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  • ItemOpen Access
    Financial Derivatives And The Development Of Nigerian Banks
    (Department of Accounting, Faculty Of Administration, Nasarawa State University, Keffi, 2011-09-12) Iyere, Samuel Iheonkhan; Samuel, Tende
    Financial derivatives have grown rapidly in recent years in developed economy due to improvements in computer technology, innovations in financial theory, and the need to manage risks arising from volatility in the interest and currency exchange rates. Derivatives are increasingly being used to manage various kinds of risk exposure, to obtain desirable financing, and to enhance investment and speculative opportunities. This paper examines the role offinancial derivatives in the development of Nigerian banks. It successively sketches the main features of financial derivatives and the related regulatory issues. We find that development of financial derivatives is justified in Nigeria by volatility in output, prices, currency, exchange rates, interest rates and inflation. The use of derivatives by Nigeria banks would provide avenue to new products and thus reduce tension, unhealthy competition and inefficiency in pricing as is currently the case with the sourcing of deposits. In addition, the sooner the Nigerian banks understand and trade derivatives, the sooner Nigeria will emerge as an international financial centre representing the African region. The complexities of the derivatives markets are increasing every day, and it is important for the policy makers and regulators to understand these markets before embarking on it. The paper recommends for use by supervisory authorities and banks the set of guidelines formulated by Basle Committee on Banking Supervision on the sound risk management of derivatives activities '. In addition, the paper recommends that derivates should be accounted for in accordance with International Financial and Reporting Standard (IFRS).
  • ItemOpen Access
    Effects Of External Reserves On Macro Economic Stability Of Nigeria
    (Department of Accounting, Faculty Of Administration, Nasarawa State University, Keffi, 2019-06-11) Iyere, Samuel Iheonkhan; Kolawole, Mudasiru Ibrahim
    The need to account for the effect of external reserves has generated a lot of argument around the world as to where it is necessary for nation to account for external reserve or not. Thus study examines the effect of external reserves on the macro-economic stability of Nigeria. For the period of thirty-two years from 1985 to 2017. The dependent variables were GDP, Exchange rate, inflation rate and unemployment rate while the independent variable is the external reserves. The ordinary least squares was used to analyse the data, and the results showed that the external reserves have effect on unemployment rate, inflation rate, exchange rate and GDP. Therefore the study concludes that external reserves have effect on Macro- economic stability of Nigeria. The study recommends among others that the Federal Government should diversity her revenue base to Agriculture, Hospitality and tourism sectors among other sectors in order to remain stable even when there is financial and economic crisis around the world.
  • ItemOpen Access
    Comparative Analysis Of Statement Of Accounting Standard, International Financial Reporting Standard And Usa Generally Accepted Accounting Principles (GAAP) On Up Stream Operations.
    (Department of Accounting, Faculty Of Administration, Nasarawa State University, Keffi, 2011-05-10) Iyere, Samuel Iheonkhan; Barnabas, Abayomi Samuel; Ogohi, Joel
    This paper examines the gaps that exist between the accounting standard issued by International Accounting Standard Board: International Financial Reporting Standard 6 (Exploration For and evaluation of Mineral resources) and Nigeria Accounting Standard Board: Statement of accounting Standard 14 (Accounting in The Petroleum Industry-Upstream Activities) The International Accounting Standards Board (IASB) in pursuit of it objective to help preparers of financial statements, throughout the world, produce and present high quality, transparent and comparable financial information have made great efforts in ensuring that national accounting standards converge to the international standards. In complying with this move, Nigerian publicly listed companies and significant public interest entities are required to adopt International Financial Reporting Standards (IFRS) in 2012. All other public interest entities will adopt IFRS in 2013. In doing this, a comparative study of the two standards was carried out and benchmark with US GAAP. It was discovered that gaps with wide reaching implications existed between the two standards. It was also found too that Statement of accounting Standard 14 has much similarity with US GAAP. It is recommended that there should be a comprehensive review of the current International Financial Reporting Standard 6 (Exploration For and evaluation of Mineral resources) to accommodate the provisions of SAS 14 and US GAAP to make the convergence acceptable.
