Appointment And Removal Of Auditors: Implications On Professional Independence (A Study Of Selected Audit Firms In Owerri)

ABSTRACTThere are a number of relationships that exist between the auditor and his clientand for which a number of arguments have been stirred. One of such areas is theappointment and dismissal of auditors by management. Though the lawstipulates that auditors be appointed by shareholders, in practice, this is notalways the case. The design for this study is a survey design, the method of datacollection involved the use of a well-structured questionnaire, the population ofthe study consists of all auditors working in selected auditing firms in Owen,Imo state, Nigeria. A simple random sampling technique was used in selectingfive audit firms and a sample size of 45 from the population of 51. Contentvalidity and surface validity was carried out by my supervisor and theinstrument was analyzed using descriptive statistic and simple regression. Theresearcher discovered that appointment and dismissal of auditors have nosignificant effect on their professional independence, that the board of directorsappoints auditors in practice and auditors are not threatened by management toloose their job if they fail to cover fraud in a firm. Consequently, the researcherrecommended that the power to appoint auditors should be vested in the handsof the shareholders alone.