Wednesday, 22 January 2014

THE ROLE OF AUDITORS IN THE NIGERIA BANKING INDUSTRY (A CASE STUDY OF UNION BANK PLC)


CHAPTER ONE
INTRODUCTION


1.1    BACKGROUND OF THE STUDY
Banking industries in Nigeria have over the year experienced a remarkable growth and expansion that the traditional approach of business management is no longer adequate to meet the heavily bordered company management in maintaining control over the wide spread operations. The increase in regular activities, the trend towards decentralization and greater geographical dispersion have in themselves posed serious challenge to management control. When this is added, the fact that in any representation of financial information or in the operation of internal activities, individual could be guilty of self-interest, carelessness, and dishonesty. There is the need for an outstanding performance for all levels of management, these new problem have made it necessary    for management to delegate responsibilities and authority to many level of supervision. However management responsibilities does not end with these allocation of duties, management has to turn to a control specialist, (Auditor) for assistance in ~maintaining a close watch over the management control network. Without auditors guide, management could not rely of financial statement as a guide in making any decision and the auditor (external) cannot rely on the internal control system without greatly increasing his test and the extent of his auditing procedure.
The role of auditors incorporate generally studying the efficiency of functions within the organization which includes financial checks, operational accounting, evaluation and reviewing of the system of internal control. The auditors appraise financial and control periodically summarises the results of continuous investigations, prepare recommendations for better procedure and report the results of his findings to top management says A.W. HONES and W.S. OVERMYER auditing standard and procedure page (3) three.
The auditors, both external and internal auditors performs the same functions except that external auditors performs their investigation on periodic basis usually once or twice in a year. The regulatory examination is done by Central Banks and business activities to ensure that banks conforms with the lay down central ~banks banking guidelines.
The objectives of auditing as stated in the company and allied decree (CAMD) 1990 is to express on opinion as to the truth and fairness of the financial statement as presented by the companies. The reason why and to prevent and detect fraud in banking industries and its implication for auditor is bone of public contention in the country today, this is why as academician and concerned citizens of this country, the researcher has taken it as a challenge to make it cleared to the public that roles of auditors in a banking industries in order to settle the misconceptions of the public in regards to auditors roles.

1.2   HISTORICAL BACKGROUND OF UNION BANK NIG. PLC
Banks as an institution of wealth and financial intermediary has remained a vital part of the world economy to a single economic units. However, Union Bank of Nigeria Pie is established as a commercial bank to carryout its operations as it is defined by Section 4(1) of the banking amendment Act No.3 of 1970. The origin of Union Bank Nigeria Plc can be traced as far back as 1916 when it was initially started as colonial Bank. These colonial banks are the banks which has been in existence in West India, so 1916 they extended their services to Nigeria with the first branch in Lagos and Zaria. Later on these colonial bank witness the change in name known as Baclay Bank (D.C.B) (Dominion Colonial Bank).
Union Bank Plc actually commence their operation in Nigeria in 1917 as a branch of Baclays bank which was incorporated then as private limited liability company in Nigeria in 1969. In 1970 the bank was converted to public liability company (PLC). Union Bank Plc toady in Nigeria due to their efficiency and effective operation is known as strong and reliable bank. The company’s shares are quoted in the Nigeria Stock Exchange.
The aim of establishing this bank was to bridge the gap between the surplus and the needy that’s those that will deposit and those that are looking for money to borrow from bank to invest in one business or the other.
Union bank spread its branch network to cover almost everywhere in the country to serve people at their doorstep. lit also has branch at London and has a representative at South Africa, and also started operation in Maiduguri in 1976.
The bank has various department which include the loans and advance department, inter Nigeria transfer department, Accounting department, Selling department, Current domiciliary Account department, treasury department and other subsidiaries as well as international banking department.
1.3   STATEMENT OF THE PROBLEM
The fact that in any representation of financial information or in the operation of internal control system activities in a banking industries today, individual has been found guilty of one problem or the other which always leads to fraud or mismanagement in bank. This event might be due to:

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