  • ItemOpen Access
    Responsiveness of Capital Market Performance to Foreign Direct Investment in Nigeria, 1985-2019
    (Department of Accounting, Faculty Of Administration, Nasarawa State University, Keffi, 2019-12-09) Iyere, Samuel Iheonkhan; Agu, Bertram O.; Ntiedo, Joshua
    The broad objectives of this study was to examine the responsiveness of capital market performance to foreign direct investment in Nigeria, 1985-2019. Specifically the study sought to measure the impact of foreign direct investment on total market capitalization in Nigeria, investigate the effect of foreign direct investment on stock market value in Nigeria, determine impact of foreign direct investment on all share index in Nigeria, evaluate the causal relationship existing between foreign direct investment and total market capitalization in Nigeria and to find out the direction of causality existing between foreign direct investment and stock market value. The study adopted multiple regression analysis. The result of OLS reveals that foreign direct investment impacted positively but not significantly on total market capitalization in Nigeria, foreign direct investment affected positively but not significantly on stock market value in Nigeria. Analysis of pair wise granger causality result reveals that there is no causality existing between foreign direct investment and total market capitalization in Nigeria. Unidirectional causality existed between foreign direct investment and all share indexes in Nigeria. Bidirectional causality existed between foreign direct investment and stock market value in Nigeria. The study recommended that the nexus between foreign direct investment and capital market performance are needed to be effectively harnessed by eliminating investments bottleneck in Nigeria.
  • ItemOpen Access
    Effect Of Audit Commitee On Auditor Independence Of Listed Deposit Money Banks In Nigeria
    (Department of Accounting, Faculty Of Administration, Nasarawa State University, Keffi, 2019-06-08) Iyere, Samuel Iheonkhan; Ntiedo, Joshua; Uyagu, David Benjamin
    An assessment of the effect of audit committee on auditor independence of listed firms has been a long standing issue and previous findings remain controversial because of the mixed results that were found. Consequently, this study assessed the effects of audit committee on auditor independence of listed deposit money banks in Nigeria. The study had a population of fifteen (15) listed deposit money banks and a sample size of nine (9) banks was arrived at based on two criteria that only the listed deposit money banks with data over the period of the study and those banks that have not changed their names over time were considered. Secondary method of data collection was used in gathering data from the sampled banks and it was analysed using Ordinary Least Square regression technique. The findings revealed that audit committee size had positive and significant effect on auditor independence of listed deposit money banks in Nigeria while qualification of board members had negative and insignificant effect on auditor independence of listed deposit money banks in Nigeria. The study recommended inter alia that the audit committee size and board composition of listed deposit money banks in Nigeria should be increased to enhance auditor independence of listed deposit money banks in Nigeria. Also, number of meeting frequency should be increased to enhance auditor independence of listed deposit money banks in Nigeria.
