Audit report of companies in pdf

Opinion that accounts give a true 1 and fair viewa i. Attestation of compliance with PPIB 1 guidelines Total score 9 a For holding companies this refers to the accounts of the group and its subsidiaries. Okike Table 7. Yearly compliance scores and the requirement to make attestation scores one additional point. The total applicable score Year of report No.

In order to avoid subjectivity — 8 37 8. Otherwise, one would have to prove — 10 35 8. Whilst the compli- ance score per firm between and range from 8 to 9, the mean compliance scores Decree Section 1 and Schedule 9 range from 8.

These desirable information items provide standards with which some of the audit firms the basis for evaluating the level of compliance. Five audit was disclosed in an audit report, the report was reports obtained a compliance score of 7 each, awarded 1 point.

The score for full compliance in Table 8. An audit report with reference to the accounting system underlying the audited financial statements. Analysis of the Voluntary Disclosures VDs still reflected reporting patterns passed down from the colonial days.

The extent of voluntary disclosure i. Statement of Source and Application of Funds. Table 8 reveals that the maximum items of Table 9 reveals that However, before when the Nigerian now follows. The disclosures SSAF in addition to the profit and loss account have been classified for purposes of analysis as and balance sheet see Okike, This was i those not required by ISA 13 and ii those due to the adoption by the accounting profes- required by ISA Because of the importance at- on auditing ISAs were issued in This is tached to the statement18, it became subject to because of the influence of practices in other audits as well, hence expanding the scope of countries such as the UK on audit reporting in audits, and reported by auditors in their report.

Nigeria as well as the affiliation of auditors in As Table 9 reveals, almost all the audit firms Nigeria with international accounting firms.

The incapable of originating audit reporting pat- number of audit reports that referred to the terns. How- audit reports until when it became a na- ever, from when SAS 2 — Information to be tional standard. Another audit firm a Big 6 Disclosed in Financial Statements, issued by the firm which examined the SSAF along with NASB, became effective, all the audit reports other financial statements prepared by its client included the SSAF as part of the financial state- between and failed to attest to the ments audited.

Howard p. During the period covered by their reporting or audit to include the publica- this investigation, some audit firms in Nigeria tion or examination of the SSAF, some of the preferred not to adopt this practice.

Rather than companies and the audit firms may not have qualify their reports for non-publication of a felt the need to include a reference to the SSAF SSAF, many of the audit firms failed to refer to in their reports for , moreover since it was the statement in their report, even when the neither required as an international nor national statements were prepared by the reporting accounting standard.

This might explain ence to the accounting system underlying the why many firms did not refer to this statement audited financial statements. The number de- in One of the non-Big 6 audit firms which creased from 28 in to eight in Be- Figure 5.

Extract from an audit report referring to two accounting systems. Okike Figure 6. After that, the num- Policies and SSAP 2—Disclosure of Accounting ber of reports referring to accounting systems in Policies for the aforementioned reasons. Since use declined. Figure 4 presents ex- ports examined voluntarily included statements tracts from one of the audit reports that referred indicating the basis on which the financial state- to the accounting system underlying the au- ments of their clients had been prepared.

Figure dited financial statements. Table 9 also reveals that between the years On an annual basis, the sample audit reports — both years inclusive , the audit re- with the specific reference to the basis of ac- ports of one company made reference to the counting rose from only two in to 23 review of financial statements which had been between and , 24 in , and then prepared under a different accounting sys- declined subsequently.

A possible explanation tem—current cost accounting, in addition to the for this decline could be the influence of report- historical cost system. An extract from one of such reports Table 9 reveals that there were also disclo- is shown in Figure 5.

It is fundamental the direct effect of the requirements of ISA These are should be aware of the main assumptions on disclosures relating to i the auditing standards which they are based. Other voluntary disclosures required by nual reports any policies adopted especially ISA 13, such as including the signature of the when this can have a material effect on the audit firm and the date of signing the audit periodic results of the business.

In the case of the two reports issued by one This is not surprising given the importance of local audit firm affiliated with a Big 6 audit firm these two aspects of audit reporting. Attesting in , reference to GAAS was necessary soon to the ownership of the report enhances its after the second indigenisation exercises in value.

Similarly, dating the audit report after Nigeria probably as a way of showing depar- signing is very important as it indicates the ture from UK practices. Auditors address. As shown that has carried out a particular audit. This is so in Table 9, 22 representing 4. In the case of a firm with compliance with GAAS. Including the names and ad- firms. The exclusive adoption of GAAS by Big 6 dresses of the audit firms that have carried out affiliated firms suggests that such an affiliation the audit in the audit report lends further cred- may be a source of external influence on audit ibility to the accounts.

