This audit report is a reassurance to management that it is fulfilling its stewardship and accountability roles. It enables the owners of organization for example, the shareholders of a company to rekindle with competence in management and decide whether or not to explain the scope of their investment in such organization. Thus, the audit report is a strong indication to investors, guiding them on investment decisions in their lending decisions to creditors and organizations, where it gives tax authorities an initial confidence in the tax returns filed by organizations. This research work attempts to examine the level of confidence exhibited by members of the Nigerian society, as well as the implication of such psychological attitude to audit reports. This research will contain five chapters. Chapter one contains the introductory part, statement of research problem, objectives of the research, its significance, scope, the necessary hypotheses and constraints.  Chapter two will be a detailed evaluation of audit and audit report of financial statements. Chapter three comprises of research methodologies. Chapter four shows the method of data collection and analysis of the information gathered, while chapter five comprises of findings, recommendations and conclusion to the topic. 


Title page ii

Certification iii

Dedication iv

Acknowledgements v

Table of Content vii

Abstract xi


1.1Background of the Study1

1.2 Statement of Research Problem 5

1.3 Objective of the Study 6

1.4 Scope of Study 6

1.5 Significance of the Study 7

1.6 Statement of Hypothesis 7

1.7 Limitation of the Study 8

1.8 Definition of Terms  

References 10


2.1 Brief history of Auditing 11 

2.2 Meaning of an Auditor and Auditing 15

2.3 Objective of Auditing 17

2.4 The Need of Auditing 19

2.5 Organizations that Need audit Work 21

2.6 Independence of the Auditor 27

2.7 Appointment of an Auditor 28

2.8 Remuneration of Auditors of a Company 29

2.9 Provision of Ethnical Guides to Enhance Independence 31

2.10 Ethics of the Profession 32

2.11 The Liability of the Auditor 33

2.12 Auditors Duty on Illegal Acts 35

2.13 Communication with Predecessor Auditor 36

2.14 Auditing Standards 37

2.15 Audit Guideline 38

2.16 Planning Audit Engagement 40

2.17 Audit Programme 41

2.18 The Audit Process 42

2.19 Attributes of Internal Auditor 45

2.20 Determinant of Internal Auditor 46

2.22 The Effectiveness of Internal Auditor 46

2.23 Consideration and Co-ordinating Works with Internal Auditors 47

2.24 Auditors Working Environment 48

2.25 Authority and Responsibility of Internal Auditor 49

2.26 Scope and Objectives of Internal Audit 50

References 69


3.1 Introduction 71

3.2 Sources of Data 72

3.3 Sample Size 72

3.4 Method of Data Presentation 72

3.5 Decision Rule 74

References 75


4.1 Introduction 76

4.2 Data Presentation 77

4.3 Test of Hypotheses 78

4.4 Discussion of Findings 78



Findings 89


Conclusion 92

Bibliography 94

Appendix 96




A major function of the banking system is the transfer of funds from the surplus units to deficit units of the economy. This is achieved through deposit mobilization and onward lending to customers by ways of loans and advances.

Most money deposit banks in Nigeria today cannot equivocally declare that they have been untouched by problem of loans certainty; it is a way of life in these tumultuous times of investing that virtually all investors are faced with problem loans.

Whatever form of lending is adopted by commercial banks in any given situation depends on the purpose of the borrower and the circumstances of the transaction. The important thing to understand is that regardless of the form investment lending takes, a debt is inevitably created between the bank and customers.

The bank becomes the creditor and customer, the debtor. Review of loan facilities span served stages from the request stage to the repayment and when the facilities get bad.

In this research work, the aim is to outlines the prerequisite for loan, warning signals, management of problem loan as well as debt recovery strategies with the impact of the credit and debt recovery department towards recovering of such debt.

It appears that the review of a debt recovery structures should be related to review of analytical tools of credit facility towards its restructuring, preparing a workable game plan or pay out plan. In this project, the subsequent chapters will look at prevention of problem debts and various strategies for recovering credit facilities. 

The numbers of volume of good loan and advance seriously determine the degree of profitable commercial banks. Consequently, profitable commercial banks have to limit or eliminate the number of bad account in their lending portfolio. It is necessary to note that all funds tied up in bad and doubtful account are not accountable for further onward lending.

Also, with the advent of CBN prudential guidelines, non performing loans and advances who interest have been outstanding on these account are not reflected in the earnings of commercial bank, but charged to interest suspense and charged income when realized. Bad debt regarded as negative contributors to the profitability of commercial banks.

So banks should be expected to be the most relevant to provide for bad debts unless it is unavoidable.

Another dimension however is that critics are quick in pointing out that the high bad or doubtful debts figures in final accounts of commercial banks could be realistic. It is also alleged that banks could use such provision to evade tax. It also demonstrate the incompetence of the lending bankers in the management of loan able funds on the other hand, it is held that this provisions shows the level of convenience by the bank officer system. This views was expressed by the president of Association of Shareholders of Wema Bank, Mr. Akintunde Asaw. He alleged that some of the official of Wema Bank acted outside the specified authority and scheduled by irregularly approving loans. He therefore gave the bank up to 1990 to recover all irregular loans while assuring that those involved “regular disbursement” of shareholders would be punished.

