COOPERATE GOVERNANCE AND FRAUD MANAGEMENT, THE ROLE OF EXTERNAL AUDITOR PUBLIC QUOTED COMPANY IN NIGERIA
(THE CASE STUDY OF CARBURY NIGERIA LIMITED)
ABSTRACT
The rising spate of fraud in public quoted company has assumed an enormous dimension. This development has eroded public trust in financial statements. Auditors in their duty to expressing professional opinion on the truth and fairness of financials are ostensibly bedeviled with quantum of challenges which could result in the issuance of a clean bill of health to corruption-riddled establishments. It is against this background that this paper critically examines the challenges corruption poses to auditors and audit reporting, and proffers formidable cures to ameliorate the Achilles heels and to redeem the auditing profession from impeding collapse. This called for the need for this study and the purpose of this study therefore is to identify the causes of fraud, measure its impact and identify means of controlling it. The study is a survey research and questionnaire was used for the collection of primary data while libraries, journals, write-ups, seminar papers and books by popular authors were used for secondary data. The findings show that poor management, inexperienced personnel, overstretching, job rotation, poor remuneration, frustration, poor book-keeping, inadequate training, communication gap and poor leadership skills are the greatest causes of fraud in the ruralby external auditors in public quoted company in nigeria. It was concluded that adequate internal control systems should be put in place and that workers satisfaction and comfort should be taken care off.
CHAPTER ONE
1.0                                                                                                          INTRODUCTION
1.1 BACKGROUND TO THE STUDY
In our society where the business culture has been overridden in recent times with fraudulent practices penetrated by management and employees, the lack of clear understanding of the duties of an auditor in relation to fraud detection has often led to unjustifiable criticisms of his role. Auditors are known to be competent, honest and independent professionals who express unbiased opinion on the truth and fairness of the financial statement as presented by management to members of the company. The accounting profession has over the years built a reputation, which encourages others to rely upon the opinions auditors express. If these opinions are unclear or even unreliable, serious consequences may and indeed have resulted.
That an auditor has the responsibility for the prevention, detection and reporting of fraud, other illegal acts and errors is one of the most controversial issues in auditing, and has been one of the most frequently debated areas amongst auditors, politicians, media, regulators and the public (Gay et al 1997). This debate has been especially highlighted by the collapse of both small and big corporations across the globe.
There seems presently to be a misconception that auditors’ duties are largely the preventing, detecting and reporting of fraud, for example, Idris (2009). The aim of this paper is to identify financial report users’ perceptions of the extent of fraud in Nigeria, and to determine their perceptions of the auditor’s responsibilities in detecting fraud and the performance of related audit procedures. The paper also aims to ascertain whether the report users’ perceptions of auditors’ responsibilities on fraud are consistent with those of the auditing profession as expressed in auditing standards in Nigeria.
 
1.2 PROBLEM STATEMENT
Fraud is one of the numerous enemies of the business world today. It is in all works of life; in government, the export trade, shipping transactions, Carbury Nigeria Limiteding, insurance and everywhere. Special organizations have been formed to combat it and Interpol deals with it at the international level, but it has not and cannot be eradicated.
Fraud is a universal phenomenon which has been in existence for so long. Its magnitude cannot be known for sure, because much of it is undiscovered or undetected and not all that is detected is published. It is known facts that no area of Carbury Nigeria Limiteding system is immune to fraudsters not even the security team designed to prevent it. Its management has become a central point in Carbury Nigeria Limiteding like the management of risk because of the above facts. Fraud is a major challenge to the entire business world, no company is immune to it and it is in all facets of life (Olorunsegun, 2010). The Carbury Nigeria Limiteding public expects accountability, fairness, transparency and effective intermediation from industries. The industries are expected to ensure that they carry out their responsibilities with sincerity of purpose which is devoid of fraudulent practices. This is relevant if the Carbury Nigeria Limiteding sector is to gain public trust and goodwill.
Fraud in the ruralby external auditors in public quoted company in Nigeria before recapitalization efforts, was at an alarming rate. It has caused many industries to collapse, and many investors and depositors funds were trapped in and indeed, many industries are still suffering as a result of these fraudulent activities. Infact it has prevented many industries from achieving their goals and many businesses has gone into liquidation as a result. Honestly speaking it has become a cankerworm that has eaten deep into the financial sector of the Nigerian economy and millions of NigerianCedis has been lost to fraudsters through these activities. It is these problems that has necessitated this research
 1.3                                                                                         RESEARCH OBJECTIVES
The main aim of this study is to find a practical means of minimizing the incidences of fraud in industries, while specific objectives are to:
1.Identify various means employed in defrauding industries by external auditors.
2.Determine the level of involvement of industries staff in fraudulent activities
3.Ascertain the factors which encourage staff involvement in fraudulent activities
4.Determine the effects of fraud on Carbury Nigeria Limitedoperations.
5.Suggest measures adapted by external auditor on reducing the incidence of Carbury Nigeria Limited fraud.
RESEARCH HYPOTHESES
The following hypotheses seek to answer the research questions:
1.Ho: There is no significant relationship between the role of the auditor and fraud detection in selected firms in Nigeria
2.Ho: There is no significant relationship between fraud detection and audit of the financial statement in selected firms in Nigeria.
3.Ho: There is no relationship between the qualification and experience of the auditors and fraud diction in selected firms in Nigeria
1.5SIGNIFICANCE OF THE STUDY
This study aims at finding practical means of minimizing the incidence of fraud by external auditors in by external auditors in public quoted company in Nigeria. During the course of the investigation efforts were made to identify various means employed in defrauding industries and at the same time determine the effects of fraud on the public quoted company in Nigeria. Findings revealed that so many factors contributed to incidence of fraud in the industries amongst which are
i.Poor management of policies and procedures by Auditors
ii.Inadequate working conditions for External auditors
iii.Carbury Nigeria Limited staff and auditors  staying longer on a particular job
iv.Carbury Nigeria Limited staff and auditors  feeling frustrated as a result of poor remunerations.
1.6 SCOPE OF THE STUDY
In understanding this work, two types of data were relied upon, namely primary and secondary. On the primary data, structured questionnaire were designed and constructed to gather information in realizing the objectives of the research. For secondary data, the researchers relied mostly on archival materials, internal records of industries, publications of Carbury Nigeria Limited staff and seminar papers.
Because fraud happens in so many institutions and thus making the scope very broad, the study was limited to Carbury Nigeria Limited. The instrument adopted for this study was the questionnaire. The questionnaires were designed for all the staff members of Carbury Nigeria Limited. Hence, the respondents were selected from Carbury Nigeria Limited in the study area totaling One Hundred and Seventy-eight (178) although, Nigeria presently. However, in this study the researcher looked into the eight (8) branches of the Carbury Nigeria Limited that are located in the Nigeria. The entire Carbury Nigeria Limited branches in the study area were selected in order to have good representation, that is, the researchers are of the opinion that those branches can serve as a reasonable representation of the Carbury Nigeria Limited as the same operating policies govern every branch.