Seventeen 3. It is presumed that disclosed the full addresses of the practice that the reporting firms expect readers to believe carried out the audit between and Even tice or to locally recognisable standards of audit where these are disclosed, such reports are practice. However, the reference to relationship between the mandatory and the GAAS by these three audit firms during the non-mandatory disclosures is considered next. Figure 7. Okike Table This suggests that an In order to determine the relationship be- audit firm that discloses less items than the tween mandatory and non-mandatory disclo- minimum required by the law will also disclose sures, the compliance and conformity scores little or no additional information in conformity were cross-tabulated along a scale ranging from with internationally accepted standards of pro- 0 no compliance to 9 maximum compliance , fessional practice.

Conversely, an audit firm and 0 no additional disclosures to 5 maxi- that achieves maximum level of compliance is mum VDs identified in any audit report.

It is not sur- The analysis reveals that majority or prising, therefore, that there is a positive albeit It appears from Table 10 that those audit reports that obtained low compliance scores also ob- tained low voluntary disclosure scores and Table Voluntary disclosures and audit firm vice versa. For example, none of the audit types reports that obtained 7 points in their level of Range compliance attained a conformity score of 5 points21; whereas, all 25 audit reports that at- Mean S.

However, not all the audit re- Big 6 2. For example, Non-Big 6 joint 3. Therefore, low Panel B Audit firms levels of compliance are associated with low Big 6 2. These re- Cross joint 3. Menard decrease over time24, whilst those disclosures suggests that statistical tests analogous to relating to compliance with ISA 13 appear to ANOVA can be used in situations where there have increased over time25, thus providing is one categorical predictor and a dependent support for H4.

This is apparent in the follow- variable that is at least ordinal. In this study, ing disclosures: the dependent variables compliance and con- Signature of the audit firm—whilst the pre- formity were measured at the interval level, ponderant practice in Nigeria appears to be whereas the independent variable, audit firm the use of names only in the audit reports, types, was measured at the ordinal level. The there seem to be a sudden awakening in the results see Table 11 suggest that there are use of both names and handwritten signatures significant differences22 in the extent of VD in the audit reports, which might suggest a when viewed from the perspective of the type future trend.

Therefore, the results provide support erally accepted auditing standards. Also, it is interest- and , to seven in and a total of ing to note see panel A that the pure non- 17 between and These are the Big 6 joint auditors attained higher mean firms whose audit reports in the annual ac- voluntary disclosure scores 3. By pure Big 6 joint auditors, with mean confor- making their report on the letter-headed pa- mity scores of 2. The reason for this can be pers, the audit firms are able to provide the explained by the fact that these non-Big 6 joint shareholders with a full picture of the prac- auditors are also affiliated to other interna- tice, as such letter-headed papers normally in- tional accounting firms, albeit not those in the clude the names of the partners, main office Big 6 category.

This can also ternational affiliation whether or not to a Big 6 give an indication of the size of the practice. Lagos in which Given the above analyses, have VDs in au- the audit was conducted. Table 9 shows that tain the full addresses of the practice that those disclosures not required by ISA 13 such carried out the audit. As part of that commu- country. These seeming differences in audit re- nity, audit reporting in Nigeria has been increas- porting patterns within the country can create ingly influenced by developments in the outside doubts and confusion in the minds of potential world of auditing.

Such influences have come foreign investors. According to of the parent company of a multinational to which Stamp and Moonitz p. Since the Auditing Although there is statistical evidence to sup- Standards Committee ASC 28 in Nigeria has not port the variability in voluntary disclosure pat- issued any audit reporting standards, and the fact terns amongst Big 6 and non-Big 6 audit firms, that the accounting profession has undertaken to the variability of the voluntary disclosures over conform with ISAs, the ICAN must have the time has not been significant over the year means of enforcing compliance with these ISAs.

However, whether increase in investors confi- period. The present situation whereby different acknowledged. Whether they have obtained all the information and explanations which to the best of their knowledge and belief were necessary for the purposes of their audit. Whether, in their opinion, proper books of account have been kept by the company, so far as appears from their examination of those books, and proper returns adequate for the purposes of their audit have been received from branches not visited by them.

