Auditors’ Role and Practice of Corporate Governance: An Imperative for Nigerian Banks

Abstract

The increasing rate of accounting scandals has steered up discourse on the practice of good corporate governance. The banking industry participates in financial intermediation by bringing together both the surplus and deficit units of the economy thus accentuating the relevance of good corporate governance practice. Variables such as the independence, objectivity and integrity of the auditor are identified. This paper looks at the practice of good corporate governance in the banking industry. A field survey based on stratified sampling technique was used in the execution of the study. Four hypotheses were tested using the chi square non parametric test on data obtained from the field survey. The major findings are that banking institutions design their own codes of corporate governance based on the SEC and CBN codes and the independence, objectivity and integrity enhances the external auditors’ role in ensuring the accountability function of corporate governance in the Nigerian Banking industry. The major recommendations are that the banking industry should set up a Shareholder’s Investors’ Grievance Committee and the external auditors should also issue a certificate of compliance with corporate governance requirements.

Keywords: Corporate Governance, Auditors role, Nigerian Banking Industry

JEL Classification: G34, M42