The financial accountability of an enterprise has gotten to a level that the roles of accountants as well as auditors must not be neglected because they play a significant role in ensuring financial probity and accountability of all private and public enterprises. The accountants ensure the proper recording, preparation and presentation of financial statement which comprise of profit and loss account, the balance sheet, cash and fund flow statement and so on inline with the various statutory guidelines and status.

For any organization to be successful, it has to be partly measured by the level of achievement of its objective at least possible cost. Since the enterprise cannot exist in isolation, the  achievement of the stated objectives are influenced and dependent on various factors, one of which is accounting policies and audit procedures used as tool towards accountability and transparency in all companies. The accounting policies and audit procedures are being influenced by both local and foreign, legal and economic environment Roberts (1979) said that auditing and accounting in any company attempt to ascertain discipline in the entire financial transaction by ensuring the accountability and transparency of the various custodians and users of public funds. Financial accountability calls for a simplified structure that avoids duplication and achieve greater impact, empowered and responsible managers, a learner and more efficient organization that fosters management excellence and is accountable for achieving results. Proper accountability requires that an organization provides a professional or financial account (or justification) of its activities to another stakeholding group or individual. It presupposes that an organization has a clear policy on who is accountable to who and for what. It involves the expectation that an organization will be willing to accept advice or criticism and to modify its practices in the light of that advice and criticism.

The role of accountants and auditors in leading credibility to those financial statements is of paramount  importance in establishing markets. It is no longer a gainsaying that the function of the auditors and accountants in leading credibility to financial statements has been growing in importance, rapidly and steadily over the last five decades. Such reports are relied on heavily by potential investors, creditors, financial analysts, tax authority and others. Without such confidence the whole basis of many companies would be destroyed. Thus the significance of the role of accountants and auditors can never be disputed and is of great contribution to the achievement of many organizations.


The increasing and alarming rate at which businesses fail. in recent time has raised doubt in the minds of investing public as to the relevance of accountants and auditors in presenting the collapse through the process of certifying their accounts. This has raised dust and conflicting views as to whether an accountant or auditor owes ultimate allegiance to the public or to his client aid management. As a result of the foregoing the new companies springing up have failed to receive the support of both foreign and local investors. The reason behind this is not because these companies do not show the prospect of future gain but it is because management of the company and reports from the auditors.

Also,  inadequate of efficient and effective records of accounts by the accountants and auditors, that is, inadequate preparation, presentation and auditing of records by accountants and auditors make the fact and figures disclosed in the financial statement obscured and unreliable for investors and other management of the enterprise.



The aim of undertaking this research study is to give an overview of the role of accountants and auditors in ensuring financial accountability and their various companies and to delve to the area in which the auditor is under obligation to report on the performance of the company to which is auditing.

The study will look at some of the reasons why businesses fail, how performances can be measured and evaluated, planning and the users of financial information with their various uses. This study will certainly contribute to the existing knowledge through the various areas that it would investigate.


There have always been conflicting views as to whether the role of accountants and auditors is of paramount to both public and the chart is the management. This has generated a serious argument among the practicing accountants and auditors as to the person they owe duty of care to the general public or the client to whom they provide service.

The importance of this study is to make known the role of accountants and auditors in financial accountability, that is, the independent auditor must assume that reporting responsibility transcends an employment relationship with the client. Also, the independent auditor performing its special function owes ultimate allegiance to the corporation’s creditors and stockholders as well as to investors.


In order to carry on a critical analysis of an overview of the role of accountants and auditors in financial accountability, there are some questions that bothers the minds of the potential investors, general public and the researcher that need to be looked into, asked, investigated and answered before justice can adequately be done to the subject matter. The questions:

  1. Does an accountant and auditor owe ultimate allegiance to the public or his client?
  2. What is the relevance of financial accountability in building an investment portfolio of any company?

iii.      What is the relevance of internal control to financial accountability          in manufacturing company.

