Audit Conflict Impact On Auditors Ability To Resist Management Pressure (a Case Study Of First Bank And Diamond Bank)

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cThe project deals with audit conflict its impact on auditor’s ability to resist management pressure. This study examines the effect of ethical reasoning and formal sanction on the behaviour of auditors with destiful attributes. The researcher used two source of data collection, primary and secondary data. Method of investigating, the researcher made use of various research instruments in gathering information for the research. One of the method and instrument used for data collection is the questionnaire, oral interview with directly observing the workers to ascertain their performance. First, we find a significant positive association between Machiavellianism and unethical auditor’s behaviour. In addition, we find that auditor’s unethical behaviour is significantly reduced by higher ethical reasoning abilities and increase threat of sanctions.




Title page.      .      .      .      .      .      .      .      .      .         i

Certification    .      .      .      .      .      .      .      .      .         ii

Approval page.      .      .      .      .      .      .      .      .         iii

Dedication      .      .      .      .      .      .      .      .      .         iv

Acknowledgement .      .      .      .      .      .      .      .         v

Abstract  .      .      .      .      .      .      .      .      .      .         viii

Table of contents    .      .      .      .      .      .      .      .         ix


1.1      Background of the study       .      .      .      .      .      .         1

1.2      Statement of problem    .      .      .      .      .      .         3

1.3      0bjective of the study    .      .      .      .      .      .         5

1.4      Research question  .      .      .      .      .      .      .         6

1.5      Research hypotheses     .      .      .      .      .      .         6

1.6      Significance of study      .      .      .      .      .      .         7

1.7      Scope are and limitation of study .      .      .      .         8

1.8      Definition of terms..      .      .      .      .      .      .         9

References .    .      .      .      .      .      .      .      .         12


Literature Review

2.1  concept of the study      .      .      .      .      .      .         11

2.2  Who is an Auditor   .      .      .      .      .      .      .         14

2.3  Conflict overview    .      .      .      .      .      .      .         21

2.3.1  Auditors behaviour and management pressure   .         23

2.3.2        Auditors ways of addressing management pressure in terms of conflict management  .      .      .      .         24

2.4         Audit conflicts, its impact on the auditors ability to resist   management pressure  .      .      .      .      .      .         27

2.4.1        The role of auditors    .      .      .      .      .      .         30

2.4.2        Auditors or audit report     .      .      .      .      .         32

2.5         Rights of the auditors in resisting management pressure.33

Reference.      .      .      .      .      .      .      .      .         36


Research Design and Methodology

3.1      Research design     .      .      .      .      .      .      .         37

3.2      Sources of data      .      .      .      .      .      .      .         37

3.3      Population and sampling determination.       .      .      .         39

3.4      Methods of investigation.      .      .      .      .      .         40

3.5      Method of analysis  .      .      .      .      .      .      .         41



4.1      Analysis of data      .      .      .      .      .      .      .         44

4.2      Test of hypothesis .      .      .      .      .      .      .         53


Finding Conclusion and Recommendation

5.1      Summary of finding       .      .      .      .      .      .         62

5.2      Conclusion .    .      .      .      .      .      .      .      .         63

5.3      Recommendation    .      .      .      .      .      .      .         64

Bibliography    .      .      .      .      .      .      .      .         66

Appendix I      .      .      .      .      .      .      .      .        67

Appendix II     .      .      .      .      .      .      .      .         68




The impact of auditing in any organization is of vital importance that their growth and retardation depend on it. According to Nwabueze (200:2) an audit is an independent examination of and expression of opinion of the financial statement of an enterprise by an appointed auditor in pursuance of the appointments and in compliance with any relevant law and regulation. An audit is an independent examination by an auditor of the evidence from which the final revenue account and balance sheet of an enterprise have been prepared in order to ascertain that they present a true and fair view of the summarized transaction of the period under reviewed and the financial state of the organization at the year and this enabling the auditor to report thereon. It is an investigation into books of accounts and the documents and vouchers from which the books have been written up with the object of enabling the auditor to make a report on the balance sheet or other statement prepared from books, to the person or persons to whom he has been appointed to report.

Nwabueze (200:3) further stated that an audit is an independent examination, of an organizations financial records at a given time in order to ascertain the true position of the final accounts of the institution or organization. It is imperative to state that auditing is never with hunting as some establishments tend to book at it.