  • ItemOpen Access
    Tax Payers Education And Tax Compliance Of The Informal Sector In Bayelsa State
    (Department of Accounting, Faculty Of Administration, Nasarawa State University, Keffi, 2022-06-07) Iyere, Samuel Iheonkhan; Imo, Thankgod Obutor
    The aim of this study is to establish the effect of tax education on tax compliance among the informal sector in Bayelsa State. This was achieved through a review of literature and the formulation of hypotheses. This study adopted the survey research design in the course of gathering data and the population consisted of one hundred and thirty-five (135) Small and Medium Enterprises (SMEs) in Yenagoa. Considering the large size of the population, a sample of one hundred and one (101) SMEs was determined using the Taro Yamene sample size function. Thereafter, simple random sampling technique was adopted in choosing the respondents. The primary method of data collection through the administration of structured questionnaire was used in this study. The questionnaire was however, successfully tested for validity and reliability. Descriptive statistics such as frequencies and percentages were used to summarize the data generated while a correlational analysis was performed to determine the effect of tax education on tax compliance. The result of our analysis shows that that 75% of tax payers get useful information on tax through TV stations and other electronic media; 68.48% respondents get useful information on tax through newspapers and other print media It was gathered that electronic tax education has a positive and significant relationship with tax compliance among the informal sector in Bayelsa State; print media tax education has a negative and insignificant relationship with tax compliance among the informal sector in Bayelsa State; and stakeholders' sensitization programme has a positive and insignificant relationship with tax compliance among the informal sector in Bayelsa State. It was therefore recommended that tax authority should: maximize the use of electronic media to educate tax payers in order to increase tax compliance; improve on its use of newspapers and other print media in enlightening tax payers for more positive tax compliance level; create more awareness to tax payers particular among the informal sector through sensitization programmes to increase the level of tax compliance; pay attention to tax education and other factors that may influence the willingness of citizens to pay tax and improve on them thereby making people to be willing to pay tax; and improve on any medium they use to communicate to tax payers to increase their tax compliance level.
  • ItemOpen Access
    Effect of External Audit on Accountability and Transparency of Listed Deposit Money Banks in Federal Capital Territory, Abuja
    (Department of Accounting, Faculty Of Administration, Nasarawa State University, Keffi, 2020-03-03) Iyere, Samuel Iheonkhan; Benjamin, David Uyagu
    Accountability and transparency remain a veritable means of building trust in any organization for the purpose of building and growing a modern day economy. This study investigated the effect of external audit on accountability and transparency of listed deposit money banks in FCT, Abuja. The study had a population of 120 and a sample size of 92 which was arrived at using Taro Yamane sampling model. Data gathered using questionnaires administered to the respondents and was analysed using multiple regression technique. The findings revealed that professional competence and application of international auditing standards had positive and significant effect accountability and transparency of listed deposit money banks operating in FCT Abuja.It was recommended amongst others that managers of listed deposit money banks in FCT Abuja should ensure that the external auditors apply international auditing standards in the engagement and use personal that have professional competence in order to boost accountability and transparency of their activities.
  • ItemOpen Access
    Casualization Of Employment And Increase In Reported Cases Of Fraud In Insured Banks Of Nigeria
    (Department of Accounting, Faculty Of Administration, Nasarawa State University, Keffi, 2012-09-02) Iyere, Samuel Iheonkhan; Barnabas, Abayomi Samuel
    The paper examines the relationship between casualization of employment and increase in reported cases of fraud in insured banks of Nigeria. The population consists of 24 insured banks in Nigeria as at 31st December, 2009. The sample consists of the entire population. The data used were obtained from the annual reports of Nigeria Deposit Insurance Corporation from 2003 to 2009. Panel data for 2003 to 2009 were collected for the analysis. Pearson Product Moment Correlation Coefficient, a parametric tool was employed in the analysis. The analysis reveals a strong positive relationship between casualization of employment and increased in reported cases of fraud in insured banks of Nigeria. It is not statistically significant at 5% but significant at 10%. It can be concluded that there is a strong positive relationship between casualization of employment and increase in fraud in insured bank. It is recommended that insured banks should strengthen their internal control, security and risk management systems to reduce the incidence of frauds and forgeries. Insured banks should also thoroughly screen prospective employees by obtaining status reports from previous employers and relevant agen'cies and to desist from deploying casual staff to sensitive positions. There is also need to carry out cost benefit analysis of casualization of employment in order to ensure that the perceived reduction in labour cost is not offset by increase in fraud loss exposure.
  • ItemOpen Access
    Auditing Education And The Audit Expectation Gap Problem In Nigeria.
