Tag Archives: Audit Evidence

Information Technology, Audit Evidence and Financial Performance of an Organization (Published)

Financial information is expected to inform its stakeholders about an organization concerning the best objective decision making options. Most financial statements appear misleading occasioned by inappropriate application of discretionary accruals which falsify financial information. It is on this note that the research was carried out to further investigate the assertion. The research design adopted seventy (70) manufacturing companies contained in the stock exchange fact book of 2013 .The basis of this selection was on companies industrial output on yearly ratings by Manufacturing Association of Nigeria (MAN). The period of study covered seven years i.e. 2007 to 2013. In the Nigerian Stock Exchange Calendar, 2007 marked the end of the period of boom in stock trading after which the stock market experienced a near collapse in the stock prices to date. Findings revealed that the combination of electronic and manual sources of evidence complemented by the audit committee oversight function have positive significant effects on the financial performance of companies. Specifically, audit committee was found to have significant impact on financial performance of the entities via effective corporate governance. In particular, boards of firms that have functional and effective audit committee appear to have effectively oversee the financial transactions of the firms, and managers generally agree to comply with the board directives as prescribed. The evidence confirmed that audit committee, when constituted mostly of independent or non-executive directors, have a restraining effect on unauthorized actions of executive managers. It was concluded that the complementary role of IT, audit evidence and audit committee, ensure effective financial disclosure and by extension the financial position of an organization. It was therefore recommended that to ensure credibility of financial statement performance, the application of IT, audit evidence and the contribution of the audit committee be handled professionally. These should also be disclosed appropriately in the financial statement.

Keywords: Audit Committee, Audit Evidence, Financial Performance, Information Technology