The final accounts is of most commercial banks in Nigeria have provisions for bad and doubtful debts of various figures while the funds of the level of such provisions id decreasing in the case of some commercial banks for other, it is increasing.

This reflected in the comments made by the Chairman of the Board Directors of such commercial banks. In the case of the Bank of the North provision for bad and doubtful debts were N6.8 million (1993), N6.7 million (1994) and N213.5 million (1995). This shows an increasing trend from 1992 to 1995, which may not be connected with the allegation of the President of shareholders of Wema Bank.

The view of the provisions for bad and doubtful debts by banks in the country has necessitated on in-depth study into the fundamental factors for such losses by the bank. Consequently, the fundamental objective of this study is to identify the causes of bad and doubtful debts and controls been employed by banks to minimize or eliminate such debts. In so doing, we will be able to establish the efficiency of the control otherwise in the banks lending system. Consequently, appropriate recommendations could be made for improvement.


It is paramount to state as clearly as possible some of the prevailing problem of loan and debt recovery, how it has impeded the smooth operations of financial institutions and thereby hindering the banking sector chances of achieving its objectives.

The essence is to appreciate the magnitude and the vital roles which the investment company plays as the lubricant to the economy, as a sector, it is the pillar of the economy. It is therefore as a result of these important roles that the researcher have taken pains to carryout an in depth research into the impact of credit and debt recovery department in investment company with the view to identifying not only the problem loan, but the possible causes of this loan becoming bad debt and possibly make recommendation that will perhaps assist in solving these problems.


The main objective of the study was to examine debt recovery procedures of money deposit banks in Nigeria. Specific objectives of the study are:

1. To find out debt recovery techniques employeed by money deposit banks in Nigeria.

2. To identify debt recovery challenges of money deposit banks in Nigeria.

3. To examine the relationship between bank profitability and returns on loans and assets.

4. To recommend techniques to minimize bad debts in money deposit banks.


In order to achieve stated objectives for the study, the following research questions will guide the study:

1. What debt recovery techniques can be employed by money deposit banks in Nigeria?

2. What debt recovery challenges exist in money deposit banks in Nigeria?

3. What relationship exist between bank profitability and returns on loans and assets.

4. Which techniques can be employed to minimize bad debts in money deposit banks?


Like in all research work, the significance of this study are :

a) To provide additional material to carry out future research in this area

b) To increase and widen the scope of the researcher’s knowledge

c) To educate and enlighten the public on the impact of credit and debt recovery department towards accomplishing the organization objectives.

d) To assist the investment company in identifying some of its pressing loan problem with a view to take steps in recovering such loan which will make it achieve its overall objectives.


Hypothesis one

Ho: bank customers do not often divert borrowed funds to other purpose different from that to which loan was sought.

Hi: bank customers often divert borrowed funds to other purpose different from that to which loan was sought

Hypothesis two

Ho: CBN credit guidelines do not have influence on the bank liquidity and profitability.

Hi: CBN credit guidelines have influence on the bank liquidity and profitability.


The researcher have decided to limit the area of coverage to three (3) Money deposit banks in, Warri Delta State, due to the nature of its activities particularly the department of Credit and Debt recovery division considering that they perform similar activities in the head office , other branches in the industries. It will be quite difficult if not impossible to cover the entire investment industry as it would involve traveling in order to have access to materials for information and other logistics which may eventually hamper the effort of the researcher.


When conducting a research, the researcher is faced with some constraints. The prominent constraints faced as a result of conducting the research are as follows:-

i)  Financial constraints, the present economic hardship amplified by the increase in fuel price has limited the researcher’s movement for this purpose.

ii) Time constraints, academic work for the semester occupied most of the time required for the research work allowing limited time for the research work

iii) Facts and vital information’s regarded as secret are been hoarded from the research, thereby limiting the information’s required

iv) Problem of busy schedules, rescheduling of booked appointment s, receiving phone calls and unscheduled meeting.


The terminologies used in this study are defined below for the clear and understanding of such terms by the readers.

SECURITY - Can be defined as a cash or fixed assets pledge by customers to secure loan.

DOCUMENTATION – This involves any written and endorsed papers that in one way or the other relates to the lending transaction.

DEMAND NOTICE - This is a reminder to the Client that a certain amount is due for repayment and the Client is advised to come along and meet his obligation.

STATUTORY NOTICE – This is a legal notice sent to the Client that he has certain period (usually three months) within which he must pay his loan.

FULL BACK ON GUARANTEE – This case applies in a situation where the loan is guaranteed by outside body.

LEASES – Is a contract between a lessor (the owner) and the lessee (the user) for hire a specific asset selected from a manufacturer or vendor of such assets by the lessee.

LOAN – Is the facilities extended through loan accounts for investment products of medium and long term nature where amortization is at predetermined intervals or made in full at the end of an agreed period.

SYNDICATE – Is simply the lending to one borrower by a group of banks or lending institutions.

CREDIT – Money given to a customer for later payment 

CREDIT MANAGEMENT – Arrangement put in place of repayment of credit facilities

DEBT – Is the credit received by a borrower from a prime lender who may be a formal or informal financial institution.

BAD DEBT – Are debt are doubtful of recovery

FINANCIAL INSTITUTION – Refers to in this study represent mainly the banking sector and other investment houses.




RESEARCHWAP.ORG is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • " is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • " is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing