This study examined the role of
corporate governance in organizations, and how the public confidence can be
restored in organization through financial reporting. The study aimed at
ascertaining the extent to which financial helps organizations in achieving
their corporate objective. In the course of achieving these objectives, certain
research questions were raised, which led to the adoption of three research
hypotheses. The study particularly looked
at the corporate governance in Consolidated
Breweries Nigeria Plc in Edo State. A total of 100 samples was randomly
selected from the organization and were administered questionnaire. Based on the descriptive
statistics that was carried out. The chi square test showed that audit report
significantly improved the process of corporate governance in Nigeria. It was
also confirmed that effectiveness of financial reporting significantly improves
corporate objectives. Lastly, the result showed that corporate governance help
enhance public confidence of financial reports. In the light of these findings, conclusions were drawn and recommendations given. The study strongly recommend that: the auditor being able to detect malicious
act and scandals in organizations finance, is equally able to
give recommendations for board
of the directors, the neglect of this responsibility is a matter that needed to be reversed in order to effect the firmness of corporate
governance in organizations.
TABLE OF CONTENTS
of Contents vii
of Problem 3
of the Study 3
1.6 Significance of the Study 5
of the Study 6
of the Study 6
1.9 Definition of Terms 7
Review of Related Literature
2.1 Introduction 13
2.2 The Concept of Corporate Governance 14
2.3 Synopsis on Financial
Development of Audit Report 15
Objective of Financial Reporting 17
Qualification of Auditor 21
of Auditor 22
of an Auditor 23
of an Auditor 24
2.10 Auditors Examination and Evaluation
2.12 Audit Planning
2.13 Audit Evidence 33
2.14 Obtaining Audit Evidence 34
and Distribution of the Financial
of Financial Reporting 36
of Financial Reporting 36
2.18 Reporting to Management 37
2.19 Prevention and Control of Fraud through
government issues 45
Chapter Three: Research Method and Design
3.1 Introduction 53
3.2 Research Design
of the Population of Study 54
3.4 Sample size 54
3.5 Sampling Technique 55
of Data Collection
3.7 Method of
of Data Analysis 58
Four: Data Analysis, Presentation
of Data 60
4.3 Data Analysis 65
of Hypotheses 75
Five: Summary of Findings,
5.2 Summary of Findings 82
Background of the Study
of financial reporting is one area in accounting that is recognized as the power house
of financial dealings and management: (Howard, 2002, p. 2). Financial report
constitutes the climax of all the planning and operation in the corporate
governance. The audit reputation may then depend upon the contents of its
report. In essence this implies that effectiveness of financial report is
justified only if it is able to repose confidence in the curiosity of its
to section 259 of company and Allied matters Act (CAMA) 2004, the financial
report prepared by an auditor may include “A report to it’s members the
accounts examined by them and in every bank sheet and profit and loss account,
and on all group financial statements, copies of which are to laid before the
company in a general meeting during the auditors tenure of office”
Recognizing the importance attached to the final
report, the auditing practice committee sponsored by the six major accounting
standards and guidelines have made suggestions and provided a member of example
of audit report to apply in various circumstances (Alvin, 2007).
The importance of a corporate financial report
cannot be overemphasized as the auditor may be held responsible to a great
extent of what he states or does not state as his opinion to the trueness and
fairness of company’s financial statement. And his responsibility may extend
not only to his immediate client (Milky, 2008:2).
This study seeks to ascertain how public confidence
in financial reporting can be enhanced and the implications it has on corporate
governance. It also aimed at ascertaining how it influences the decision of
external users of company’s financial statement. The external users include
shareholder’s government and potential investors.
1.2 Statement of Problem
Financial reporting cannot be considered effective
unless the report is timely provided. This may form the culmination of a great
deal of deterred work and effort over a long period and yet may be summarized in a few lines.
This study seeks to find answers to the following
Is financial reporting relevant in
Do financial reporting help organizations in achieving their corporate objective?
Does the incorporation
of corporate governance help in
building public’s confidence in financial report?