    (Department of Accounting, Faculty Of Administration, Nasarawa State University, Keffi, 2019-06-02) Iyere, Samuel Iheonkhan; J.o, Ame; Ugoh, Timothy Terver
    Auditing as a corporate governance mechanism has been commissioned to resolve the problem of information asymmetry between corporate managers and shareholders by providing independent audit reports as to the truth and fairness or otherwise of the state of affairs of corporate concerns. Over the years however, the credibility of such reports has been called to question as a result of well publicized and spectacular corporate scandals and Auditors subsequent involvement in these scandals. This has exacerbated the Audit Expectation Gap Problem. Solving this problem require effective action to eliminate or at least reduce the gap. This study examined the relationship between auditing education and the audit expectation gap problem in Nigeria. A descriptive survey research design was adopted and a sample of 296 stakeholders consisting of investors, bankers, auditors and stock brokers within Abuja metropolis were considered for the purpose of data collection using a four point likert scale questionnaire. The study aligned with the role conflict theory. Result using pearson correlation coefficient indicated that auditing education has a significant relationship with the audit expectation gap in Nigeria. It was concluded that educating the public is a veritable way of narrowing the AEG in Nigeria. The study recommended that the audit profession should evolve a simplified and broad based strategy for educating users of financial statements on the basic functions of external audit.
  • ItemOpen Access
    IMPACT OF FINANCIAL INCLUSION ON FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA
    (Department of Accounting, Nasarawa State University Keffi, 2018-01-01) Ismaila, Olotu Abdullahi; Abubakar, Garba Razaq; Hassan, Ibrahim; Abdulkarim, Shaibu Alhassan
    This study examines impact of financial inclusion on financial performance of Deposit Money Banks (DMBs) in Nigeria. The Study measures financial inclusion with Micro, Small and Medium Enterprises (MSMEs) Financial, Rural Financial, Number of branches of DMBs, Pricing and Usage of Banking services, while financial performance (FP) is measured with return on assets. The study utilizes expose facto research design and data were collected from secondary sources obtained from the Central Bank of Nigeria (CBN) Statistical Bulletins and Financial reports of the National Deposit Insurance Corporation (NDIC) for the period of 1982-2016. Ordinary least square regression model, with the aid of Autoregressive Distributed Lag Error Correction Method, was used to analyze the data. The stationarity property of the time series variables were found to be stationary at levels and first difference. The study finds that MSMEs financing has a significant positive impact on financial performance DMBs in Nigeria. while rural financing, Pricing of Banking services, number of bank branches and usage of banking services have no significant impact on the financial performance of DMBs in Nigeria. The study concludes that MSMEs financing as measures of financial inclusion improves financial performance of deposit money banks in Nigeria. The Study recommends that DMBs should increase the amount of loan and advances given to MSMEs as this will strengthen financial performance of DMBs in Nigeria. CBN and NDIC should also encourage DMBs through their regulatory and supervisory functions to give priority to SMEs financing in Nigeria.
  • ItemOpen Access
    RELATIONSHIP BETWEEN EXTERNAL DEBT FINANCING AND ECONOMIC GROWTH: EVIDENCE FROM AFRICA’S TOP FOUR ECONOMIES
    (Department of Accounting Nasarawa State University Keffi., 2014-11-11) Yahaya, Onipe Adabenege
    The World Financial Crisis in 2008 witnessed an episode of high accumulation of external debt among the crisis-hit countries, namely Nigeria, South Africa, Egypt and Algeria. This leads to the issue of the role played by external debt in stimulating the economies oj Africa s top four economies. This paper examines the relations between external debt and economic growth of Africa's top four countries. The results demonstrate that external debt is positively related to economic growth of the Africa's top four countries. In addition, the accumulation of external debt is positively associated with Nigeria ’s and Algeria's economic growth up to an optimal level, beyond the optimal level the external debt has inversely contributed to the economy.
