Abstract
The mixed reactions occasioned by disappointing top-level financial reporting failures has not dampened the unsettling loss of confidence of key players and other financial statement users on the relevance of audit and financial statements in making the right investment decisions. There is a contemporary debate trying to resolve mixed feelings and misplaced perceptions of auditing concepts in filing widened expectation gaps of auditor’s expression of opinion. Contributing to the argument involves a detailed review of auditing concepts and broadening the understanding and educating the stakeholders on the essence of auditing. In this consideration, the study employed an exploratory research approach, reviewed related materials, journals, and periodicals in the field of auditing and financial accounting. The outcome of the review showed that Auditing concepts are specific and inclusive. Auditors are guided by these concepts and standards set out by the international standards on auditing. While these concepts are valid, there are divergences and misconceptions of what stakeholders expect from the audited financial statements. The study recommended that stakeholders require audit education and understand the essence of auditors’ reporting dilemma of regulated auditing guidelines or go beyond the auditing standards to please the stakeholders’ expectations.
Highlights
The complexities and intricacies in interpreting auditing reports and problems in meeting diverse expectations of various stakeholders are quite challenging and multidimensional
Nigerian legal framework is found in the Companies and Allied Matter Act (CAMA) of 2004; Institute of Chartered Accountants Act of 1965; Financial Reporting Council of Nigeria (FRCN); the Audit Act, and other that regulate financial service providers: Banks and other Financial Institutions Act of 1991, Security and Exchange Commission’s Act 2007; (ii) Ethical regulation is another auditing regulation, as auditors are mandatorily ethically guided by audit regulatory bodies of the Institute of Chartered Accountants of Nigeria and International Federation of Accountants, which regulate all practising chartered accountants’ ethical conduct; (iii) Asides from the legal and ethical regulations, Okpala (2015) declared auditors are under professional auditing regulation
Stakeholder theory is accredited to Edward Freeman, who states that any identifiable group or individual who can affect an organisation’s objectives or is affected by the achievement of an organisation’s objectives is a stakeholder (Freeman & Reed, 1987)
Summary
The complexities and intricacies in interpreting auditing reports and problems in meeting diverse expectations of various stakeholders are quite challenging and multidimensional. The perceptions of shareholders and other stakeholders of what auditing concepts entail are quite challenging This concern informed the motivation to investigate auditing concepts as there are divergences in perceptions and meanings of auditing concepts worldwide. Auditing standards provide comprehensive conceptual guidelines regulated and moderated to serve as models and prototypical for all statutory auditors These guidelines are relatively regulated to ensure uniformity and strict compliance in meeting minimum audit quality. The face of auditing is changing in meeting stakeholder’s expectations from the traditional auditing to a new landscape that should address the case of detection and reporting of misstatements, fraud and due consideration of establishing the going concern and economic health status of clients for the consumption of the shareholders and other stakeholders
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