1.4 Objectives of the Study
The objective of this study is to evaluate the role of corporate
governance in enhancing public
confidence in financial report.
The research study also has the following
i. To ascertain
the relevance of financial reporting in corporate governance
determine the extent which financial reporting helps organizations in achieving their corporate objective.
iii. To find
out whether the corporate governance
help in building public’s
confidence in financial report.
For reports to have an impact in any
organization, it requires the truth of these assumptions. The impact of this
report would be examined for the purpose of conveying information, reporting,
finding, putting forward ideas and making recommendations.
Statement of Hypotheses
Hypothesis is a tentative statement
about relationship that exists between two or among many variable to prove
their validity. Therefore, the hypotheses formulated for consideration are as follows:
Ho: Financial reports have not significantly improved
the process of corporate governance in Nigeria.
reports have significantly improved the
process of corporate governance
2. Ho: Effectiveness of financial
reporting does not significantly improve
HI: Effectiveness of
reporting significantly improves
Corporate governance does not enhance public confidence of financial
HI: Corporate governance help enhance public confidence
1.6 Significance of the Study
It is expected that the findings of the,
research study in conjunction with
findings of similar research studies on the subject enhancing
public confidence in financial reporting and the implications for
corporate governance would be useful to the public and private sector.
result of this study would be to find out of the objectives of the
financial reporting one being achieved
and if these objectives have furthered the growth of the corporate
governance in Nigeria
of the Study
This study is restricted to financial
reporting in corporate governance with particular reference to Consolidated
Breweries Nigeria Pie.
The research work is designed to look
into audit report in corporate governance to have an accurate investigation of
information in different categories of workers in various department of
Consolidated Breweries Plc.
The period of coverage is between (2006-
2011) five years.
Limitation of the Study
In carrying out this study, the researcher strictly
limit him with the case study. This is
because of time constraint in
conducting the research work.
Lack of adequate finances of transportation of fathering data collection and they expanded in the case of the research work.
The computation of information used for the preparation of their research work has
not been easy. Another noticing problem
is the unwillingness of some
executive officers to give information and have a direct interview with them.
Finally, the researcher also limits himself on the role of financial
reporting and corporate governance in Nigeria as it affects
public confidence of corporate reporting.
In carrying this research the following important terms were
used and their definitions are
report: These consist of the balance sheet, profit and loss account,
sources and application of fund, value added statement five years financial summary
etc. it is the statement which communicates information about the company to
those who have a right to receive it, e.g. the shareholders, loan creditors
etc. It provides an indication of the company’s trading or operational
performance and give a fixed point, snap-short of its financial position at a
particular date (section 331 CAMA).
is a Latin word meaning to “hear” it is a process carried out by qualified
parsons called auditor on the account prepared by management of organizations,
parastatals and establishment to ensure adherence to laid down rules or policy.
The auditing standard Board defined audit as “the independent examination of
opinion on the financial statement of n enterprise by an appointed auditor in
accordance to the term of his engagement and compliance with any relevant
statutory obligation and professional requirements.
3. Audit report: This is a statement made by an
independent auditor expressing his opinion as to the true and fairness of the
financial statement examined by him and
whether or not it is in compliance with
the relevant act.
4. Internal control:
This is defined by the Auditing Standard
Board as the system of control,
financial or otherwise established by management in order to carry on the business of the enterprise or company in an orderly and efficient manner and ensuring adherence to management policies, safeguard
the asset and secure as far as possible the completeness and accuracy of records.
5. Financial institutions:
In this study shall be taken for the banks that are into commercial activities, that is commercial banks, hang branches
across the federation.
guideline: Auditing guidelines are
intended to give guideline on: (a) Procedure by which the auditing standards may
be applied. (b) The application of auditing standard to specified items
appearing in the financial statement
of enterprises. (c) The
application of auditing standards to particular sector, industries or service organizations.
(d) Other matters relating to the proper performance of audit work.
Is an all- encompassing concept that seeks to guarantee and institute credible
bedrock governance standards, in the creation of wealth, in the light of the
primacy that corporations have come to assume in privately- led economies.
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