The third stage is the audits standard and evaluation, which include adequate planning and supervision, compliance with rules and regulations, internal control system and evident. The auditing standard and guideline “audit report” and “audit report to management” issued by the auditing practice committee (UK) required the auditor to report to monitors (statutory report) and to the management who instituted the report.

 Therefore to report audit work to an organization such as Consolidated Breweries Nig. Plc, a limited liability company the auditors are required to produce two reports which are domestics report and the statutory report. The domestic report is communicated to management to address each of weakness and suggestions of improvement. The statutory report is communicated to the shareholders of the organization. Such 35g (1) companies and Allied Matter Act (CAMA) 2004 provided that the report shall contain statement as to the matters mentioned in schedule 6 of the Act.

 For the purpose of the project we shall be guided by the sub – headings provided by the auditory standard procedures such as form and distribution timeliness, accounts and financial report. Although he is reporting primarily to the management, the in terms / auditor white work form basis for a sound independent external audit has also been considered under the investigation function.

 The activities of the internal auditor constitutes “a protective and constructive service to management” (Okolo 2007: 34), protections in the sense that the internal auditor guards against errors, fraud, waste and decision from established policies and objectives, and assessment of the various aspects of the operation ad make recommendations for improvements. The internal auditor is therefore a tool for management.

2.1     The Concept of Corporate Governance

 In a converging world where the gospel of free markets and democracy is resonating more than ever before, and given the far- reaching impact of companies’ operations on the wealth of nations, its bio- diversity and the distribution of economic well- being; it is becoming increasingly clear that the governance of companies, corporations, family owned businesses, small and medium scale enterprises and business associations must matter, as does political governance. According to Oladele (2006)  Corporate Governance would entail, relationships between the shareholders and the company, the exercise of corporate powers by the two main organs of the company- the Board and the Annual General Meeting and executive management generally, directors’ responsibilities for accountability and rectitude, more so as detailed by different statutes and regulations. James (2009) added that honest and fair trading by corporations, fair and equitable treatment of shareholders, minority shareholders alike, transparency and credible disclosure standards, products that take cognizance of the health of consumers, corporate citizenship and the business judgment rule are the core areas of corporate governance.

 From the foregoing, it is clear that corporate governance is an all- encompassing concept that seeks to guarantee and institute credible bedrock governance standards, in the creation of wealth, in the light of the primacy that corporations have come to assume in privately- led economies. In support, Karugor Gatamah, Executive Director of Kenya’s Private Sector Corporate Governance Trust, sees good Corporate Governance as the lifeblood of a prosperous society.

2.2   Synopsis on Financial Reporting and Development of Audit Report

 The history of auditing in its primitive or traditional form can be traced back to ancient time in Egypt. According to (Howard 2000: 1), modern approach to auditory as it exists today was a development of the later 19th century. An increased complexity of modern commerce which call for high degree of skill and discernment has greatly expanded the scope of the auditors operation (Emeya, 2003: 17 – 19), here, the independent auditor examined the accounts of business entity in such a detail as will enable the auditor to form an opinion as to their accuracy, truth and fairness. The opinion founded by the auditor and contained in the audit report must be in compliance with the companies and allied matters ACT – 2004. The opinion must be addressed to the shareholders who institute the audit and who the auditors are directly responsible to under statutes.

 According to Milky, (2008: 2) audit work resulted from the practice of stewardship accounting system. In the circumstances, the need arose from some means by which shareholders might be satisfied that the accounts reported to them by their board of director did show an objective view of the financial position and result of the company.

 From this reason therefore, developed the practices of appointing an auditor whose duty was to verify on behalf of the shareholders the account presented by the directors and to report thereon. In early history of auditing, the main qualification of an auditor was reputation, he was blamed when fraud were committed by members of staff. A man of high integrity, moral balance and independence of mind was usually honoured as an auditor and technical ability being regarded as secondary, with growth in the auditing standard and guidelines of the U.K’s professional accounting bodies. The statutory recognition given I.C.A.N guides the members of the body the license to practice auditing.

 2.3   Objective of Financial Reporting

 A balanced report is one that meets standardized audit requirement. It has to be fair in reporting objectively every information about the company’s financial activities. As contained in the contents of the auditors report, the report is guided or governed by:

 (i).    Statue regulating the existence and operation of the company. In Nigeria, such loans include companies and allied matters Acts, 2004; Bank and Other Financial Institutions Act (BOFIA) 1991, the Insurance Act 2003 etc.

 (ii).   the audit standard.

 The auditing standard is considered below:

 Land down by auditing standard: the auditing standard requires that auditors report should state clearly.

 i.      Title identifying the address

 ii.     The financial statement audited

 iii.    Respective responsibilities of directors and the auditors.

 (iv).  Basis of auditors opinion.

 (v).   auditors opinion

 (vi).  Signature of the auditors.

 (vii). Data of the auditors report.

 According to section 359(1) of CAMA 2004, the auditor shall report to the members of the company but where the company is quoted in the Nigeria stock exchange, the auditor will as well report to the members of the company and audit committee.

This material content is developed to serve as a GUIDE for students to conduct academic research