  • ItemOpen Access
    DETERMINANTS OF LENDING BEHAVIOUR OF QUOTED DEPOSIT MONEY BANKS IN NIGERIA
    (Department of Accounting, Nasarawa State University Keffi, 2019-06-10) Bello, Mohammed; Ismaila, Olotu Abdullahi; Bashir, Taiwo Wasiu
    Granting loans and advance for the borrower is the main activity that generates income for banks highly. Therefore, loan portfolio is typically the largest asset and source of revenue for banks. This study examines the determinants of lending behavior of quoted DMBs in Nigeria. The study employs descriptive and causal research designs using panel data of ten years (2009-2018) to examine the effect of independent variables (volume of deposits, bank size, nonperforming loans, lending interest rate) on the dependent variable (loans and advances). The population of the study is the 15 quoted Deposit Money Banks (DMBs) in Nigeria as at December, 2015. Then, a non- probability method in form of judgmental/purposive sampling technique was employed. The study utilizes secondary data from banks ’ annual reports, CBN Bulletin and the Nigeria Stock Exchange Market Fact Book. Panel regression was used and it was found that, nonperforming loans is negatively related to lending growth. It is also found that, lending interest rate has negative but insignificant effect on lending behavior. Furthermore, a significant positive effect of firm size on bank lending was found. Finally, the study found insignificant positive effect of customers ’ deposits on lending growth. Based on the findings of the study, the study recommends among others that, stringent control mechanism should be put in place to reduce the extent of nonperforming loans in banks.
  • ItemOpen Access
    DETERMINANT OF QUALITY OF IFRS COMPLIANCE LEVEL OF LISTED FINANCIAL SERVICE FIRMS IN NIGERIA
    (Department Of Accounting, Faculty Of Administration, Nasarawa State University, Keffi., 2020-07-09) Ismaila, Olotu Abdullahi; Garba, Abdul; Hassan, Ibrahim
    This paper examines the factors that determine the quality of IFRS compliance among listed financial service firms in Nigeria. The study employs quantitative research design and sourced data from secondary sources using annual reports and accounts. The period of study is from 2012 to 2018 financial years. Disclosure items were adopted from IAS 1 and Likert scale were used to score the quality of compliance while six possible factors were utilised as determinants. The study estimates regression equation using OSL estimation and the result reveals that audit quality, profitability, liquidity and foreign ownership have significant positive relationship whereas age and leverage have negative influence on the quality of IFRSs compliance among the sampled financial services sector in Nigeria. Hence, the study recommends that these factors should be given adequate attention by FRCN, CBN, SEC and other regulatory bodies in ensuring the IFRSs compliance among the listed firms in the country.
  • ItemOpen Access
    Effect of Working Capital Management on Market Value of Quoted Food and Beverages Manufacturing Firms in Nigeria
    (Department Of Accounting, Faculty Of Administration, Nasarawa State University, Keffi., 2020-10-01) Ismaila, Olotu Abdullahi; Udenwa, Theresa; Okoli, Theresa
    The success of a firm relies ultimately on its ability to generate cash receipt more than disbursement. Hence, business survival depends largely on its ability to manage its resources most especially its working capital, which are cash an other related short term assets. Therefore, this study examined the effect of working capital management on market value of quoted food and beverages manufacturing firms in Nigeria. Working capital management is proxied by cash conversion cycle, current ratio and quick ratio as independent variables while market value is proxied by market capitalization as dependent variable. Ten years period was covered in the study from 2008 to 2017. Descriptive research design was adopted in the study and multiple regression analysis was used to ascertain the effect of working capital management on firm market value. The result revealed that cash conversion cycle has a negative significant effect on market value offoo and beverages manufacturing firms in Nigeria. Current ratio has a positive but insignificant effect on market capitalization and quick ratio has a positive insignificant effect on market capitalization of food and beverages companies in Nigeria. The study concludes that an increase in cash conversion cycle will reduce market capitalization of food and beverages manufacturing firms in Nigeria. The study therefore recommends that food and beverages firms in Nigeria should reduce their conversion cycle in order to generate more profit since it has a negative significant effect on market value.
