THE ROLE OF AUDITORS WITH THEIR CLIENTS AND THIRD PARTIES

CHAPTER ONE

1.0   INTRODUTION

1.1   BACKGROUND OF THE STUDY

        A series of companies acts and decree commencing in 1844 due to the full amount of debt of the companies so that they will meet the needs and the account should subject to examination by independent people who claim to be expert, i.e. auditors, who report the result of their findings to the shareholders and consequently to their parties.

        The auditor should have a recognize qualification as a mark of competence. Before (1948) act, auditors even public companies required no external professional qualifications.

        The companies Decree of 1967, 1968 and companies and allied matters decree CAMD of 1990, in Nigeria have however moved steadily towards a stipulated that auditors of all limited companies should be professionally qualified.

        This is done through a professional in Nigeria called institute of chartered accountants of Nigeria (ICAN). Progress in auditing has been measured by the institute during the past away decades in terms of development.

This is quite natural and should continue since such abilities are needed in Nigeria business but this form of progress should no longer more initiative skills a lack of which has become alarming evident of late and such skills can only flourish in a situation of late of time independence.

        In the country, in the early days of auditing the prime qualification for the position of auditors was reputation. A man of integrity and independence of mind would be sought for this honoured position, the matters of the technical ability being entirely secondary and consequently his function in those days was never confused with that of an accountant.

        However, as accountancy in the country gradually become more complex and concerned with technically become increasingly dependent upon the expertise provide by the accountants until eventually the audit function itself become totally dominated by the accounting profession.

1.1           STATEMENT OF THE STUDY

        The ICAN in 1961 issued its first statement on auditing which is referred to as UI. General principle of auditing. These statements tend to outline what is considered as an applicable general principle to be followed in the conduct of auditing. This have been subsequently withdraw may be for the reasons of inadequacy some of the relevant ones currently in uses are:

1. V7 – Verification of debtors balance confirmation by direct communication.
2. V9 – Attendance of stock taking
3. V11 – Stock in trade and working progress
4. V14 – Internal control is a computer based accounting system
5. V15 – The auditor computer based accounting system auditing standard and guideline publication starts in 1980 by the auditing practice committee. It consist of the following : –
6. As explanatory forward: this describes the basic principle and practices which members are expected to follow in the conduct of an audit.
7. Auditing failure: auditing failures by members to observe this standard may result an enquiry by appropriate committee of the institute and which may lead to disciplinary action against an erring member.

1.2   AIMS AND OBJECTIVE OF THE STUDY

        The main objectives of this research work are to look into the roles of auditors with their clients and third party. This project is design to enlighten the public that the work done by the qualified verification of financial statement. Auditors need to exercise duty of care to the client and third parties.

Also, the independence of an auditor is also important is this issue and this shows that work of professional auditor can not be over emphasis in every sector.

        In such situations, auditors, their clients and third party generally seek ways to resolve their disagreements.

1.3   SIGNIFICANCE OF THE STUDY

        The study would increase the stock of professional auditors in terms of know ledge and professional skills on how to relate and operate with their clients and third party. The study would also serve as a useful reference material to students of accountancy and future research would find this work valuable.