The financial debacles that occurred in the companies like Enron, WorldCom, and Xerox in the USA, Lehman Brothers, Polly Peck in the UK and African Petroleum Plc., Cadbury Plc., in Nigeria had created public distrust with the auditors. The era when the auditor will say 'trust me' and that being accepted is over. Now, they must earn the public trust. This study provides an empirical analysis of the scope and nature of audit expectation gap in Nigeria. We used a descriptive and survey research design to achieve the objective of the study. We also collected data through primary source, using structured questionnaire. The study used Mann-Whitney U test and Kolmogorov-Smirnov Z test for the analysis of data and test of normality of distribution, respectively. The results confirmed that audit expectation gap exists in Nigeria, and the new auditor's report did not have any serious impact in reducing the gap. From the outcome of this study, the audit expectation gap primarily arose from the unreasonable expectation of the users due to their lack of understanding of the roles of auditors. We recommend the launching of a new business-reporting model geared towards releasing more non-financial information to the public and with clear description of the role of independent audit.
Regulation and regulatory agencies are to serve as external control mechanisms to ensure that the financial statements provide a fair view of the company’s operating performance and financial position, free of any unethical practice and suitable for all stakeholders’ needs. Despite the increasing importance of regulatory agencies in enforcing compliance with the standards and laws, it occupies a limited space in accounting research. This study, therefore, investigated the impact of regulatory agencies on creative accounting practices. The study used descriptive and survey research design to achieve its aim. It employed a multi-stage sampling technique, also questionnaires were distributed among 405 respondents consisting of preparers of accounts, users of accounts, and regulators. Out of the number distributed, the respondents returned 241 copies, and all of them were found suitable. The study used Ordinary Least Squares (OLS) to analyze the data and test the hypothesis. The empirical findings showed that the regulatory agencies jointly show a significant impact on creative accounting practices, but the level of contribution to the overall impact by each regulatory agency varies. The study concludes that Nigeria’s regulatory agencies are weak and inefficient in enforcing compliance with the relevant rules. The study recommends that the institutional capacity of the regulatory agencies should be strengthened by enforcing compliance with financial reporting rules and regulation. Most of these agencies should develop capacity in the areas of manpower, information technology infrastructures, and funding. Acknowledgment The authors acknowledge Covenant University who has solely provided the platform for this research and has also fully sponsored the research cluster search for data across the country.
This study provides an empirical analysis of the impact of IFRS on profitability ratios of eleven (11) banks in Nigeria. The study addresses the research hypotheses by comparing the key profitability ratios computed under the Pre-IFRS for three year period from 2009-2011 and three year period from 2013-2015 under the Post-IFRS regime. The study used Wilcoxon Signed Rank test and Normality test as a statistical method to analyze the data. The findings revealed that IFRS adoption has not produced any meaningful impact on the profitability ratios (PAT-EBIT, NPM, and OPM) at 5% level of significance. The finding implies that the adoption of IFRS does not have significant effects on profitability ratios of listed banks in Nigeria. The study recommends that investors and financial analyst should pay particular attention to all profitability ratios under this IFRS regime. Also, investors should not base their investment decisions on banks' profitability in the short term but rather the long-term viability and performance should be taken into cognizance. This study provides original insight into the relevance of IFRS in determining the viability or otherwise of profitability ratios of listed banks in Nigeria.
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