CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Ordinarily, an auditor is one to whom the receipt and payment of an organization were read, as is simplified in the Latin verb audira, to hear. This is so because in the ancient time account and records of business, estate, trust and farms were checked by their owners by their being called out by those who compiles them. Auditing however, as it is known today is an independent examination of the financial record and statement of business organization non-profit making bodies, government parasatatrals etc with a view to reporting on them whether they show a true and fair view.

The practice was known to have been exercised by such ancient civilization as the Egyptians. But infact, the increased complexity of commerce today ha greatly widened the scope of auditor operation and has called for a high degree of skills and discernment likewise, the development of modern accountancy and auditing is also credited to the great expansion in industry and commerce, which has taken place since the industrial revolution. It should be realized that the swift change in nature has really created an increases in business transaction and investment in limited liability companies, where share holders are not the manager of their capital. This has thus provided the need for the manager to account to the shareholder. On this note the government made provision for accounts of companies to be examined and reported to the persons other than those who manage the business.

The role of external auditor in banking operation have been investigated in this research works using three selected banks in Aba as a case study for the study. This is based on the fact that there are numerous banks with branches in Aba and the following are the three selected banks to be discussed.

i. FIRST BANK OF NIGERIA

ii. UNITED BANK FOR AFRICA PLC (UBA)

iii. INTER CONTINENTAL BANK PLC.

1.2 REVIEW OF THE SELECTED BANKS

First Bank traces its ancestry banks to the first major financial Instruction founded in Nigeria, hence the name. The current chairman is Dr. Ayoola Oba Otudeko, OFR. The bank is the largest retail lender in the nation, while most bank gather funds from consumers and loan it out to large corporations and multinationals, first banks has created a small market for some of its retail clients.

At the end o August 2006, the bank had assets totaling 650billion Nigeria or $5billiopn dollars. The bank was also the most highly capitalized stock on the Nigeria stock exchange, and had about 10 billion outstanding shares. It has a subsidiary in the United Kingdom, FBN bank (UK), which has a branch in Paris. The bank also has representative offices in south Africa and China. The company was named the best in Nigeria by Global Finance magazine in September 2006.

The first auditors are Akintola Williams Deloitte and Touche (Chartered Accountant) and KPMG Audit (Chartered Accountants) .

The firm has solid Short and Long term ratings from Fitch and the Global Credit Rating Company partly due to its low exposure to non-performing loans. The firms compliance with financial laws has also strengthened with the Economic financial crimes commission giving it a strong rating.

Due to spaces, I may see this is all I have about first Bank.

In terms of (UBA) which means United Bank for Frica Plc is the product of the merge of Nigeria’s third (3rd) and firth (5th) largest banks, namely the old UBA and the erstwhile standard trust bank Plc (STB) respectively, and a subsequent acquisition of the erstwhile continental Trust Bank Limited (CTB). The Union emerged as the first successful corporate combination in the history of Nigerian Banking.

Today the United bank for Africa Plc is one of the Africa’s lading financial Institution offering Universal banking to more than 7 million customer across 750 branches in 14 African countries with presence in new York, London and Paris which assets in excess of $19 bn ,UBA is your partner for banking services for Africans and African related businesses globally.

Lastly, Intercontinental bank Plc which established as a merchant bank in February under the name, Nigeria Intercontinental Merchant Bank Limited. Commenced business with paid up ordinary share capital of N12 million. In five years it become the most profitable merchant bank in Nigeria.

1989, September 1, The first subsidiary, Intercontinental securities Limited (INTERSEC) and investment company was s et up in 2000 converted to Universal Banking, 2002 became a publicly quoted company listed on the Nigerian Stock Exchange with IPO of 288, 995,000 ordinary share, which was fully subscribed.

2004 Public offer of 2.75 million ordinary shared in December, in its quest to exceed the new N25 billion shareholders funds as prescribed by the CBN. Subsidiary by 136% and reaffirming investors confidence in the banks. While 2005 was the merging with three other banks. Equity, Gateway and Global in October, 2005.