HAZARDS OF AUDITING, AN ANALYSIS OF THE JOB OF AN AUDITOR AND ITS INHERENT PROBLEMS, DANGERS AND DIFFICULTIES.
ABSTRACT
The inherent problems, dangers and difficulties is one of the felonies of which an auditor should take care of, in order to achieve a set objective of an organization.  The auditors’ roles and procedures are the yardstick through which the obstacles affecting an organization cab be tackled.  This research work is aimed at informing the management on how the problem of frauds, its prevention and detection of frauds as well as other irregularities could be curbed within and organization.  It also emphasized on the duty and responsibilities or an auditor in carrying out an appropriate application of the audit procedures necessary to enable the expression of an opinion on the accounts under examination.However, this work will be of immense help to users such as shareholders, debenture holders, creditors and other to know what exactly an auditor is expected to do.  It will as well be of great assistance to individuals to know who an auditor is.  This study is presented in five chapters.Chapter one covered the introduction into the work.  Literature review is found in chapter two.  Research methodology is found in chapter three.  Chapter four deals with data presentation and analysis, finally, chapter five deals with summary of findings, recommendation and conclusion.
TABLE OF CONTENTS
Chapter One
Introduction                                                                                                    
1.1              Statement of the problem                                                       
1.2              Objectives of the study                                                           
1.3              Significance of the study                                                        
1.4              Scope and limitations of the study                             
1.5              Statement of hypotheses                                                         
Chapter Two
Literature Review                                                                                           
2.1              Definitions of Auditing                                                                      
2.2              The Origins of Auditing                                                                     
2.3              The role of Auditing in society                                                           
2.4              Position of Auditor under the CAMD 1990                          
2.5              The objectives of an audit                                                       
2.6              Secondary objective (Discretionary)                                       
2.7              Qualifications and qualities of an Audit                                 
2.8              The Problems, difficulties ad hazards of auditing                  
2.9              Auditors Liability                                                                               
2.10          Auditors independence                                                                       
2.11          Auditors limitations                                                                
Chapter Three
Research Methodology                                                                                   
3.1              Sources of data                                                           
3.1.1        Primary sources of data                                              
3.1.2        Secondary sources of data                              
3.2              Questionnaire design and interview structure            
3.3              Analytical tools used                                      
3.4              Validity and reliability of measuring instrument                    
3.5              Determination of the sample size.                                           
Chapter Four
Data Presentation and Analysis                                                          
4.1              Questionnaire Information Presentation and Analysis           
4.2              Interviews conducted                                                             
4.3              Test of hypothesis                                                                               
Chapter Five
Summary of findings, recommendation                                             
5.1              And conclusion                                                                                   
5.2              Summary of findings                                                              
5.3              Recommendations                                                                              
5.4              Conclusion                                                                                          
Bibliography                                                                           
Appendices                                                                                         
CHAPTER ONE
INTRODUCTION
This study aims at ascertaining the hazards of auditing and investigations, and analysis of the job of an auditor and its inherent problems, dangers and difficulties.
Accounting is an old profession; records of business transactions have been prepared for centuries.  However, it was only during the last half century that accounting as a profession was accepted with the same importance as the medical and legal profession.
Since the turn of 19th century, the accounting has grown tremendously all over the world.  In fact, during the first sixty years of 20th century major economic and social forces have thrusted the profession to new frontier and responsibility.
The factors contributing to this growth are the increase in number of large corporate businesses in coupled with its size and complexity.  Government influence in the affairs of business through its taxation and regulation are also factors contributing to the growth of the profession.
It stands to say, there is the need to sanitize the profession, which keeps and records the transactions of business/organizations.
This can be done through auditing by a qualified person acknowledged by the law.  In other words, auditing is carried out by an auditor to give a true and fair view of a business entity so that third parties can rely on them to take decisions.  Nevertheless, there is a statutory requirement that all registered limited liability companies must have their financial records audited annually by a firm of Chartered Accountants so appointed.
