AN EVALUATION OF USERS’ PERCEPTION OF AUDIT SERVICE QUALITY AND FINANCIAL STATEMENTS IN NIGERIA

AN EVALUATION OF USERS’ PERCEPTION OF AUDIT SERVICE QUALITY AND FINANCIAL STATEMENTS IN NIGERIA

 

ABSTRACT

This study focuses on evaluation of the effects of audit service quality on users’ credibility perception of audited financial statements and their use for economic decision -making in Nigeria. The analysis of data collected by way of opinions survey of auditees, investors and lenders revealed that post-audit reports of fraud in organisations and the general notion that audit was a mere annual routine to comply with statutory requirements had led to awareness by users of financial statements, of audit service quality differences among audit firms. The resultant consequence was the discriminatory selection and engagement of qualitydifferentiated audit firms by auditee qouted companies which patronize money and capital markets, using audit firm size, reputation, competence, independence etc as quality service surrogates. It is also noted that investors and lenders preferred and perceived as more credible financial statements audited by such quality -differentiated audit firms for use in economic decisionmaking. It concludes by suggesting inter-alia, closer monitoring of public accounting firms for quality standard and annual peer review of audit firms as a basis of renewal of practising licence; encouragement of large partnership and engagement of small audit firms by big quoted companies to afford them the experience, growth and financial strength with which to achieve independence and competence necessary for quality service. iv Many thanks to my brother-in-Islam Al-Sayyidi Mashood Salaudeen whose path I toed unregrettably in both academics and faith. I am also grateful to my friend and colleague Dr. Edward Ola Olowokere whose contribution, assistance and encouragement helped in unmeasurable way to the completion of this research work. My regards also go to my wife Rahmat Funmilayo and my daughter Bola Bilikis for their love, patience and understanding during my absence for academic pursuit. Finally, praise be to Allah the most High for sparing my life to complete this dissertation.

TABLE OF CONTENT

Title page- – – – – – – – – i
Approval page – – – – – – – -ii
Dedication – – – – – – – – -iii
Acknowledgement – – – – – – – -iv
Abstract – – – – – – – – – -v
Table of content – – – – – – – -vi

CHAPTER ONE
INTRODUCTION – – – – – – – -1
1.0 Background of the study – – – – -1
1.1 Statement of the problem – – – – -5
1.2 Purpose of the study – – – – – -6
1.3 Significance of the study – – – – -8
1.4 Research questions – – – – – -9
1.5 Scope of the study – – – – – – -10

CHAPTER TWO

LITERATURE REVIEW – – – – – – -11

CHAPTER THREE

Research methodology – – – – – – -39
Design of study – – – – – – – -40

CHAPTER FOUR

Presentation, analysis and interpretation of data – -48

CHAPTER FIVE

Summary of findings – – – – – – -60
Conclusion – – – – – – – – -61
Recommendations – – – – – – – -62
Suggestions for further research – – – – -64
References – – – – – – – – -65
Appendix I – – – – — – – – -68
Questionnaire. – – – – – – – -69

AN EVALUATION OF USERS’ PERCEPTION OF AUDIT SERVICE QUALITY AND FINANCIAL STATEMENTS IN NIGERIA

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