and managers lack the accounting knowledge and resource to create a suitable audit report. In fact, many financial institutions rely on the auditor’s report in the financial statement as a guide towards making of any financial decision.
Therefore, compliance of auditors with statutory provisions indirectly affects the audit reports prior to doing their real job ( Zambrut Journals , 2014). In this circumstance, stakeholders have a high level of reliance on auditors when they make any financial decision on investment.
The statutory audit of companies is coded in the companies and allied matters Act, 2004, section 357 which deal with the appointment of an auditor by members at the annual general meeting (AGM). Section 359 of CAMA, 2004 outlined the statutory duties of an auditor to include: (i) the primary duty of the auditors of a company is to make a report to its members on the accounts examined by them, and on every statement of financial position and statement of comprehensive income, and on all group financial statements, copies shall be laid before the company in a general meeting during the auditors tenure of office; (ii) Schedule 6 of CAMA 2004 sets out those matters that must be expressly stated in the auditor report . (Enofe, A. O. Chijioke, M. &Adeyemi, A.2013).
The objective of an audit, therefore, is to plan and perform the audit to obtain appropriate audit evidence that is sufficient to support the opinion expressed in the auditor’s report. Insufficient or inappropriate audit evidence may lead to wrong conclusions and this may affect the quality of the report (Ilaboya and Ohiokha, 2014). Companies with a reputable and credible financial reporting are likely to change auditors when their audit quality is questioned to avoid being delisted in capital market.
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