  • ItemOpen Access
    Effects Of Management Control System On Goal Congruence Of Selected Banks In Nigeria
    (Department Of Accounting, Faculty Of Administration, Nasarawa State University, Keffi., 2016-12-01) Ismaila, Olotu Abdullahi; Ahmed, Baba Ibrahim; Musa, Hassan; Abdullahi, Musa Abdullahi; Abdullahi, Dauda
    Non-alignment of employee's goal with that of an organisation could seriously affect the performance level of the organisation. While previous studies focused on the effects of management control on performance, it is argued that there are many factors that influence the performance of an organization; thus, an organization that performs well does not necessarily imply that there is goal congruence. This study used data collected from five deposit money Banks to examine the effects of management control measures on goal congruence. The result of the analysis using ordinary least square regression shows that, the management control measures of the Banks, adopting the behavioural approach, have significant effects on the level of goal congmence. The study therefore recommends that the Banks should continue to place high premium on behavioural approach to management control system, while the use of punishments should be discouraged.
  • ItemOpen Access
    Ownership Structure And Financial Reporting Quality Of Quoted Insurance Companies In Nigeria
    (Department Of Accounting, Faculty Of Administration, Nasarawa State University, Keffi., 2015-12-02) Ismaila, Olotu Abdullahi
    This paper examines the relationship betvween ownership structure and financial reporting quality of quoted insurance companies in Nigeria. The aim of the paper is to analyse whether ownership structure of quoted insurance companies in Nigeria reduces or improve financial reporting quality. The period covered by the study is 2004-2013. The study used multiple regression as tool of analysis. Using the Modified Dechow and Dichev Model as a measure of Financial 'Reporting Quality, the results revealed that the relationship between ownership structure (managerial ownership, institutional ownership and block ownership) is positive and is statististically significant. This signifies that ownership structure of insurance companies have the tendency of improving the quality of financial reporting. The study recommends that the existing structure should be encouraged and strengthened by regulatory agencies
  • ItemOpen Access
    IMPACT OF TAX REVENUES ON ECONOMIC GROWTH IN NIGERIA: A TIME SERIES ANALYSIS
    (Department Of Accounting, Faculty Of Administration, Nasarawa State University, Keffi., 2015-03-03) Ismaila, Olotu Abdullahi; Musa, Hassan
    This study examines the impact of tax revenue on the growth of Nigeria. The study covers the period of 20year, 1994 to 20/4. I he data were collected from the annual financial report of the Central Bank of Nigeria and the Federal Inland Revenue Services (FIRS). The data were analysed using descriptive statistic and regression analysis. The result of the analysis indicates that there is a significant positive relationship between tax revenue and economic growth. 7 he extent of the relationship is up to 79%. Again, Company Income Tax (CIT), Petroleum Profit Tax (PPT) and Value Added Tax all have significant impact on gross domestic product. It is recommended that government should diversify, carry out reforms and strengthen its sources of Tax revenue. This can be done by providing enabling business environment e.g. provision of business infrastructures like electricity, good road and security. This will encourage more companies to come up and the existing companies will generate rnore profit thereby increasing tax revenue which will lead to more economic growth.
  • ItemOpen Access
    FIRM CHARACTERISTICS AND FORWARD LOOKING INFORMATION DISCLOSURE: THE CASE OF QUOTED DEPOSIT MONEY BANKS IN NIGERIA
    (Department Of Accounting, Faculty Of Administration, Nasarawa State University, Keffi., 2014-09-02) Ismaila, Olotu Abdullahi; Bala, Ali Yusuf
    The focus of this paper is on assessing forward-looking information in annual report and accounts of listed Deposit Money Banks in Nigeria and empirically exploring the firm characteristics that affect the extent of forward-looking information (FLI) disclosed. A disclosure index composition consisting of 35 forward-looking information items is used to investigate the level of forward-looking information in annual report of DMBs listed on Nigeria Stock Exchange for the year 2012. Using content analysis the study found weak FLI disclosure by DMBs. A multiple regression analysis was used to explore the relationship between FLI and four main variables (Bank size, performance, leverage and liquidity). The results show that bank size and leverage have positive but insignificant association with the level of forward-looking information disclosure. Conversely, bank performance and liquidity are found to be negatively insignificant in explaining the level of forward-looking information. There is the need to increase the level of FLI disclosure considering its impact on decision making by various users of corporate reports.