  1. What is the significance of internal audit department when external auditor will still be employed to audit and give opinion on the        accounts of a company?
  2. What are the major problems that accountants and auditors encounter in enhancing financial accountability?
  3. To whom did accountants and auditors owes the duty of care is it to the members of the company who employ his services or to the public who rely on his independent opinion to make some decision       as regarding the company?


The research hypothesis that can be derived are as follows:

Ho: Accountants and auditors play significant role in financial        accountability.

Hi:     Accountants and auditors do not play significant role in financial   accountability.

Ho:    Financial accountability is more of a responsibility of the      management than the auditors and accountants.

Hi:     Financial accountability is more of a responsibility of the      accountants and auditors than the management.

Ho:    Internal audit and internal control is enough drive towards financial accountability.

Hi:     Internal audit and internal control is not enough drive towards financial accountability.

Ho:    The knowledge of computer and electronic data processing have

been of great help towards accountability.

Hi:     The knowledge of computer aids electronic data processing is insignificant towards accountability.


This study intends to cover the manufacturing sector in Nigeria but much attention will be focused on West African Household Utilities Management Co Ltd. The company way  chosen because it is a manufacturing company with some statutory requirements as to financial accountability and also with published  audited financial record at the end of its accounting period. The population for this study will be derived from the manufacturing sector.

The sample will be taken from the West African Household Utilities Management Co. Ltd. (WAHUM) henceforth in Lagos state. The non-probability simple 1.8 design technique is chosen with emphasis on quota sample type. The data for this project will be collected purely from primary and secondary sources. Information receive from primary source will be obtained from questionnaire sent to the internal audit and accounts departments of WAHUM Co. Ltd Ogba Ikeja, Lagos State.

The secondary source of data used in this study was obtained from internet, auditing textbook and other financial management textbooks and also past record of articles that relate to this project study.


This study is intended to cover various companies but attention will be focused much on the manufacturing sector which have statutory requirement with a stringent control by the Corporate Affairs Commission (CAC) than private companies financial report but public companies are mandated to publish and audited financial report of activities of each year.

Moreover, the role of accountant and auditors in ensuring financial accountability will be adequately looked into through the activities of manufacturing sector. The role of auditors will be critically looked into, that is, both the internal as well as the external auditors while accountant will be a generalized term for companies, institutions or corporate concern.





For detail analysis and better understanding of the subject “An Overview of the Role of Accountants and Auditors in Financial Accountability, it is highly pertinent to discuss some of the terms used in this project work and analyze the concept to the readers.


Audit is defined by Walter and Robert (1977) as an examination of a company’s financial statement by a firm of independent public accountants. Awe (2005) defined auditing as “an independent examination of the books and accounts of an organization by a dully appointed person to enable that person give an opinion as to whether the accounts show a true and fair view and comply with relevant statutory guidelines”.


The concept entails the willingness and readiness to submit to public enquiry or examination to confirm that the activities of the stewards are clear and without doubt Joseph  (2010). They must be certified as true and fair by the trustee or his appointed agent who should be of sound integrity.




This concept of stewardship and accountability implies that management is usually divorced from ownership. On the part of the management, it is usually imperative for them to render their stewardship to the owner of the business. Thus, stewardship is the term used to the practice by which production resourced owned by one person or group are managed by another person or group of persons.


This type  of  accountant undertake the audit of a public company. To perform an audit of a business, a firm of certified public accountant (CPA) makes a careful study of the accounting system and gather evidence both from within and outside the business. The independent status of a certified public accountant firm to make an annual audit is just as important as its technical competence in assuring outsiders that the financial statement by management discloses all relevant information and fair picture of the company financed position and operating result.





By “truth” we mean the financial statement is a true summary of the book of accounts and records of the company. By “fairness” we refer to the consideration of the interest of all stakeholders on a fair basis.


This refers to the reports prepared by the public companies showing the income they generated during the period and how it is expended during the same period. It includes the income statement, profit and loss, cash and fund flow statement, and statement of source and application of fund, auditors report e.t.c.






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Updated: June 14, 2018 — 5:06 am

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