Public Expectation Gap, External auditors and Financially distressed Banks in Nigeria

Abstract

One of the ongoing and long time grey areas in financial practice is the conflict between the external auditor and the public expectation gap, particularly in developing economies. This study examines the effect of external auditors and the public expectation on financially distressed banks in Nigeria. This study used a survey research design to get information from the primary source, and it used a well-structured questionnaire to do so. The study found that there is a large gap between what the general public expects and what auditors actually do to prevent and detect fraud. The results of the statistical cross-sectional chi-square test at 0.05 levels of significance and the test of one-way analysis of variance on the hypotheses served as the foundation for our conclusion in this study. It can be said that external auditors and the public expectation gap have a big impact on financially troubled institutions in Nigeria. The study suggests that a new corporate reporting model be implemented with the goal of increasing public access to non-financial information and clearly defining the function of independent audit.