The research topic is the effects of qualified audit report of a company. A study of UACN Plc AND PZ Cussons Plc. It is a known fact that some business organizations are in the habit of corporate deceit where financial statements are made to appear better than the true positions of affairs in these organizations. This had led to a lot of business going under after declaring fantastic results at year –end. In this study, there is the case of disagreement between the board and auditors of UANC Plc regarding the amount of revaluation surplus included in capital reserves to be released to profit following the transfer of the company’s investment properties to the newly incorporated UANC property development company. There is also the case of disagreement between the board and the auditors of PZ Cussons Plc over payment made out of profits arising from the use of this company’s property and fixed asset sold for dividend when the company was unable to pay its debts as they fall due.
The objectives of the study is to determine the relationship between the market share price and the earning per share of UACN Plc and PZ Cussons Plc from 1992 to 2003 and also to compare the PE Ratio of UACN Plc from 1991 to 2003. the hypotheses of the study are the market share price and earnings per share of UACN Plc have no significant relationship with the market share price and earnings per share of PZ Cussons Plc from 1992 to 2003 and also there is no significant relationship between the PE Ratio and UACN Plc and PZ Cussons Plc from 1002 to 2003.
The methodology adopted includes the research design, sample size, and population of the study, sampling techniques, data collection procedure, and the techniques of data analysis. The research design, which is a guide for data collection, adopted Y for the dependent variable, which is the market share prices and X1 and X2 for the independent variables – earnings per share and price earning ratios respectively. The sample size is 92. it was determined using the yard Yamene’s formular for a definite population. The population of the study is the capital market report from 1992 to 2003 of UACN Plc and PZ Cussons Plc published by the Nigerian stock exchange for all companies listed on the exchanges. This is a 10 years period, which consist of 120 months. The sampling technique adopted was the stratified sampling method. The data collected have been assembled in tabular form with appropriate titles. The multiple regression model technique have been adopted because we have three variables, one dependent and two independent variables; Y, X1 and X2.
The major findings from the study showed the with the exception of 1992 to 1997, the EPS and the PE Ratio was unable to significantly influence the market share prices of both UACN Plc and PZ Cussons Plc. This means that a higher EPS did not significantly move upwards the market share price of the two companies and a lower PE Ratio did not significantly move upwards the market share price of the two companies.
The conclusion from the study indicated that investors did not react significantly as to influence the market share price of the shares of UACN Plc and PZ Cussons Plc after auditors of both companies issued a qualified audit report. The recommendation proffered indicated that a qualified audit opinion does not necessarily mean that market share price of a company’s stock would be affected either upwards or downwards.

Title page
Table of Contents

1.0. Background of the study
1.1 Statement of Problem
1.2 Objectives of the study
1.3 Research Question
1.4 Statement of Hypotheses
1.5 Definition of Terms used in the study
1.6 Scope of the Study
1.7 Significance of the study

2.0. The Origin and Development of Auditing
2.1. Evolution of Auditing Standards and Guideline
2.2. Current Auditing Standards and Guidelines
2.2.1. International Auditing Standards and Guidelines
2.2.2 Statement of Auditing Standards
2.2.3 The Auditors Operational Standard
2.4. Audit of Holding Companies
2.5. Audit of Groups of Companies
2.6. Relevance of Accounting Standards to Auditing
2.7. Legal Position of Auditors Unger CAMA 1990
2.7.1. Appointment of Auditors
2.7.2. Qualification of Auditors
2.7.3. Auditor’s Report
2.7.4. Auditors Duties and Powers under CAMA
2.7.5. Main Objectives of Audit
2.7.6. Director’s Reports
2.8. Investment Property [IAS40]
2.8.1. Summary of IAS40
2.8.2. Other Classification Issues
2.8.3. Initial Measurement
2.8.4. Measurement subsequent to Initial recognition
2.8.5. Fair Value Model
2.8.6 Cost Model
2.8.7. Transfers of or from Investment Property Classification
2.8.8. Disposal of investment property
2.8.9 Disclosure of IAS40.75]
2.8.10 Additional disclosures for the value Model [IAS40.76]
2.9. Additional Disclosures for the cost model [IAS40.79]
2.9.1. Qualified Audit Reports
2.9.2. Types of Qualification
2.9.3. Materiality in Audit
2.9.4. Over all Consideration of Materiality
2.9.5. The 5% Rule in Materiality
2.9.6. Financial Statement Amounts that should have been recorded but were not

3.1. Research Design
3.2. Sample Size
3.3. Population of the study
3.4. Sample Techniques
3.5. Data Collection Procedure
3.6. Techniques of Data Analysis
3.6.1. Models Explanation and justification
3.7. Research Area

4.1. Data Presentation
4.2. Data Analysis
4.3. Test of hypothesis one
4.4. Test of Hypothesis two
4.5. Test of Hypothesis three
4.6. Test of Hypothesis four

5.1. Summary of findings
5.2. Conclusion
5.3. Recommendations


The practice of auditing in a primitive in form can be traced back to ancient times. Auditing, as it exists today was established only in the latter part of the19th century. Under company form of organization, the share holders as a body, delegated the management of the company, the board of directors and periodically the board submits to the shareholder the accounts of the company in order that the members may see the financial position and the profit or loss of the undertaking in which they are interested.

In these circumstance, the need arose for some means by which share holders as s body night be satisfied that the accounts presented to them by their board of directors show an objective view of the financial position and results of the company.

It was for these reasons, therefore, that the practice developed of appointing auditors whose duty it was to verify on behalf of the shareholders the accounts of the director and to report there on to the shareholders. Obviously is imparacticable and impossible for every shareholder of a company to examine the brooks and records of company.

It was for these reasons, therefore that the practice developed of appointing auditors whose duty it was to verify on behalf of the shareholders and therefore the shareholder as a body of auditors to act for them.

Under the English companies act of 1900, the auditors appointed were one or two of the shareholders of the company. However, the chosen auditors commonly had no technical qualifications, they were probably not able to carry out a very effective audit nor were they paid anything for the work they did. A latter act did provide for them to employ a clerk to do some work, whose remuneration should be provided by the company.

It was the amended English companies act that first made it legally compulsory for every company to appoint independent auditors as we not know them and provide for their remuneration.

An audit cannot be s substitute for internal control over transactions exercised at the time, nevertheless, an assessment of these control must the made by the auditor so that he can determine the value of detailed checking necessary to enable the discharge of his primary audit function. This also then provides services to management in putting out deficiencies in internal control and making recommendations for improvements.

Note that the responsibility for the prevention and detection of irregularities and fraud rest with the management who may obtain reasonable assurance that this responsibility will be discharged by instituting an adequate system of internal control.

The auditor should recognize the possibility of material [irregularities or fraud which could, unless adequately disclose distort the results or state of affairs shown by the financial statement. The audit should there fore be carried out in such a way that it is planned so that the auditor has a reasonable expectation of detecting major misstatement in the financial statements resulting from irregularities or fraud.

The research study is therefore, an attempt to actually establish the effects of a qualified audit report on a company. Considering the disagreement between the board of directors of UAC Nigeria plc and the company’s auditors regarding the amount of the revaluation surpluses included in capital reserves to be released to profit following the transfer of the company’s investment properties to the.....

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