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Management of crisis The response of the auditing profession in Nigeria to the challenge to its legitimacy

Management of crisis The response of the auditing profession in Nigeria to the challenge to its... The recent collapse of Enron and revelations of unethical behaviour by members of the board of large corporations in the USA have reopened the debate about the credibility of the auditing profession and their usefulness in establishing confidence in the capital markets. In the case of Nigeria, the promulgation of the Companies and Allied Matters Act No. 1 in 1990 provided the opportunity for the government to register its dissatisfaction with the performance of auditors in Nigeria. The act contained provisions that challenged the credibility of the accounting profession in Nigeria and almost threatened its very existence. This paper examines events and environmental factors which led to the “crisis of confidence” and how the profession has attempted to re‐establish public confidence in its members. Other developments in the regulatory framework for accounting and auditing in Nigeria are also examined. The paper suggests that any response by the profession must be relevant and give due cognisance to the peculiarity of the Nigerian socio‐economic, political and cultural environments. It also suggests that the accounting profession in Nigeria must not rest on its oars, but must constantly remain proactive by keeping abreast of developments in the internal and the external reporting environments and respond appropriately. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting, Auditing & Accountability Journal Emerald Publishing

Management of crisis The response of the auditing profession in Nigeria to the challenge to its legitimacy

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Publisher
Emerald Publishing
Copyright
Copyright © 2004 Emerald Group Publishing Limited. All rights reserved.
ISSN
0951-3574
DOI
10.1108/09513570410567782
Publisher site
See Article on Publisher Site

Abstract

The recent collapse of Enron and revelations of unethical behaviour by members of the board of large corporations in the USA have reopened the debate about the credibility of the auditing profession and their usefulness in establishing confidence in the capital markets. In the case of Nigeria, the promulgation of the Companies and Allied Matters Act No. 1 in 1990 provided the opportunity for the government to register its dissatisfaction with the performance of auditors in Nigeria. The act contained provisions that challenged the credibility of the accounting profession in Nigeria and almost threatened its very existence. This paper examines events and environmental factors which led to the “crisis of confidence” and how the profession has attempted to re‐establish public confidence in its members. Other developments in the regulatory framework for accounting and auditing in Nigeria are also examined. The paper suggests that any response by the profession must be relevant and give due cognisance to the peculiarity of the Nigerian socio‐economic, political and cultural environments. It also suggests that the accounting profession in Nigeria must not rest on its oars, but must constantly remain proactive by keeping abreast of developments in the internal and the external reporting environments and respond appropriately.

Journal

Accounting, Auditing & Accountability JournalEmerald Publishing

Published: Dec 1, 2004

Keywords: Auditing; Regulation; Nigeria

References