The continuing influence and impact which personal and professional ethics exerts upon individuals, organizations and society, and the factors which influence organizational ethics, has been thrust into the headlines of the American populous. The ethical issues faced daily by organizations and their employees are neither always straightforward nor easy to resolve. Results of unethical behaviour by accounting/audit professionals, and the impact of ethics upon organizations, is a topic of growing concern in corporate board rooms around the world. This paper will examine the timely and important ethics and its relevance and importance to overall corporate wellbeing. In particular, what factors influence the likelihood that an individual will act ethically or less than ethical, and what this means to management, the organization, and internal controls in general. This paper is designed to help educate people on unethical accounting practices, why they occur, and how we as a nation can promote ethical behaviour

Abstract This study examined unethical accounting practice and financial reporting quality in Nigeria. Behaving ethically is an essential and expected trait for professional accountants. The society places high premium of trust and expectation from the professional accountants and auditors as such people need to have confidence in the financial reports being prepared/audited by them in making an informed decision. It’s imperative therefore, that the information being provided by accountants and auditors should be meaningfully efficient, reliable, and realistic and are unbiased. An explanatory case study approach was used for the study complemented by archival data, newspaper reports and regulatory report. One of the key issues in our findings is that extended audit tenure could impair auditor’s independence and ability to employ professional skepticism on matters at their disposal. Non adherence to the spirit and letter of corporate governance was also responsible for the corporate scandals. We recommend therefore that the composition of the board of Directors and audit committee members should be made up of people of proven integrity and corporate experience. Also the tenure of external auditors should have a terminal frame and not be too long to as to affect their ethical conduct.  


Title Page




Table of content



1.1 Background of study

1.2 Statement of problems

1.3 Objectives of Research

1.4 Scope and limitations

1.5 Research questions

1.6 Significance of study

1.7 Definition of Terms


2.0 Introduction

2.1 The history of taxation in Nigeria 

2.2 Literature Review and Theoretical Issues

2.3 Problems of Tax Collection

2.4 Prospects of Tax Collection

2.5 Characteristics of Good Tax System

2.6 Driving Institutions to tax policy and tax administration in Nigeria

2.7 Theoretical Issues



3.1 research design

3.2 population of study

3.3 sample size/sample technique

3.4 research instrument:  

3.5 validity and reliability of instrument

3.6 sources of data collection

3.7 method/techniques of data analysis

3.8 limitations of the methodology


Data Presentation and Analysis


4.2Data Analysis

4.3 Test of Hypothesis






5.6 Appendix




As Nigeria progresses in her vision to become one of the top 20 economies in the world by the year 2020, one prevailing issue that remains on the front flame is how to build investors’ confidence in the national economy through ethical accounting and auditing  standards that enhances transparent financial reporting. The catastrophic failures and scandals of some corporate giant and the extensive corruption in the society highlights the critical need to focus on the anchors of sound professional ethics in the accounting & auditing profession both in developed and developing countries (Omoyele, 2010; Fodio, Ibikunle & Oba, 2013; Ogbonna & Ebimobowei, 2012).

Furthermore, it is an understanble phenomenon that, he accounting and auditing professionals who are responsible for the preparation of financial statements need to adhere strictly to the codes of ethical accounting and auditing standards to produce reliable, relevant, timely, accurate, understandable and comprehensive financial statements in a true and fair view of the firm financial position and performance. This is because such financial statements and reports form the basis upon which the stakeholder should have confidence to make an informed decision.

Recently, there has been growing concern about ethical and integrity issues in the accounting & auditing profession in public and private on questionable acts. As such, this era has been branded by series of corporate failures, ethical negligence, auditing and accounting scandals both in developed economies and developing economies. Damagum & Chima, (2014) posits that evidence in prior research shows that poor corporate governance also attributes to such failures, hence the need to keep vigil over corporate entities behaviors as well as need to control the behavior of managers and professional accountants through effective regulations. Broadcasted cases of the recent past, such as Ernon, Satyam, WorldCom, Global Crossing, paramalat, Xerox, Tell one and some firms from Nigeria (such as, Cadbury and NAMPAK, Afri-bank) of which one of  the big four (4) auditing firm in Nigeria was indicted , these cases has drawn  aggregate attention to the auditing profession.

