External Auditor Unethical Financial Reporting on Corporate Business Failure in Nigeria
Ehichioya, O. Glory
Department of Accounting and Finance
College of Management and Social Sciences
Samuel Adegboyega University, Ogwa
E-mail:ehichioyaglory@yahoo.com
INTRODUCTION
Financial reports serve as avenue for managers to give accounts of their stewardship to shareholders and other stakeholder, which are expected to present fair and truth reflection of the financial position of an organization as at the time of preparation and presentation. The reports are expected to influence the decision making process of a diversity of interest groups including, shareholders, employees, suppliers, creditors, financial analysts, stockbrokers, management, and government agencies – with timely and reliable information useful for making prudent, effective and efficient decisions. In order to overcome the problem of credibility, integrity and transparency of financial statements, an auditor who is an independent of the management is appointed to investigate the information in the financial statements and report his findings to the shareholders (Millichamp, 2010). In performing this role, the auditor fosters the trust of the public and encourages them to believe that the financial statements are true and fair (Sikka, 2009). However, following numerous cases of corporate crisis, scandal and failures, some of which were linked to the negligence or unethical financial reports of the auditors, the public confidence in the financial statements has long been eroded and this have led to the auditing profession once again in the lime light as a result of several business failures. These failures have brought up a lot of public discourse which results to increased demands for ethical values within the auditing profession.
