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International: $20
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Analytical tool
Descriptive & regression
 MS Word & PDF

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The importance of financial reporting transparency and accountability has increased in recent years, particularly in the aftermath of economic collapse and financial crises.

Additionally, experts have discovered that Financial Reporting Transparency and Accountability affect a firm’s performance.

Corporate failures and scandals have compelled the need for changes and enhanced regulation, notably in the area of corporate governance.


The study’s objective was to discover measures to improve financial reporting’s transparency and accountability through audits. The research questions for this study were as follows: What role do auditors play in ensuring the transparency and accountability of financial statements? What function does an audit committee have in terms of Transparency and Accountability? Commercial banks were the focus of this study, with National Financial Credit Bank serving as the case study.


The target population consisted of 30 respondents who were bank employees. The data were coded and analyzed using SPSS software and a Microsoft Excel document. Tables and charts were utilized to show the findings, and inferential statistics were also used to interpret the data.


The study stated that auditors’ roles in enhancing the openness and accountability of financial reports included risk assessment, control and operations evaluation, policy and procedure compliance assessment, asset verification, and delivering views on financial statements.


Additionally, the study concluded that the audit committee’s role in enhancing the transparency and accountability of financial reports were reviewed. This included reviewing internal audit plans, reports, and significant figures, monitoring accounting principles selection, ensuring a comprehensive and ongoing risk management process, establishing a direct reporting relationship with external auditors, supervising financial reporting and disclosure, and ensuring that financial statements are understandable.






1.1The Study’s Context


Auditing has been at the heart of the complex corporate world since the dawn of human civilization, but it was only properly acknowledged and implemented in the nineteenth century. The late nineteenth century was a watershed moment in auditing history, with the enactment of regulations such as the English Companies Act of 1862.


Auditing was introduced as a result of the separation of ownership and control, as landlords held real estate, businesses, and other forms of wealth that were overseen, regulated, and managed by stewards. Reports were later produced by individuals in control of the business to demonstrate how the business operated.


With time, businesses were no longer solely owned by a single individual, but by a group of partners, shareholders, or even stakeholders who expect reports from directors and management on the operation of the business, including any aspect of profit or loss incurred, cash inflow and outflow, financial position (assets and liabilities), and how the business has grown.


Due to the inherent conflict of interest between management and shareholders or business owners, the only way to ensure the reports’ credibility is to appoint an independent person to investigate them and express an opinion on whether they were prepared in all material respects and provide a True and Fair View.


Thus, auditing is the study of an entity’s financial statements or reports that enables an auditor to provide an opinion on whether the financial statements were prepared in compliance with a recognized and acceptable framework for financial reporting. Auditing must be conducted by a qualified, impartial third party. There are two types of auditors: internal and external. Both types of auditors examine the financial statements submitted to them by management.


Internal auditing, according to Robertson (1976), can be described in a variety of ways depending on the intended goal. Internal auditing is an objective, independent reassurance and consulting activity that aims to provide value and grow an organization’s operations through the assessment and refinement of risk management, controls, and governance systems. Internal audit was historically viewed as a monitoring function that serves as the organization’s policeman and watchdog.


It might be viewed as an organization-wide independent appraisal exercise. It is worth noting that, while an internal audit department is an integral aspect of a business, it should be autonomous from the line of management whose area of responsibility it may examine.


Whereas external auditing is a periodic and independent examination of an entity’s books of accounts and records by a qualified person who is not an officer of the enterprise to ensure they have been properly maintained, are accurate, comply with established concepts, principles, accounting standards, and legal requirements, and present a true and fair view of the entity’s financial statements.


Transparency and accountability have been elevated in recent years, and as a result, auditing must be conducted effectively. Transparency in this context refers to the open disclosure of a company’s financial information, which helps reduce volatility by requiring all market players to make value judgments using the same facts. Most governments have laws and rules encouraging or mandating transparency.


For instance, the Securities and Exchange Commission (SEC), a government organization in the United States, is the major regulator of the securities industry. It endeavours to verify that all transactions are fair and that there is no price manipulation or insider trading.


Additionally, it encourages full disclosure and closely analyzes mergers and acquisitions to maintain competitiveness. Transparency entails the complete, accurate, and timely disclosure of information; it can be thought of as the degree to which investors have ready access to financial information about a company, such as price levels, market depth, and financial statements.


On the other hand, accountability occurs when an individual or department is held accountable for the performance of a specified role. Accountability entails accepting responsibility for the result of specific events. It requires accountants to exercise caution and understanding in their professional practices, as negligence may result in legal action.


Even if they did not make any errors, an accountant is responsible for the accuracy and integrity of financial statements. Managers of a business may attempt to distort their company’s financial statements without the accountant’s knowledge.


