Quality Accounting Service a Panacea to Effective Corporate Governance

Abstract

The separation of ownership and controllership was the foundation of the agency theory, which was popularized by Foma and Jensen in 1983. The current result of metamorphosis of the agency theory is corporate governance. Corporate governance became an issue for the first time when the East Asia crises started in 1997, which led to the collapse of the Thais, Indonesian, South Korean, Malaysian and Philippines economies. The problems of corporate governance became magnified when the well celebrated American corporate crises occurred in 2001-2002. This led to the collapse of two big and world-class companies: Enron and World Com., which invariably led to the collapse of firms like Author Andersen and Global Crossing. The effectiveness of corporate governance of an establishment often depends on the effectiveness and efficiency of its control mechanisms, reliability of its financial reports and disclosure, the compliance with relevant regulations and the integrity of the Board. In view of this, the role of professional accountants is comprehensively examined in anchoring these elements. This paper concludes by making recommendations that can enhance the effectiveness of corporate governance in Nigeria.