In the case of a holding company submitting group accounts whether, in their opinion, the group accounts have been properly prepared in accordance with the provisions of this Decree so as to give a true and fair view of the state of affairs and profit or loss of the company and its subsidiaries dealt with hereby, so far as concerns members of the company, or, as the case may be, so as to give a true and fair view thereof subject to the non-disclosure of any matters to be indicated in the report which by virtue of Part III of Schedule 8 of this Decree are not required to be disclosed.

We have obtained al1 the information and explanations we required for the purposes of our audit. The financial statements are in agreement with the books of account which in our opinion have been properly kept.

We have obtained all the information and explanations we required for the purposes of our audit and have received adequate returns from branches not visited by us. In our opinion the financial statements give a true and fair view of the state of affairs of the company and the group at March 31 and of the profit and source and application of funds of the group for the year ended on that date and comply with the Companies Act To the best of our information and based upon representations received and our examination of the books and records we report that no contravention of the guidelines of the Productivity Prices and Incomes Board has come to our notice in respect of the year ended March 31 Now suppose that the manager must disclose x to comply 1.

The choice of — arises from the fact that Given that there are mandatory audit reporting ISA 13 was first issued as an audit guideline in requirements in Nigeria, an audit firm may vol- This explains the choice of as the untarily disclose information in their audit re- starting point. The choice of to is port in addition to that mandated by statute if it explained at the end of this section.

Although Craswell can be regarded as an ing is of a high standard or international in exception, his study focused on only one aspect outlook — a typical Nigerian mentality see Wal- of audit reporting—qualification.

After a century of British colonial rule Nigeria 8. These represent the attempt by the Nigerian became an independent country on October 1, government to check the imbalance in the con- This meant that like most other former trol of the wealth of the nation by foreign nation- British colonies, Nigeria inherited at indepen- als and a few privileged Nigerians.

In the dence not only British accounting auditing and colonial and early independence era in Nigeria, audit reporting practices see Parker, but foreign investors from the industrialised coun- also a democratic constitution following the par- tries owned the equity capital of the industrial liamentary democracy of the UK and many other commercial and oil sectors of the economy. It is possible that while regu- making, management and control of enterprises lation may seek to improve audit reporting the where expatriate participation was still consid- auditors as experts may have the impression ered vital or desirable in the overall interest of that a particular regulation will decrease audit the economy.

In that case the tempta- 9. In the medium scale businesses to have access to a pool case of auditors this refers to the various users of of investible funds by seeking quotation on the published financial statements to which they lend NSE. Although all limited companies in Nigeria are 7. Dye p. Wallace p. Similarly initially no financial reporting requirements. Okike Since this study relates to the period — applicable to all circumstances. However, the Although seven non-mandatory disclosures were annual reports for some companies that identified in the audit reports over the year obtained a listing in were available because period, the maximum VDs in the audit re- they needed to produce these as one of the ports at any given time was 5.

One company Ovaltine The reason for the low levels of voluntary disclo- WA Ltd. But all efforts made to secure whether or not the means of more than two the annual reports for 12 consecutive years from sub-populations or groups are equal. In this the remaining 51 listed companies were unsuc- study it was used to test for significance of cessful.

These audit firms are affiliated to Hodgson N1. Foster PKF classified by Bavishi as be- This is not suggesting that a decrease in such Nevertheless, it indicates the he suggested that his organisation was formed extent to which international audit reporting because shareholders in Nigeria could no longer practices have influenced reporting patterns in trust auditors to protect their interest in corpo- Nigeria. It must be mentioned that ISA 13 was issued as This is especially true where companies are oper- a guideline in and revised in becoming ating profitably.

But where companies have per- a standard. The fact that it only existed as a formed below the expectations of shareholders, guideline during part of the period — the latter have been known in Nigeria to take covered by this investigation might explain the directors to task see Okike, , Although the 8 points detailed in Table 6 is the Nevertheless, the percentage of audit reports same for each annual report, the items differ as that fully complied with ISA 13 increased from between an individual company and a holding 2.

These audit firms company. The non-Big 6 audit firms whether as single or On the other hand, the office that is identified in as joint auditors obtained higher mean compli- the audit report may not be the office that actu- ance scores 9. SSAF served a useful purpose such as indicating, national office. See Epstein and Estes for argu- to which the company has been financed by ments for and against standardised audit report- internally and externally generated funds and ing.

Flint p. So far, no audit reporting concerned there is no universal set of detailed standard has been issued. Cooke, T. In Nigeria, a However, this author is disclosure practices and audit quality. Craswell, A. New York: Garland Publishing, Inc. Journal of Finance, necessarily affect the structure of accounting 46, pp. Dye, R. Journal of Accounting Research, Autumn, pp. Journal of Business, April, pp. Abdullahi, N. University of Exeter, Doctoral Thesis. Report, Conclusions and Recommendations.

