THE IMPACT OF LEGAL AUDIT REQUIREMENTS ON THE AUDITORS PERFORMANCE IN NIGERIA
ABSTRACT
This study is intended to find out the impact of legal audit requirements on the auditor performance in Nigeria context specifically. The literature review described the various audit requirements in conjunction with the professional standards and how they are applied to secure the  auditor competence an independence that are vital to the auditors if they are to effectively execute their responsibilities to their clients.
The arrangement of this topic discussed in reviewing the literature was designed to support the hypothesis which form the basis of the study.
 TABLE OF CONTENT
CHAPTER ONE
INTRODUCTION
1.1              Statement of the problem
1.2              Purpose of the problem
1.3              Significance of the study
1.4              Statement of hypothesis
1.5              Scope of the study
1.6              Limitation of the study
1.7              Definition of terms     
CHAPTER TWO
Literature review
2.1             The concept of auditing and the auditors environment
2.2             Classification of auditing
CHAPTER THREE
3.0       Research design and methodology
3.1             Research design  
3.2             Survey of existing document
3.3             Questionnaires
3.4             Oral interviews
3.5             Sample design
3.6             Sources of data
3.6i     Primary data
3.6ii.   Secondary data
3.7             Statistical techniques
Chi- square test
Rank correlation
Sing test
Reliability
CHAPTER FOUR
4.0             Data presentation and analysis
4.1       Tabulation and interpretation of data form- questionnaires
4.2             Test of hypotheses
  CHAPTER FIVE
5.0       Summary of finding conclusion and recommendation
5.1             Findings
Conclusion
Recommendation
Bibliography
Appendix (questionnaires)  
 CHAPTER ONE
1.0       INTRODUCTION
“Business without auditing stifles public confidence and auditing without law is force”
(Emile wolf)
Auditing occupies a very critical position in  the business life of any society both industrialized and non industrialized countries like Nigeria and other west African countries.  This implies that auditing plays a critical and improtant role in the economic development of any nation.
This is more importance as business, which is the mainstay/ bedrock of the economy is fast growing.  It has grown beyond what may be described as “purely personal management that were common in the olden  days.  Such business establishments are small in size personally owned financed and managed by the owner.
However there is changed situation in this modern time. The hallmark of most business is no longer owners management.  The owner and financers are separate person (shareholders and investors) and controlled by outsiders (director and managers) because of the increase in size  and company of business activities. This practice is know as “stewardship” the entrails as its foundational feature that shareholders and other parties to the business will like to know how their resources entrusted in the care of management are being used to achieve the corporate aim. This is therefore done by employing the services of person’s who are professionally qualified and referred to as independent public auditors to attest on the effective utilization or otherwise of the financial resources after examining the account prepared by the management.  It was this motive that gave rise to the birth of the profession auditing with vital role and heavy responsibilities.
It would be right to stress that the down auditing era is the wake into consciousness and disciplines in business operations the quest to maintain sanctity in the conduct of business.
But to have auditing profession void of legal backing is a despicable attempt to accord the practice a persuasive influence but not authoritative status.
Auditing without the law is a force a contraction on terms. To this extent the law become a fundamental aspect of the profession and practically speaking too bears conspicuous implications.  For example in performing the attest functions problem and hardships may arise and both the law and the professional body are not silent on these effect.
It is therefore the legal prescriptions and their consequences on auditing that constitute the terms of reference of this research work. The legal framework presently applicable to auditing in Nigeria is the companies and allied matters act (CAMA) 1990. This is normal reviewed in the light of the regulatory codes issued of the authorities in auditing profession both  within and outside Nigeria.   This the investigation with expose any difficulties in the legal environment of auditing which the law can solve and suggest  ways of improving the deficiencies.
 1.1             STATEMENT OF THE PROBLEM    
In this system we shall examine the situation which exist in the Nigeria auditing scene as he basis for the problem which has been chosen for investigation. These problem are summarized below.
Auditors have been found to negate the spirit of the legal requirements for various reason which revolve around maintaining a cordial relationship  with the directors management who they are specifically appointed to check.
Comments made by some auditors made the researchers believe that the legal audit requirements especially on the areas of appointment removal of auditor to more to stile rather than enhance their independence auditors sometimes change their negative opinion so as to retain their appointments as auditors. This situation apart form as implications to the profession will mean that company financial position could be worse as the would be no pressure from uniformed shareholder and the general public to apply the corrective measures.  These seems to be lack of appreciation of the auditors roles in companies management hence the staff of companies generally see auditing  work as a disturbance to the normal running of the business which make them give only minimal co-operation to auditors.
For companies registered under the companies act there is more pressure to issue an unqualified and positive opinion on the truth and fairness of the financial statements.
In the course of audit the auditors may not feel secured to face-up-to-the unpleasant facts relating to the company.
Emotions could be aroused and objectively clouded by sentiment just to avoid stepping on the sore toes of the management.
In the view of these foregoing vitiating factors in the Nigeria auditing context the following questions are contemplated or framed.
Do the legal audit requirements apply to the practical situation of companies in Nigeria?
Do auditors comply with the legal  audit requirements in performing their duties in Nigeria?
To what extent do the legal audit requirements provision influence the auditor opinion in Nigeria.