  • ItemOpen Access
    Corporate Attributes and Internet Financial Reporting By Deposit Money Banks In Nigeria
    (Department of Accounting, Nasarawa State University, Keffi., 2017-06-01) Ismaila, Olotu Abdullahi; Musa, Inuwa Fodio; Hassan, Musa
    The advent of the internet has brought succor not just to the way businesses around the world are being conducted but also to the way corporations disseminate information to stakeholders. This study assesses the relationship between corporate attributes and internet financial reporting (IFR) practice by quoted Deposit Money Banks (DMBs) in Nigeria. The study used ex-post facto research design. The population of the study comprises of the 15 banks quoted on the firsttier securities market of the Nigerian Stock Exchange as at the December 2015 and these constitute the sample of the study. Web search engines were used to establish internet presence of each bank and the study used IFR Disclosure as proxy for IFR. Corporate attributes (size, liquidity, auditor type and profitability) were regressed against the IFR disclosure index to examine the extent to which they determine IFR. Results show that the relationship between IFR and bank size, bank liquidity is positive and statistically significant which implies that IFR practice is determined by size and liquidity of DMBs. The study noted that IFR is still a voluntary practice that is yet to be regulated. It therefore recommends that IFR should be encouraged and regulated to improve information disclosure and dissemination to wider stakeholders and users of financial reports. Keywords: Internet Financial Reporting, Firm Size, Liquidity, Profitability, Auditor Type.
  • ItemOpen Access
    Auditors' Report And Investor Confidence In The Nigerian Capital Market :
    (Department of Accounting, Nasarawa State University, Keffi., 2011-12-06) Ismaila, Olotu Abdullahi; Abdullahi, Danjuma Zubairu
    This study examines at the relationship between auditor’s report and investor confidence in the Nigerian Capital Market. The study was promoted by the spate of corporate scandals around the globe particularly the recent Cadbury case that led to loss of investments by shareholders, having in mind the role played by the auditors of the affected companies. The objective of the study is to find out whether or not auditor’s report has significant relationship with investor confidence in our capital market. The period covered by the study is eight years (2000-2007). The population of the study consists of 135 companies (excluding banks and insurance companies due to the model adopted), whose shares are quoted on the first tier of the Nigerian Stock Exchange (NSE) on or before January 2000. The companies are grouped into strata, based on the industrial grouping of the NSE, and Stratified random sampling was used to select 34 companies. To test the hypothesis of the study, market capitalization was used as proxy for investor’s confidence, and audit quality index for auditor's report. Stationarity properties of the time series data were first empirically investigated by the Augmented Dickey Fuller (ADF) test which showed that all the variable (market capitalization) is stationary. Ordinary Least Square Regression was used to establish relationship between investor confidence and auditor's report. The study finds that auditor’s report is positively related to investor confidence in the Nigerian Capital Market. In addition, there is variability in the pattern of auditor’s report. The study recommends that the quality of audit needs to be strengthen to consolidate confidence of investors in corporate audit vis-a-viz our capital market. This can be achieved by strict adherence and compliance with set standards and ethics. Erring auditors should be banned from auditing financial statements of companies quoted on the Nigerian Stock Exchange. Regulators (SEC and NSE) should strengthen measures to protect investors thereby improving confidence in the Capital Market.