The primary purpose of auditing is to determine the true and fair view of the financial statements and investigation relates to checking of particular record for a specific purpose. The investigations launched by the financial regulators and other stakeholders into the cases of distressed banks revealed that accountants and auditors have not done their work properly. As a result of that, this study aims at assessing the adequacy of audit in disclosing fraud in commercial Banks of Nigeria. To achieve the objectives of the study, primary and secondary data were used. Thirty (30) questionnaires were administered to the study respondents that were purposively selected from some selected commercial banks in Owerri, auditing firms and shareholders. Guided interviews were also conducted with some of the respondents. The simple percentage method was employed to test the research hypothesis. The analysis of responses gathered revealed that the external audit is not adequate in revealing fraud. Based on the finding, the study recommended that an interim audit should be made mandatory in the commercial banks by the regulatory authority alongside forensic audit as it will reduce the gravity of frauds in commercial banks.

CHAPTER ONE

1.0 INTRODUCTION
This is the introductory chapter of the chapters. is briefly explains the background of the study, statement of the problem, objectives of the study, research questions, statement of hypothesis, significance of the study, scope of the study, limitations of the study and definition of terms.

1.1 BACKGROUND OF THE STUDY
Auditing is a vital part of accounting. Traditionally, audits were mainly associated with gaining information about financial systems and the financial records of a company or a business. Recent auditing has begun to include non-financial subject areas, such as safety, security, information systems performance, and environmental concerns. With non-profit organizations and government agencies, there has been an increasing need for performance audits, and examining their success in satisfying mission objectives. As a result, there are now audit professionals who specialize in security audits, information systems audits, and environmental audits. An audit must adhere to generally accepted standards established by governing bodies. These standards assure third parties or external users that they can rely upon the auditor's opinion on the fairness of financial statements or other subjects, on which the auditor expresses an opinion. Auditing as a profession arises primarily because of separation in the ownership as well as the administration of a business enterprise. The owners of a business that is shareholders pool their resources together for the purpose of establishing an enterprise, with a common goal of profit making or otherwise. These shareholders may not be available for the day to day administration of the company hence the need to appoint professional managers, whose main responsibility is to utilize the shareholders fund effectively. The managers are expected to prepare an account, that is, a quantitative statement stating how the shareholder’s resources were utilized during a period referred to as accounting year. The duties of auditors as provided in Sec. 360 (1),(2) and (5) of Companies and Allied Matters Act (2004, as amended) in preparing their reports is to carryout necessary investigations and ascertain whether, proper accounting records have been kept by the company; the company’s balance sheet and (if not consolidated) its profit and loss account are in agreement with the accounting records and returns made as well as whether the information given in the director’s report for the year for which the accounts are prepared is consistent with those accounts and, if they are of opinion that it is not, that should be stated in their report. The investigations launched by the financial regulators and other stakeholders into the cases of distressed banks revealed that accountants and auditors have not done their work properly. Despite the distress, some banks have opened new branches in some parts of the country while others have ceased operations and changed names to Keystone bank, Mainstreet bank, Enterprise bank and some were acquired. What factors attributed to the distress, change of names and acquiring of those banks? Could it be as a result of the inability of auditors to disclose fraud perpetrated in them, capital structure, management, customers’ patronage, loss of goodwill or just to change the names? Faith in the audit that is essential to auditor’s job waned because of severe crimes left undetected until billions of naira were lost through the Chief Executive Officers’ (CEO) insider trading of some Nigerian commercial banks such as Afribank Plc, Intercontinental bank, Oceanic bank International Plc, Union bank, and First Inland bank as reported by Waziri (2009). As a result of the questionable role of auditors, this study’s main objective therefore, is to assess the adequacy of audit in disclosing fraud . Other objectives are: to find out the party (ies) responsible for the problems encountered by the distressed banks, and to examine the reliability of audit reports.