New York: Alile, H. Market in Operation. Lexington, MA: Lexington Books. Archer, G. Practice and Theory, 7, pp. Ball, R. Journal of Accounting Research, 20 suppl. Journal of Finance, 44, pp. Flint, D. Limited for the ICAS.

Bavishi, V. Brindle, I. In Howard, L. Hussein, M. Buzby, S. Bryman, A. London: Routledge. Campbell, L. Cerf, A. Berkeley: University of California. Journal of Financial Economics, 3, European capital markets. Journal of Accounting Re- pp. Leftwich, R. Chow, C. The components of an operational audit include organizational structure , data accuracy, processes, procedures, management, and security staffing, and provides productivity and asset list.

Integrated audit : The document combines a financial audit and assessment of the information technology systems and infrastructure in a department or area. Its goal is to assess the effectiveness of coordination between information systems and business processes. The assessment correlates with the achievement of determined goals and objectives. Information system audit : Information system audit addresses the internal control environment of digital information processing systems and their programs.

The information system audit also focuses on the real-time performance of system assessments regarding upgrades, improvements, and implementations. Special investigation : The special investigation audit focuses on violation issues relating to state laws and company regulations and policies. Investigative audits conduct necessary reports about internal theft, misuse of assets, and conflicts of interest.

Within a specific period, the internal auditor requests status reports regarding remedial actions on a particular date and evaluates their accuracy and effectiveness for validation testing procedures. These steps are critical to assess current processes and whether revisions are necessary. Components of an Internal Audit Report Internal audit reports are necessary for organizations as it details any identified deficiencies and recommendations by internal auditors.

There are no set standards for the format of an internal audit report. However, compiled below are the vital components you can find in one. It includes reasons such as high-risk perceptibility, change management , and risk fluctuations.

The background objective describes the overall scope of the internal audit report. It describes the daily tasks, achievements, covered areas, risk assessments, among others. Deficiencies : In an internal audit report, the identified deficiencies by auditors will always be present. The deficiencies result from the overall findings from the auditing process, whether these are minor or significant deficiencies. As such, this section is the most vital part of the internal audit report.

Recommendations : As internal auditors find deficiencies in the report, it is also their responsibility to provide effective recommendations and countermeasures to address these deficiencies. Internal auditors cannot select which measure must take place, but they give expert advice on the best routes to follow.

Follow-up and tracking : Another section of the internal audit report represents follow-up and tracking. However, the follow-up section is mostly present in quarterly and annual reports. How To Write an Effective Internal Audit Report Aside from providing management recommendations for improvement, the ultimate purpose of an audit report is to persuade its readers to take action.

The impact is everything when it comes to creating an internal audit report. Below are helpful tips to ensure the effectiveness of your audit reports to catch their attention and take action. Tip 1: Keep the Report Concise There are plenty of audit reports that run over a thousand words long as it gives scrutinizing details in its content. Rather than lengthening in long paragraphs of pages containing complex issues and every aspect of engagement, make sure to make the content short without missing essential details.

Overwhelming readers with lengthy pages of internal auditing will become less efficient. Meaning, an internal auditor must utilize effective communication. Plain and articulate language can easily be read and understood, and using it sells ideas much faster. There are online tools you can use to gauge the reading comprehension of your text, and it is advisable to utilize them as often as possible.

Many stakeholders can read and understand complicated dissertations , but it does not equate to being persuasive. You can do this by sorting out the document to make the best ideas stand above the rest. Incorporate the use of headings, sub-headings, and call-out boxes to emphasize vital information in the audit. It is also helpful to include examples, tables, charts, and figures to highlight issues.

It is also advisable to use executive summaries , tables of content, and indexes to locate essential information in the report. Tip 4: Remember to Incorporate the Basics Uphold proper grammar, punctuation, and spelling. Errors relating to these writing essentials result in readers with a lasting impression that you show no care for your work. An error can considerably impact your reputation as an auditor, especially your credibility. Remember to pay attention to details.

It proves difficult to be assertive and impactful to readers by losing your reliability over grammar, spelling, and punctuation. Tip 5: Consider All Implications It is critical to be fair and unbiased in the choice of words and sentences, considering the implications to all readers.

The objective of the report is to convince the readers to buy your ideas. Meaning, the tone of your audit report must be objective. A biased and unfair tone in the internal audit report seldom equates to persuasion.