Do auditors who comply with the legal audit prescription perform better than those who do no?
These problems will be the basis for the research questions                 
 1.2             PURPOSE OF THE STUDY
The principles purpose of this research work is to critically examine the legal audit requirements that are currently applied to the practice of auditing in Nigeria so as to ascertain the extent to which these requirements influence the auditor in the performance of their duties.
Some of the problems plaguing the practice of the profession have been identified in the proceeding section.   This study attempts to find the causes of these problems and to proffer measure that will remedy the ailing situations.
Although the research exercise is basically academic but its findings are expected to the applied by both the auditors and lawmakers          
 1.3             SIGNIFICANCE OF THE STUDY   
The Nigeria auditing practice is fraught with risks and problems. We are not unaware of the increasing case of fraud and misappropriations on the part of directors and staff of companies cases of supporting and abetting crimes as well as professional negligence arising from pressures on auditors to issue unqualified report. These circumstance led to an erosion of confidence the public at large consequent delay of the professional standard.
This significance of this study stems form the need to ameliorate or avert this worsening situation especially as there are many interested parties in the report of auditors paramount  among these interested parties is the auditor that issues the report. This research work recognized that and for the auditors to find ways of protecting themselves form the large wave of current ligitiaiton arising form   a numerous and   often cute liabilities placed on them by the shareholders or third parties. Measures will be prescribed to guide against these problem. Shareholders and the investing public are in some occasion disgruntled with the auditors certification as emotions and sentiments interfere with objectivity and sound judgment as to the truth and fairness of the financial statements which the auditors are appointed to examine. The shareholders and third parties who rely on the technical advice of the auditors will be benefited by the findings of this study government agencies that have interests in the audited accounts of various companies for various reasons including taxation and lawmaker whose interest is in the area of legal audit prescription will also have relevance to this research project.
The significance of this investigation into the impact of legal audit requirement on he auditor performance is inexhaustible and the research in doubtful believe that with all finding the stature of the auditing profession will be improved.                           
 1.4              STATEMENT OF HYPOTHESES
The aim of hypothesis is to provide a logical ground for developing the research work. The hypothesis serves or provides as possible answers to the chosen problems and further research will provide imperial basis of the acceptance or otherwise  the reception of the hypothesis.
For the purpose of this stuffy the hypothesis shall be stated under two categories:
The sub-hypothesis and the main hypothesis and each category shall comprise the null hypothesis (H0) and the alternative hypothesis (HAIR).
SUB HYPOTHESIS
H0:      There is no relationship between practical effectiveness and theoretical
Correctness as regards the efficiency of legal and it requirements in Nigeria
H1:      There is no relationship between practical effectiveness and theoretical
Correctness as regards the efficiency of legal and it requirements in Nigeria
H0:      Auditors have not been complying with the legal audit requirements in
Material aspects
H1:      Auditors have been complying with the legal audit requirements in
Material aspects
 MAIN HYPOTHESIS
The legal audit requirements in Nigeria have negative effect on the auditors performance.
The legal audit requirement in Nigeria have positives effect on the auditors performance.
 1.5             SCOPE OF THE STUDY
This research study is confined  to auditors in Nigeria.  The legal provision considered are those given by the companies and allied matters act (CAMA) 1990 questions will therefore be directed towards findings out how the auditors carryout their normal audit work as required for companies registered under the co-operate affairs commission (CAC)    
 1.6             DEFINITION OF TERMS
This provide the contractual meaning of certain terms used in the study.
Impact:         This means the effect of or influence.
Legal:            This means in accordance with or authorities by the law
Audit:            Independent examination and expression of opinion on the validity and deepened ability of financial statements prepared by management.
Legal Audit Requirement:            The provision of the law that guide the conduct of audit.
Auditors:      The accountant who performs the audit work/professional accountant (ICAN holed).
Shareholder:            The investing public who own shares in a company.
Client:  A customer to the auditor the business entity which employed the service of he auditors.  
Third Party: A person or an institution who has financial interest in out no contractual relationship with the business.
Contract:                  An agreement between two or more person which has legal backing and connotation.
Financial Statement and Account:          All the financial accounting records used by a business entity.
Limited Company: A body establishment by law in public companies composed of non executive directors and auditors for the purpose of reviewing the financial statements and audit findings recommendation of auditors and appointment and remuneration of auditors and performing other possible related functions.
Negligence:              A commission or omission in the performance of an act arising out of carelessness which a reasonable and prudent man in the circumstance would have avoided.
 Compliance Test:    Those test which seek to provide audit evidence that the internal control procedure are being applied as prescribed.
 Substantive test:     Those tests of transactions and balance and other procedure such as analytical review which seeks to provide audit evidence as to the completeness accuracy and validity of the information contained in the accounting records or in the financial statement.
 Audit risk:    This is the chance of causing damage to an audit firm as a result of giving a wrong opinion under a circumstance.
 Tort:  An act which causes harm to a determinate person. It is a breach of duty arising out of a person relation or contact and which is either contrary to the law or an omission of a specific legal duty or violation of an absolute right.
 Internal Cheek:       The allocation of authority and work in such a manner as to afford checks on the routine transaction of to day work by means of the work of one persons being prove independently by another of the work of a person being complementary to  that of another.
 Ameliorate:  To lessen the effect of something