There are numerous incentives for managers to do so, as their compensation is typically contingent on the company’s performance. This is why an independent body (auditors) is required to review financial statements, and responsibility requires them to be informed and circumspect in their examination.


Transparency and accountability have aided in the improvement of corporate governance. Transparency and accountability are widely regarded as corporate governance pillars. Corporate governance is defined as the structure of rules, relationships, procedures, and processes that govern how an organization’s authority is exercised and controlled. It is viewed as a relationship between the board of directors of a business, its shareholders, management, and other stakeholders (Cadbury, 1992).


It is a well-known truth that transparency increases a corporation’s profitability. Due to previous financial crises and corporate scandals, the question of financial report transparency and accountability in modern commercial banks has garnered unprecedented attention. It has sparked debate and empirical investigation in both rich and developing countries.


Numerous countries have seen massive financial scandals and fraud as a result of the late 1990s stock market bubble and speculations about the future of ‘dotcom’ enterprises. The bubble burst in 2000, shortly after it was revealed that senior management at Enron, a US energy firm, had deceived investors by artificially inflating profitability.


Other corporations implicated in fraud include WorldCom, Parmalat, Cable and Wireless, and Xerox. In Cameroon, oil income was diverted, as testified by the World Bank.


Additionally, the Sarbanes-Oxley Act (SOX) of 2002, sometimes referred to as the public business accounting reform and investor protection Act. Corporate governance, auditing, accountability, responsibility, and transparency are all addressed in this Act. This is a federal statute in the United States of America designed to protect investors from fraudulent accounting practices.


The SOX Act imposed stringent requirements on firms to improve their financial reports and avoid accounting fraud. The SOX Act was enacted in reaction to financial malfeasance in the early 2000s when public scandals like Enron Corporation, Tyco International Plc, and WorldCom undermined investors’ faith in financial statements and prompted a review of regulatory standards.


Greater accountability and openness are believed to promote company performance by optimizing resource allocation, increasing efficiency, and expanding growth potential (Chipwa, 2005).


Transparency and accountability are critical components of corporate governance process improvement. Essentially, openness is critical for organizations to improve their performance and responsibility.


Transparency is crucial for an accountability culture to exist, even more so in markets where competition is fierce (Katera, 2003). This means that anyone with an interest in business organizations must have complete information about their operations to make sound judgments and, if required, take corrective action. This is only achievable if people responsible for the everyday operations of business organizations are sufficiently transparent and accountable. Transparency and accountability are critical in Cameroon’s development as a developing country.


In this regard, (Katera, 2003) recognizes that the primary means of business survival, wealth creation, and maintenance for corporate organizations are transparent and accountable processes. As a result, there is a need or desire to increase transparency and accountability to maximize shareholder wealth and the overall performance of the corporate organization.


According to the OHADA UNIFORM ACT related to Commercial Companies and Economic Interest Groups, the first Act adopted, “all public limited companies must engage an auditor to examine and report on the directors’ accounts.” Private Limited Companies are not required to comply with certain audit requirements by law. A sometimes overlooked point is that auditors do not function on behalf of directors; rather, they act on behalf of shareholders.


In light of this, this study examines the role of auditing in enhancing the transparency and accountability of financial reports at the National Financial Credit Bank.


1.2 Affirmation of the Research Problem


Transparency and accountability are becoming increasingly topical, widespread, and also under-researched in business (Chipwa, 2005). In rich and developing countries alike, the importance of financial reporting transparency and accountability has increased, particularly in the aftermath of economic collapse and financial crises.


Despite existing corporate regulation, which includes a legislative framework and norms governing commercial banks, a lack of openness and accountability regarding financial reports contained within solid corporate governance procedures has resulted in organizational failures.


To our knowledge, there is a dearth of literature dealing extensively with the transparency and accountability of financial reports in commercial banks in Cameroon.


Similarly, to our knowledge, the elements that contribute to the transparency and accountability of financial reports in commercial banks in Cameroon have been overlooked. The following research objectives are proposed in light of this existing gap.


1.3 The Study’s Objectives


The study’s purpose is divided into two categories: general and specific.


The overall goal is to increase the transparency and accountability of financial reporting in commercial banks.


However, the study’s particular aims include the following:


To ascertain whether the audit finance committee oversees the transparency and accountability of commercial banks’ financial reporting.


To ascertain the role of auditors in promoting the openness and accountability of commercial bank financial reports.


To analyze the effect of audit quality on accountability and transparency.


To investigate if board independence improves the transparency and accountability of commercial bank financial reports.


To determine if the concentration of ownership improves the transparency and accountability of commercial bank financial reports

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