Auditor Independence and Financial Integrity in Nigeria: An Analysis of Challenges and Implications

Amos Adejare Aderibigbe, Ibukun Olalekan Fadairo and Fasilat Iyabode Adepeju Balogun
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Amos Adejare Aderibigbe: Department of Accounting, Crescent University, Abeokuta, Ogun State, Nigeria
Ibukun Olalekan Fadairo: Federal University of Agriculture, Abeokuta, Ogun State, Nigeria
Fasilat Iyabode Adepeju Balogun: Federal University of Agriculture, Abeokuta, Ogun State, Nigeria

International Journal of Research and Innovation in Social Science, 2024, vol. 8, issue 11, 411-426

Abstract: The evolving business landscape, with complex corporate structures and global operations, poses challenges and threats to auditor independence, especially in Nigeria. Moreover, the persistent issues of financial and non-financial relationships, reliance on non-audit fees, tenure restrictions, regulatory compliance, technological advancements, and challenges occasioned by internal and external pressures, threaten financial reporting integrity. Stakeholders’ expectations, ethical dilemmas, and globalization further complicate the landscape. Consequently, it is imperative to tackle the challenges associated with financial reporting, focusing on the role of auditor independence in augmenting transparency and confidence in financial information. This study sought to comprehensively examine auditor independence’s conceptualization, maintenance, and impact on financial information reliability. Objectives include assessing dual aspects of unbiased and impartiality in scrutinizing financial records by auditors and analyzing legal implications surrounding their independence. Auditor independence ensures unbiased assessment, enhancing credibility, market stability, legal compliance, and risk mitigation. The exploratory study examined how auditor independence ensures the quality of financial reporting, utilizing secondary sources like books, journals, industry reports, and publications of regulatory and professional bodies. Achieving and maintaining independence demands, adherence to regulatory frameworks, transparent communication, professional skepticism, ethical decision-making, rotation policies, whistle-blower protection, and robust internal controls are pivotal. Reinforcing the importance of auditor independence, through stricter enforcement of audit regulations in Nigeria, will bring about trust and stakeholders’ confidence in the financial reports. The world is evolving, and there is a need for a strong ethical framework by professional bodies, with vigilance, adaptation, and professional development on the part of auditors to uphold independence, while ensuring financial reporting credibility and reliability.

Date: 2024
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