THE ROLE OF EXTERNAL AUDITORS AND BANK INSPECTORS IN THE DISTRESS CONDITION OF BANKS

ABSTRACT

Over the years the Nigerian banks have been ravaged by the phenomenon called bank distress. The role of bank Inspectors and External auditors in this regard cannot be over emphasized. when it became apparent that the distress was leading to total; doom, the federal Government stepped in this intervention led to liquidation of banks of curb and menace of distress on our banks. Banks were liquidated due to poor capital base, insider abuse are mismanagement. More also other problems ravaging banks are forgeries, frauds and financial indiscipline etc. this posed grant challenges to management. Here the work of the auditors set in; The primary duty of the auditor is to report on truth and fairness of the financial statement. The project took a look at the auditor’s and inspectors reviving the true banking culture. Auditors are given the constitutional powers to control frauds and forgeries. But the reverse is the case, in the sense that we have management-aided fraud. One management is supposed to check fraud, financial indiscipline, and corruption in the bank’s management, vis-à-vis, the auditor’s shares the responsibilities of promoting, maintaining financial discipline, deterring frauds and forgeries, thereby curbing the menace in the banking industry. The regulatory bodies, the NDIC and CBN saddled with the task of monitoring financial institutions, over worked with the job of sanitizing the banking sector and instilling public confidence in it. Adhering strictly to the laid down policies, procedures with compliance through the monitoring role of bank inspectors and external auditors aided by management, will go along way to remove bottlenecks in banks in general. It is understandable that the banks inspectors and external auditors put more efforts in other to revive banks. The services of bank auditors are nor relegated to the background.