This study tends to look into audit conflicts its impact on auditors ability to resist management pressure. Lugli point on this study will be guard a long time management conflict in an enterprise, organization and institution as a result of unbalanced accounting records and other form of management issues boarding on the firm for example, unretired payments, incomplete records, over pricing of products usage of organizations property without proper or adequate permission, over vouching and deliberate fraud or embezzlement of funds.

At a place where auditing is appropriate and timely, such conflicts are reduced if not nipped out the bud. The relevance of auditing as it is daily guarding momentum is over emphasized. Any company organization or agency that requires growth result as a matter of fact allow periodic auditing into its final records. Such periodic exercise will enhance efficiency reliability and dependent records with a strong financial base.

According to Onovo (2001) if the auditor is to fulfill primary objective of an audit of a financial statement which is to express on opinion on such financial statement a financial statement must be prepared within a frame of a reorganized accounting principles.

The above is referring about primary objective of auditing that boarders on efficiency timely execution of audit responsibility cost effectiveness and risk reduction and elimination timely execution of audit is very necessary in any audit inspection and equerry according to Nwabueze (2000:14) the primary objective of an audit is the critical examination of and verification of the accuracy and the truth of a statement usually a financial one by a skilled and impartial observe (the auditor.)

From the going therefore the priory objective of auditing will be defeated  if timely execution and efficiency of it conducts in relation with the above (Millichapamp (1990:24).

In the same vein the inspection or auditing of an organization records will include the following, an examination, of the book keeping accounting and internal control system with a view to ascertain whether they are appropriate for their purpose and whether they are effectively applied some other auditing functions include verification of ownership existence and valued of assets and the amount of liabilities show in the balance sheet (Aguolo 19983)



The researcher as a matter of fact is fully prepared to carry out the project titled “audit conflict: impact on auditor’s ability to resist management pressure” but in faced with a Myriad of management problems. It was not possible for those banks to release their record for inspection to external persons for project purposes. Again the management of the bank see the incidents projects as exposing their records more especially now that the EFCC (economic financial crimes commission) are after them.

       Most of the staff of the bank that are prepared to cooperate were afraid of either loosing their jobs on account of the assistance they are to give. Meanwhile the study is vital in the sense that audit conflicts as its impacts on management is an important tool to be resolved in the effectiveness on efficiency of day to day operations of an organization, eg the selected banks in particular.


The study “Audit conflicts: its impact on auditor’s ability to resist management pressure” is aimed at assessing the conflicts and associated pressure” in the management, level high point on the study include:

1.  To know the history and the development of audit.

2.  To find out the encountered problem by the auditor in resisting management pressure.

3.  To know whether the external auditor’s report are taken as seriously as they showed.

4.  To know whether the incident of frauds and irregularities have the reduced considerably in the past few years.

5.  To make recommendation on how to improve on any set back suffered by the auditor’s.

6.  Verification of accounts and statements, prepared by a client.



This will enable any student who intend to study the course in future to make use of this work both in their academic and research programmes. The recommendations in this research work will help to solve some of the problems encountered by the auditor’s since this work will be kept in the library for reference purposes. Though there is always room for improvement on this work by other researchers, it will also be useful to research student both this school and other schools.


For the purpose of this research, the following hypothesis are to be tested:

Hypothesis one

Auditor’s do not adhere to the statutory rules and regulations laid down for them in the course of doing their work.

Auditor’s adhere to the statutory rules and regulations laid down for them in the course of doing their work.

Hypothesis two

The auditors personnel are not given the necessary co-operation by workers.

The auditors personnel are given the necessary co-operation by workers.


This study will cover audit conflicts on auditors ability to resist management pressure and to extent to which these course are being addressed. The roles auditors play and the problem hindering and recommendations, are made to make them more efficient. The period under requires is restrict to 14 years that is from (1990-2004) these period are considered to be very important period in the history of Nigeria because of a lot of crisis going on in Nigeria which courses a lot of instability both socially political and economically.


Audit conflicts: This is a situation in which people or group of people working in an organization are into serious disagreement or argument over the report on financial statement and the official examination of the business.

       The impact on auditors ability to resist management pressure: This examines the effect of ethical reasoning and formal sanctions on the behavior of auditors.

       Management pressure: Management pressure may be as a result of fatigue, that is a felling of been extremely tired usually because of hard work or exercise.



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Audit Conflict Impact On Auditors Ability To Resist Management Pressure