Independent of Auditors and Ethical Behaviours in Corporate Financial Reports of Listed Companies in Nigeria

Babcock University, Department Of Accounting Ilishan Remo, Ogun State ,Odunayo, Jimoh

doi:10.47191/jefms/v5-i3-07

Babcock University, Department Of Accounting Ilishan Remo, Ogun State , Odunayo, Jimoh

Open Access

https://doi.org/10.47191/jefms/v5-i3-07

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Abstract

Acceptance of corporate financial reports has greatly reduced, and financial statement users doubt the credibility and usefulness of the information contents of corporate financial reports. Existing studies had reported inconsistences and evidenced inconclusiveness of possible effect of independent of auditors and ethical behaviour in enhancing reliability and relevance of corporate financial reports. Consequently, in extending the frontiers, the effect of independent of auditors and ethical behaviours on corporate financial reports of listed companies in Nigeria is investigated by this study. Survey research design, using self-structured questionnaire was employed by this study. The population of the study consist of all the 66 manufacturing companies, while sample size of 414 was obtained using Yaro Yamane (1976) formula. A total of 356 valid questionnaires were retrieved from the online respondents, reflecting 86% of the expected respondents. Cronbach Alpha reliability analysis. The study found that independent of auditors and ethical behaviours had a positive significant effect on corporate financial reports (AdjR2 = 0.019; F (3, 341) = 3.340; p-value = 0.019). The study concluded that independence of auditors and ethical behaviours had a positive effect on corporate financial report of listed in Nigeria. The study recommended that auditors should exercise professional independence, competence and avoid unethical practices to enhance corporate financial reports.

Highlights

The quality and reliability of corporate financial reports are being doubted and financial statement users seem sceptical and apprehensively unsure of the reliability and credibility relying on corporate financial reports in making economic and useful decisions
CONCLUSION, RECOMMENDATIONS AND CONTRIBUTION TO KNOWLEDGE 5.1 Conclusion: The study investigated the effect of independent of auditors and ethical behaviors on corporate financial reports of listed companies in Nigeria
In addressing the problem of corporate financial reports, survey research design was adopted using structured questionnaires administered to selected respondents

Summary

Introduction

The quality and reliability of corporate financial reports are being doubted and financial statement users seem sceptical and apprehensively unsure of the reliability and credibility relying on corporate financial reports in making economic and useful decisions. Reported incidents of financial scandals in some corporate organization apparently ignited the anxieties and concerns of the public of the trustworthiness of corporate financial reports and industry experts’ reaction to Arthurs Andersen and Enron scandals had remained a reference point of financial users’ discontentment over the years (Aliu, Okpanachi & Mahammed, 2018; Alnodel, 2018). While Enron and Arthur Anderson case had triggered the emergence of Sarbanes-Oxley Act of 2002, the level of dissatisfaction of the public and ability of the analysts to rely on corporate financial reports in making predictive analysis have not resolved (Amidu, Coffie & Acquah, 2019). In the recent cases of 2020, among the big-4, PwC was associated with unethical behaviour of an allegation of potential conflict of interest in one of its audit jobs functions in Sonangol as it was discovered that both the auditor and consultancy roles were carried out by the same PwC (Hrazdil & 2019). The list is endless the recklessness auditor’s ethical behaviour and extent of professional abuse of trust and unethical practices that have plugged the image of the auditing profession to a regrettable disrepute and fragility and chronicles of unexhausted

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Conclusion