1.2 STATEMENT OF PROBLEMS
External auditing functions are seen as powerful tool that could aid corporate performance and in fact existence. The sensitive nature of the banks especially in Nigeria has put more demand on external auditing reports as most depositors look up to the yearly assurance reports affirming and reaffirming the viability or otherwise of the banks. In the early 1990's Nigeria experience the collapse of almost eighty (80%) of her first generation banks like the Cooperative and Commerce bank(CCB), African Continental Bank(ACB), Orient Bank and a host of others. Reports have it that a good number of depositors lost their deposits, other forms of investments in the banks and even lives. Again, between 2008-2009, the Central Bank of Nigeria in a bid to save the banking public floated the Asset Management Company of Nigeria (AMCON) to rescue about five banks in Nigeria which were declared weak whose assets and depositors' funds were in the negative balance. Undoubtedly, these banks had external auditors who had conducted annual auditing on their accounts and certified the banks as being healthy. Studies have been carried out on the general role of the external auditing in areas of fraud prevention in the banking industry but few or none has been conducted on the role of external auditing on encouraging the growth of banking business in Nigeria with specific interest on deposit mobilization and hence this study. Other matters that could arise remains:

• Whether the perceptions of the stakeholders are in line with the statutory responsibility of the external auditor and how could the auditor reposition himself to address this issue.
• Whether the directors actually prepared and presented the true financial statement or whether certain materials facts were hidden from the external auditors on which he bases his opinion.
• Whether the auditor has exercised enough due diligence that could support his quality assurance reports.

1.3 OBJECTIVES OF THE STUDY
The primary objective of the study is to examine the roles of external auditors in the growth of banking business in Nigeria with special emphasis on deposits mobilization.
Specifically, the paper will:

• Ascertain the level of liability of the external auditors to third parties and how his role can influence deposit growth.
• Examine the degree of responsibility of external auditors as specified in the relevant statutes and how it can affect the quality of financial reports.
• To ascertain the nature of the problem which the external auditors face while auditing Nigerian companies.
• To identify the cause of the problems
• To ascertain the effects of these problems on the work of the auditors
• To recommend measures that could enable external auditors to overcome the problem identified.
• To recommend measures to be taken to overcome those problem.

1.4 RESEARCH QUESTION

• Can the problem which the external auditors face while auditing Nigerian companies be checked
• Is there any cause of the problems faced by external auditors
• Is there any effects of these problems on the work of the auditors
• Can there be any measures that could enable external auditors to overcome the problem identified

1.5 SIGNIFICANCE OF THE STUDY
This study will enable the new or intending auditors to be aware of the problems they will encounter in the course of performing their duties and be able to guard against them. It will also enable government to know how it can play its role in creating a better and conducive atmosphere for auditor who has been engaged to perform any duty in the Nigerian companies.
Again, it is expected that this study will consider contributions of directors in Nigerian companies toward a better auditing atmosphere in their various companies.
Furthermore, this study will form a good reference material for any other student who may wish to embark on related topic in future.

1.7 THE SCOPE OF THE STUDY
The study will not exceed problems encountered by external auditors in Nigerian companies. It will consider the effects of these problems on the work of the auditors and proffer possible solution to the problem.

1.8 LIMITATION OF THE STUDY
There are many constraint facing the researcher during her study in this field such constraints include:

• Time Factor: the time that is made available for carrying out the study is limited. Most often, it is interrupted by other academic programme and circular work.
• Lack of Finance: there is an insufficient fund to meet up with financial demand required. As a result some research procedures, methods, techniques and process intended for this study will not be applied because of the cost involvement.
• Scarcity of Local Data: most of the text book that deal with the problem under review are foreign texts and are no longer current.
• Non available problem: in spite of several calls, some officers who the researcher wants to interview cannot be reached at because of their office schedule.

1.9 DEFINITION OF TERMS
AUDITORS: an auditor is a person who examines the book of accounts and vouchers of an organization in such a manner as to enable him express an opinion as to whether the accounts show a true and fair view of the state of affairs of the organization at a particular period.
INTERNAL AUDITOR: this is a person employed in an organization whose responsibility is to review the operations and record of the business of the organization and to keep management informed of its operation on a more continuous basis.
CLIENT: the company or business organization audited by the external auditors.
PERMANENT FILE: the permanent file contains information of permanent nature which are of continuing relevance to the auditor as regards to the operation and financial statements of the company being audited.
CURRENT FILE: the current file (working file) contains documents and working papers which relate to the current year’s audit.
SYSTEM FILE: a system file contains details of an organizations system of accounting and internal control i.e. the system of the organization documentation both manual and computer system.
INTERNAL CHECK: internal check is defined as the allocation of authority and duty in such a manner that afford check on the routine transactions of day to day work by means of work of one person being complementary to that of another person.
AUDITOR’S REPORT: this report shall state whether in the auditor’s opinion the annual account has been properly prepared in accordance with the companies and allied matter decree and whether the account shows a true and affair view of the company’s state of affairs.