Enhancing accountability and transparency in corporate organisations through audit independence
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Enhancing accountability and transparency in corporate organisations through audit independence
INTRODUCTION TO CHAPTER ONE
1.1. Background Of The Study
Transparency and accountability in modern corporate organisations have gotten more attention than ever before. Because of recent financial crises and corporate scandals, it has been a topic of discussion and empirical investigation in both developed and developing countries around the world.
Greater openness and accountability are thought to improve company performance through improved resource allocation, increased efficiency, and increased growth prospects (Chipwa, 2005).
Improving corporate governance procedures requires increasing transparency and accountability. Essentially, transparency is a critical means of improving corporate performance and responsibility (Katra, 2003). Transparency is regarded as essential for an accountability culture, particularly in markets where competition is fierce (Katera, 2003).
This implies that those with an interest in the corporate organisation must have access to all relevant and material information about its operations in order to make sound judgements and, if necessary, take appropriate action.
This is only achievable if people in charge of the day-to-day management of the corporate organisation are sufficiently transparent and accountable.
This is based on the idea that managing the affairs of corporate organisations is a fast-paced undertaking in an ever-changing market or business environment. The importance of transparency and accountability, particularly in Nigeria as a developing country, cannot be overstated.
In this regard, Katera (2003) contends that the key to corporate survival, wealth creation, and preservation is based primarily on systems of transparency and accountability embedded into the governance structures of such businesses.
As a result, there is a need or desire to improve transparency and accountability in order to maximise shareholder value and the overall success of the corporate organisation.
Against this backdrop, this study focuses on improving accountability and transparency in Nigerian corporate organisations.
1.2. Statement of the Research Problem
Transparency and accountability in businesses are becoming more topical, broadly relevant, but also under-researched (Chipwa, 2005). Despite existing company law,
which includes a statutory framework and standards that control corporate activities, a lack of or insufficient openness and accountability encased in sound corporate governance practises has contributed to organisational failures (Katera, 2003).
To the best of our knowledge, there are few books in Nigeria that deal extensively with transparency and accountability in corporate organisations. Similarly, to the best of our knowledge, the elements improving transparency and accountability in corporate organisations in Nigeria have received minimal empirical research. The following research questions are raised in light of the existing gap.
1.3. Objectives of The Study
This study’s aims are divided into two categories: general objectives and particular objectives. The overall goal is to improve openness and accountability in corporate organisations. However, the study’s particular aims are as follows:
To determine whether the audit committee improves transparency and accountability in business organisations.
To assess if board independence improves corporate openness and accountability.
To determine if corporate ownership concentration improves openness and accountability.
1.4. Determine the scope of the research
This research focuses on improving corporate transparency and accountability. The study goes on to look at the factors that improve openness and accountability in the Nigerian banking system. The listed banks with operations in Benin City are analysed using a standardised questionnaire in order to draw conclusions.
1.5. Research Questions
Do audit committees improve transparency and accountability in corporations?.
Is board independence beneficial to corporate openness and accountability?
How can ownership concentration improve corporate transparency and accountability?
1.6. Research Hypotheses
H0: audit committees do not improve corporate openness and accountability.
H0: Board independence does not improve corporate openness and accountability.
H0: Concentration of ownership does not improve openness and accountability in corporate organisations.
1.7. Significance of the Research
The topic of this becomes essential as a result of current financial difficulties affecting corporations in both developed and developing countries such as Nigeria.
For starters, the findings of this study will be of interest to business regulators such as the federal government and the Nigerian central bank.
This is because regulations intended at making businesses or corporate organisations more transparent and responsible will assist regular investors who rely on corporate governance and financial disclosures from company management, as well as the overall development of the Nigerian economy.
Second, the audit profession will be interested in the research findings because evidence that corporate organisations are not open and accountable may indicate that auditors should be more cautious.
Third, the study’s conclusions will be useful to firm executives looking to recruit outside investment.
In Nigeria, very little academic research has been conducted on this topic. As a result, this study will contribute to the body of knowledge by enriching the literature on corporate reporting practises, transparency, and accountability of corporations.
Finally, researchers will undoubtedly find the study’s findings beneficial as reference materials in the future.
1.8. Limitations of the Research
Difficulty in obtaining appropriate, adequate, and reliable information from respondents- Respondents prefer to supply information that they believe the researcher would appreciate, which may not be accurate.
Financial constraint- Inadequate funding tends to hamper the researcher’s efficiency in locating relevant materials, literature, or information, as well as in the data collection process (questionnaire and interview).
Time constraint- The researcher will conduct this investigation alongside other academic activities. As a result, the amount of time spent on research will be reduced.
1.9. definition of Terms
An audit is an official inspection of corporate and financial documents to ensure their accuracy and completeness.
Independence: the ability to organise a firm and make business decisions.
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