Accounting Code of Ethics: Severity Analysis of Threats to Compliance of Auditors in Nigerian Business Environment

Sani Alfred Ilemona,Sunday Nwite

doi:10.11648/j.jfa.20210901.13

Sani Alfred Ilemona, Sunday Nwite

Open Access

https://doi.org/10.11648/j.jfa.20210901.13

Copy DOI

Abstract

The study examined the severity of the five (5) major threats to compliance with code of ethics by auditors in Nigerian business environment. These threats are Intimidation Threats, Self interest Threats, Advocacy Threats, Familiarity Threats and self review Threats. Using survey research design, data for the study were obtained primarily through questionnaire deigned to reflect the five (5) point Likert scale. The internal reliability of the constructs on each item of the threats was done using Cronbach’s Alpha coefficient and value above 0.70 obtained for all items of the construct. With random sampling, questionnaires were distributed to 360 auditorsfrom three (3) states of Nigeria namely Kogi, Benue, and plateau states in private practice and in employment of organizations out of which 210 of them were returned with 195 found usable. Responses obtained on the extent to which respondent agree or disagree with the nature and severity of items of the construct on each threat were analyzed empirically using simple percentage of non – parametric statistics and ranking of percentages. Findings indicated that among the threats faced by auditors in the course of their duty, Intimidation Threats (ITs) ranked first and the most severe of all categories of threats. Further correlation analysis revealed a strong, positive and significant relationship between the threats. The study recommended among others that auditors should have adequate and sufficient regard for their career and reputation striving constantly towards objectivity, honesty, and probity. These are traits or character of complete virtue that enable auditors to stand firm against all odds of threats to the profession.

Highlights

IntroductionAccounting being a regulated profession in Nigeria, most if not all the ethical requirement and performance of accountants and auditors (members of the profession) have statutory basis
Majority of the respondents representing about 67.4% of the responses on Intimidation Threats (ITs) questionnaire construct indicated agreement that efforts by auditors to comply with Accountants Code of Ethics (ACE) are impeded by ITs such as loss of job, litigation and all forms of threats either actual or perceived
Compliance with the principles of ethics become sacrosanct since the work of auditors entails offering independent and expert opinion that might likely affect the right decisions of clients but general public

Summary

Introduction

Accounting being a regulated profession in Nigeria, most if not all the ethical requirement and performance of accountants and auditors (members of the profession) have statutory basis Examples of such ethical requirements span through the provisions of companies and Allied Matters Act (CAMA), Banks and other Financial Institutions Act (BOFIA), the CBN act, Insurant Act, the Securities and Exchange Commission (SEC), requirements of Nigerian Stock Exchange (NSE) and other stationary requirements that professional accountants and auditors are expected to comply with while performing their duties. Compliance with these requirements is germane to good conduct and professionalism in satisfying the needs of individual clients and a means to protect public interests [35].

Methods

Results

Conclusion