ABSTRACT

The study examined the roles of auditors in the banking sector distress in Nigeria. The study involved a survey of three (3) out of fourteen (14) distressed banks recently declared insolvent by Central Bank of Nigeria in January 2006. A stipple size of sixty (60) persons was drawn from the banking industry, banking public and auditing firms. They were administered with structured questionnaire. This was completed by the interview of a few Central Bank of Nigeria and National Deposit and Insurance Corporation Staff. Data obtained were subjected to statistical analysis using simple percentage ratio and chi-square (X2) statistics. The study indicates that auditors roles are significantly related in the banking sector distress; and that auditors failure in their responsibility caused a negative impact on the banking sector distress. Also, auditors independence and management interface are positively and significantly correlated in the banking sector distress in Nigeria. It was concluded that auditors failure in carrying out their responsibilities according to auditing standards and professional ethic and provisions of the regulatory rules and regulations increased the banking sector distress; and as such negatively affected the Nigeria economy, and that the auditors major hindrance in auditing and reporting independently 1. in the true position of affairs of the distress banks is caused by management inference. This study recommended that no a audits' should be allowed to audit a financial sector more than twice.