This research work investigates investment decision
as an analysis of the impact of qualified audit report using evidence from
Nigeria. The problem associated with investment decision with recourse to the
impact of qualified audit report can not be over emphasized. The broad
objective of the study is to find out whether qualified audit report have a
significant effect on share price of listed companies in the Nigeria Stock
Exchange (NSE). The auditing process is completed with the drafting of the
auditors opinion through an audit report prepared and signed by the auditor.
The primary source of data collection was used and the survey method was used
to gathered data from the respondents through the administration of
questionnaire using a sample size of 30 for effective study. The findings
revealed that it was discovered that it is the basic duty of the auditors to
verify whether the company financial statement shows a true and fair view of
the position of the company. The study recommends amongst others that the
duties of the directors as regard the preparation of financial statement should
be spelt out and any other relevant matter relating to the director in the
engagement letter so as to enable both the directors and the auditor to be
aware of their respective duties.
TABLE OF CONTENTS
of Contents vi
Background to the Study 1
Statement of Problem 3
Research Questions 4
Objectives of the Study 4
Statement of Hypotheses 5
Significance of the Study 5
Scope of the Study 6
Limitations of the Study 7
Definition of Terms 8
Chapter Two: Review of
Related Literature 10
Frame Work 11
Chapter Three: Research
Method and Design 24
Research Design 24
Description of Population of the Study 24
Sample Size 25
Sampling Techniques 25
Sources of Data Collection 25
Method of Data Presentation 26
Method of Data Analysis 26
Chapter Four: Data
Presentation, Analysis and Hypotheses
Presentation of Data 28
Data Analysis 29
Hypotheses Testing 41
Chapter Five: Summary
of Findings, Conclusion and
Summary of Findings 46
Background to the Study
A company financial statements
present managers, investors, creditors and general user with the company’s
financial status. It should therefore be ensure that data shown in financial
statement are actual and provide all necessary information. As such corporate
financial statement is subjected to audit by external and independent auditors.
report is a media of communication between auditor and financial statement
users; it show the most important part of auditors activity and expenses the
result of financial statement assessment to users (Salehi & Abedini, 2008).
auditing process is completed with the drafting of the auditors opinion through
an audit report prepared and signed by the auditor. In this report, auditors
describe the finding of the audit and express their view on the true and fair
condition of the company’s financial status through its published financial
statement yet, the importance attributed by investors to those report and their
contents is rather questionable and require further examination.
considerable reason for demanding auditing is expected effects on decision
making and demanding for audit services is generated by many causes including
the expecting gap between the financial statement user and preparer’s (Salehi, 2007;
Salehi & Azary, 2008); the conflict of interest between kinds of financial
statements users (Salehi, 2007); the complicated economic environment and
effect of the financial on decision making.
because the audit report is the medium of communication between the auditor and
the users of the audit report, this report must be understandable, objective
and accepted by the users as a relevant source of information.
importance of audit reports is significant and the weight placed on the
informational content is substantial. Many researchers examined audit report as
part of their field of research both at a theoretical and empirical level.
Studies have been performed not only in Africa and Europe but also in US,
Australia and within the continuously growing auditing market of China. However
result includes certain contradiction. This aim of this research is to examine
the impact of audit reports that have been issued and published for companies,
on the share prices, fluctuation at the Nigeria Stock Exchange (NSE) during the
period under review.
1.2 Statement of Problem
problem associated with investment decision with recourse to the impact of
qualified audit report can not be over emphasized.
for auditing process and valve of audit report motivated in conducting the
study. Since auditing is mandatory, researchers have debated over its
importance and necessity. Nowadays, there is a wide criticism of the audit
profession within the context of business and audit failures; the a1ve of the
audit report continues to be scrutinized. However effort will be made to
proffer solution to any.
following will be answered in the course of this research study.
Does the qualified audit report have a
significant effort of share price of listed companies in Nigeria Stock Exchange
Is there a relationship between
investment decision and qualified audit report?
Objective of the Study
main objective of this study is to investigate investment decision as an
analysis of the impact of qualified audit report using evidence from Nigeria.
The sub-objectives are;
to find out whether qualified audit
report have a significant effect on share price of listed companies in the
Nigeria Stock Exchange (NSE),
to find out whether there is
relationship between investment decision and qualified audit report.
Statement of Hypotheses
study is based on the following hypothesis formulated which will be tested
based on the information from structured Questionnaires.
HO: Qualified audit report
does not have a significant effect on share price of listed companies in
Qualified audit report has a
significant effect on share price of listed companies in Nigeria.
HO: There is no relationship between investment
decision and qualified audit report.
HI: There is no
relationship between investment decision and qualified audit report.
Significance of the Study
significance of the study originates from the importance of relevant
information for the process of decision making. If the audit report has no
information content, there is no need for the audit process. Therefore, this
study is expected to be of importance to the
of Financial Statements: Audit profession, investors,
creditors and other users, as it is expected to provide them with useful
information about the value of the audit report and the audit process. In
particular, it is expected that the study will be very beneficial to the users
of the financial statement in Nigeria as a result of the increasing demand
therefore audit services and the increasing expectation from auditors.
Investors, shareholders and other
interested persons to appreciate the importance of financial statement analysis
about investment, disinvestment and asset management.
researchers: It will be a source of
information and reference material to other researchers both in business
enterprises and institution.
Scope of the Study
scope of this research is to study the perspective of interested parts as
regard companies with a qualified audit report. A geographical region of Benin
City was used. Using a time frame of 5 years i.e. from 2011 to 2015 (both years
inclusive), a sample size of 30 was used for effective result.
Limitations of the Study
following were some of the limitation faced by the researcher as the
researchers cannot be regarded as perfect and complete in all its
1. Unavailability of some vital material
required for the researcher and the authority to give out information. Auditors
by their peculiar nature considered all their dealing and information as
and are very highly sensitive to their affairs.
The condition under which the project
itself was carried out along side with normal academic program constitute a
The library facilities were
inadequate, however the researcher made enormous effort to use library facilities
available in the polytechnic and also the in.: net.
Financial resources is another major
constrain which the researcher has to cope with
is a systematic process of objectively obtaining an evaluating evidence regarding
assertions about economic actions and events to ascertain the degree of
correspondence criteria and communicating he results to interested users.
Report: This is a report issued by an auditor of a company
at the end of an audit assignment in which he expresses an opinion whether or
not the financial statement present a true and fair view of the company
financial statement at the end of the year under review.
Statement: This determine whether the overall
financial statement present fairly in accordance with the established criteria.
This involves an enquiring into facts behind the books and accounts on
technical financial and economical position of business.
Audit Report: This is a report arising from the
inability of the auditor to form an opinion on the account prepared show a true
and fair view of the statement of the company.
control is the whole
system of control, financial and otherwise established by the management in order
to carry on the business of the enterprise in an orderly and efficient manner,
ensure adherence to management policies, safeguard the assets and secure as far
as possible the completeness and accuracy of the records.