CHAPTER ONE
1.1 INTRODUCTION
The need for the auditing of account for a business venture cannot be overemphasized, Even in the early 19th century, kings insisted that their steward read their account of stewardship to them orally which the kings listened to and acknowledge as having received. This was called “stewardship account”.
With the large amount of business transaction that companies these days go into, which involves a huge chunk of their resources. There is need for the accounts of such companies to be properly audited so that monies and resources may not be fraudulently mismanaged and such mismanagement swept under the carpet. This gave rise to the need for the appointment of external persons outside the companies staffs and management to look into the final account and vouchers such companies, such person must be trained accountants called Auditors.
The functions includes
According to Cook and Winle (1976), the traditional audits were meticulous, and they involved defiled review of records designed to determine whether each transaction was properly recorded in the correct account and in the amount with main objective of detecting fraud and testing the trust of persons in fiduciary positions. But modern auditing pays more attention to the efficient working off the internal control system to reduce and prevent to a large extent errors and frauds rather than detailed and massive checking (vouching) of transactions and discovering of errors.
Hence the change by the English companies Act 1948 from the true and correct view” as was formerly practiced to true and fair view” in the opinion of the auditors. This makes the auditors opinion very essential for intending investors and regulatory authorities, so the procedure for the appointment and removal of the auditors by companies should be accorded a great deal of care so not to deviate from laid down laws and also respect the intensions of the shareholders who have a stake in the decisions of the company.
Hence the change by the English companies Act 1948 from the true and correct view” as was formerly practiced to true and correct view” as was formerly practiced to true and fair view” in the opinion of the auditors. This makes the auditors opinion very essential for intending investors and regulatory authorities, so the procedure for the appointment and removal of the auditors by companies should be accorded a great deal of care so not to deviate from laid down laws and also respect the intensions of the shareholders who have a stake in the decisions of the company.
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