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PROJECT TOPIC AND MATERIAL ON INVENTORY CONTROL AND ITS IMPLICATION FOR MANUFACTURING INDUSTRIES
The Project File Details
- Name: Inventory Control And Its Implication For Manufacturing Industries
- Type: PDF and MS Word (DOC)
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- Length:  Pages
According to McConomy and Bujaki, 2000), there has been a considerable debate in recent times concerning the need for strong corporate governance globally(,with countries around the world drawing up guidelines and codes of practice to strengthen governance (Cadbury, 1997, Corporate Governance Code of Nigeria, 2005). The rationale for this emphasis can be linked to increased concerns over the integrity of securities markets (International Federation ofAccountants-IFAC, 2010; Millstein, 1999).
Good corporate governance by boards of directors is recognized to influence the quality of financial reporting, which in turn has an important impact on investor confidence (Levitt, 1998 and 2000). Studies have shown that good governance reduces the adverse effects of earnings management as well as the likelihood of creative financial reporting arising from fraud or errors (Beasley, 1996; Dechow, et al., 1996; McMullen, 1996).
Traditionally, the external auditor has also played an important role in improving the credibility of financial information (Mautz and Sharaf, 1961; Wallace, 1980).
In recent times, a series of well-publicized cases of accounting improprieties in Nigeria has captured the attention of investors and regulators alike. The search for meansto ensure reliable and high financial reporting has largely focused on the structure of audit report. The auditing profession has been proactive in attempting to improve audit report by issuing standards focused on discovery and independence. As a result, there has been a concerted effort to devise ways of enhancing independence (Corporate Governance Code of Nigeria, 2005; Blue Ribbon Committee, 1999). The profession has also responded to denigrations on audit report. It emphasized that, by its nature, the inherent limitations of an audit make it impossible to eliminate the risk of audit failure (Ricchiute, 1998; IFAC, 2009). The effect of sound governance practices on the quality of financial reporting has recently received attention from researchers, particularly in the United States (McMullen, 1996; Beasley, 1996; Beasley, et al., 2000; Abbott, et al., 2000). The main focus of these studies is the relation between auditcommittees and fraudulent financial reporting, with results generally supporting a negative relation between anactive audit committee and the likelihood of a company being cited for fraudulent reporting. While these resultsprovide evidence from a strong and sophisticated capital market environment, very little research has beenconducted in countries where capital markets are less developed and where governance mechanisms are stillevolving. However, sound corporate governance practices are equally, if not more important, in countries thatare attempting to gain credibility among global investors.
This is particularly so in Nigeria as the countryattempts to regain investor confidence following widely reported financial crises
1.2 STATEMENT OF THE PROBLEM
The weakness of corporate governance has proved to be the most important factor blamed for the corporate failure consequences from the economics and corporate crises. There is much that can be done to improve the integrity of financial reporting through greater accountability, the restoration of resources devoted to audit function, and better corporate governance policies (Saudagaran, 2003). Concerns have also emerged about reduced audit report. Economist (2004) noted that there are questions about the independence of the “Big 4” and suggested that concentration is lowering the quality of audits. Therefore, our study extends and contributes to the body of research using Nigerian data to investigate the likely impact of audit report and governance related attributes.
This study is motivated by the interest surrounding the appropriateness of reforms instituted by corporate governance code in Nigeria in response to the corporate failures, global best practice and their implied efficacy in the face of significant implementation and audit report. We investigate empirically the relationship of attributes in the code in improving financial reporting quality.
1.3 OBJECTIVES OF THE STUDY
This study specifically identified the following objectives:
i. To examine if board independence affects audit report.
ii. To investigate ifnon-executive directors’ ownership affects audit
iii. To examine if executive directors’ ownership and audit report
iv. To identify the structure of the CEO/Chairmanship of companiesin Nigeria; and
v. To examine the relationship between board compositions, ownership, institutional structures, CEOChairmanship and firm characteristics on audit report.
1.4 RESEARCH QUESTIONS
The main research problem is broken down into sub-problems stated as research questions, which guided thestudy. Attempts were made in the course of the research to resolve the following questions which are raised:
i. Does board independencehave any relationship with audit report?
ii. Does non-executive directors’ ownership affects audit report?
iii. Is there a relationshipbetween executive directors’ ownership and audit report?
1.5 RESEARCH HYPOTHESES
The null hypotheses stated below, were tested in order to provide answers to the research questions mentioned.
H (0):There is no significant relationship between boards
independence and audit report.
H (1):There is significant relationship between board’sindependence and audit report.
H (0):There is no significant relationship between non-executive directors’ ownership and audit report.
H (1):There is significant relationship between non-executive directors’ ownership and audit report.
H (0):There is no significant relationship between executive directors’ ownership and audit report.
H (1):There is significant relationship between executive directors’ ownership and audit report
1.6 SIGNIFICANCE OF THE STUDY
The importance of auditing can be illustrated under the principal-agent relationship. The demand for external audits is directly related to the fact that it is the directors (the agents) who prepare the financial statements, which is primarily based on cost reasons. Therefore, this study is expected to provide useful insight into improving audit report. This study contributes to the audit literature as it provides additional empirical evidence on the impact of the size of audit firm on the level of audit report. The study also reflects the quality of audit report in Nigeria. This study will be useful to stakeholders in the Nigerian Stock Exchange (NSE), as it provides evidence on the relationship between audit report and the reform instituted by them in formulating the Code of Corporate Governance for listed companies in Nigeria.
1.7 SCOPE OF THE STUDY
This study is premised on the appraisal of audit report and corporate governance in Nigeria. Therefore, data on corporate organisations in Nigeria were sought in providing answers to the problems and questions that have been raised in this research work. The study focuses on Guinness Nigeria plc.
1.8 RESEARCH METHODOLOGY
The hypotheses formulated for this studywill be carried out using primary data and secondary data. The primary data consists of self-administered questionnaires and personal interviews, while the secondary data consists of data from various journals, magazines, annual reports of banks, the internet and other literatures. Data collected will be gathered, presented and analyzed accordingly using chi-square. Data will be presented using tables and percentages.