The auditor is a professional person who offers his services and those of his employees to companies, which need their services.  Such services among others include auditing, investigations, tax and other consultancies.  The auditor exercises his duty with skill care and diligence but must offer his integrity and reputation to the public who relies on this judgment and opinion.  The auditor thus employs diligence on carrying out his duty so as to meet the needs of his/her client in order to given and independent and honest opinion of financial representation of business entity.
Finally, for the purpose of emphasis, in summary, auditing is the life wire or every business entity and consequently the whole national economy in that third the distribution of the size n > 30 can be used to represent the population of the sample.
Bearing in mind that my research topic “Hazard of Auditing, analysis of the job of an auditor and its inherent problems, dangers and difficulties” strictly concerns auditing matter hence my using exclusively some chartered accountants “(accounting) firms as against using the whole system.
Parties that get inaccurate financial information are bound to make wrong decisions and plans which will result to “National doom” but if otherwise, the reverse will be the case.
1.1              STATEMENT OF THE PROBLEM
One of the problems under investigation lingers on the age-long argument that it is the duty of auditors to detect fraudulent act, which to a great extent is not true.  The public generally believes that one a company has been audited, then it is fool proof to mismanagement, fraud, etc.  An example is concerning the failed banks tribunal inaugurated by late Abacha’s administration.  The tribunal of recent (1995 – 1996) has been able to unearth loopholes in some banks undertakings even when it is on record that their accounts and report had regularly been audited.
Striking compromise between public expectations especially from shareholders and prospective ones.  The legal and professional code of conduct expected of them poses a difficulty which the auditor faces when carryout his work.
According to American Accounting Association (1996) accounting is defined as the art of recording, classifying, summarizing and presentation of transactions in a significant manner in terms of money.  This is not fully observed by the accountant or person responsible for such an accounting work.
In such cases the work of the auditor would not be two easy, as opinion finally expressed would not exclusively be objective though he may qualify it in his report.  This indeed is a problem only to the auditor and third parties who rely on the report.
In other words, difficulties are experienced by the auditor when carrying out his compliance and substantive tests on the organization under investigation.
The final problem is, to what extent can an auditor be chargeable for negligence when discharging the fiduciary duty imposed on him by subsection (1) of section 367 of Companies and Allied Matters Decree 1990 as amended up to date.
1.2              OBJECTIVE F THE STUDY
The purpose of this research is to understand the roles of auditor and auditing, and to make useful recommendations where necessary towards the improvement of these roles as it affects statutory audits.
The objective of this research is therefore listed under the following headings.
(a)      Position of auditors under Company and Allied Matters Decree 1990 and other regulatory bodies.
(b)      Since the different users make use of financial statement to take decisions, hence this study will look into the role of the external auditor informing an opinion.
(c)      Critically and dangers or auditing.
(d)     Generally, the researcher aims at arousing interest on the conceived problems, hazards and difficulties faced by the profession and proffers ways of reducing them to the barest minimum.
1.3              SIGNIFICANCE OF THE STUDY
The importance of accounting profession can be defined in relation to its role as information supplier.  The information supplied can be said to be authentic and objective if only an independent professional person called an auditor forms his opinion on it.
Therefore, this work will in part be of immense help to users such as shareholders, debenture holders, creditors and others to know what exactly an auditor is expected to do.  I mean those that make use of financial statement of a company including the management team.
In addition, this project will be of great assistance to individuals (including accounting student) to know who an auditor is and the dangers, difficulties being faced by them when carrying out their duties and responsibilities.  Furthermore, this work will be of great assistance to all those who may wish to carry out further study on the said project topic.
1.4              STATEMENT OF HYPOTHESIS
These hypotheses are postulated with a view to confirming them or disapproving them.
H1:       (a)        All auditors are aware of the implications of the        auditors’ liabilities.
(b)        There are inherent problems, dangers and difficulties in auditing.
(c)        Auditing has played significant role in Nigeria economy.
H0:       (a)        All auditors are not aware of the implications of the auditors’ liabilities.
(b)   There are no inherent problems, dangers and difficulties in auditing and investigation.
(c)    Auditing has not played significant role in Nigeria economy.
Alternative hypothesis:           Hypothesis accepted.
Null hypothesis:          Hypothesis accepted to disapprove a claim.