However, the failures of these corporate entities have been attributed to accountants and auditors not adhering to the codes of professional ethics. This has had an adverse and cumulative effect on financial reporting and the auditing profession. All these happening around the globe has brought the question of trustworthiness and integrity of the auditing & accounting profession (Bakre, 2007;

Financial reporting is a key ingredient required for the corporate governance system to function successfully. The accountants and auditors who are the main providers of information to capital market participants are expected to exercise high degree of due care and exhibit professional competence in the accounts audited by them. The directors of the company will expect that management prepare the financial statements are in compliance with statutory and ethical obligations, and bank on auditors' competence and creditability (Dignam & Lowry, 2006 Adeyemi & Fagbemi, 2011). Ogbonna (2010) debated that any society that lacks ethical thoughts may not survive for a long time to achieve its desired goals and objectives and that of its stakeholders.

As the world has now become a global market, the emphasis on the adoption of the International Financial Reporting Standards has increasingly receive attention towards common set of comprehensive financial statements across the globe and this is being anchor by The International Accounting Standards Board. In Nigeria, Companies and Allied Matters Act 2004 (as amended), Financial Reporting Council (FRC), Institute of Chartered Accountants of Nigeria (ICAN), Association of National  Accountants of Nigeria (ANAN) and other industrial specific  bodies in which auditors and accountants provide services  usually issue guidelines relating to the ethical and professional standards to be observed.  However, the effectiveness of this regulatory bodies in Nigeria in ensuring that ethical standards are maintained by corporate managers and professional accountants still remain questionable and in doubt.

Ethics is an important aspect of the accountant in business enterprise’s work and profession.Professional ethics in this context can be summed up as the commitment of the management accountant to provide a useful service for management. This commitment means that the management accountant has the competence, integrity, confidentiality and objectivity to serve management effectively (Blocher et al, 2005: 23-25).The standard of competence for example, requires the accountant to develop and maintain the skills necessary for his or her area of practice and to continually reassess the adequacy of those skills as the firm grows and become more complex, thought it can be purportedly concluded that that “greed and fear” ,the two most powerful forces in modern capitalism, are the major causes of unethical practices by professionals.

Moreover, the potential for individuals and organizations to behave unethically is limitless. Unfortunately, this potential is too frequently realized. Consider, for example, how greed overtook concerns about human welfare when the Manville Corporation suppressed evidence that asbestos inhalation was killing its employees, or when Cadbury has had its share price on the increase over the years and patronage has never declined. Despite its achievements, it was observed that Cadbury Nigeria has not had the interest of the public in the true sense of it.

This is because the company tries to influence public perception by overstating profits and understanding losses .In this case, the British confectionery giant expressed their embarrassments which led to the sack of the managing

director and his finance director.

It is against this backdrop that this research study tends to study and analyze the effect of unethical accounting practices on financial reporting quality in Nigeria.


Despite the high premium of trust and expectation the  society places on professional accountants and auditors, and  need of the general public to have confidence in the financial reports being prepared/audited by them in making an informed decision,it is imperative therefore, that the information being provided by accountants and auditors should be meaningfully efficient, reliable, and realistic and unbiased, but yet this accountants, amongst others, who are knowledgeable of the world’s financial systems are the one who are involved in the manipulation of complex transactions which make it difficult to identify and trace the origins and the ultimate destiny of the illicit funds or, when acting as auditors, are reluctant to reveal and report such activity, thereby making it difficult to uphold good professional ethical standard.

Despite the accounting standards and ethical codes guiding the accounting profession, morality and ethics has gone down the drain based on the occurrence of scandals in Enron, World Com, Nigerian Cadbury and similar scandals that have surfaced. The above antisocial and fraudulent behaviour of the elite and multinational companies cannot be easily perpetrated in any nation or economy without the advice, collaboration, or at the very least, connivance of professional accountants, who, acting in violation of their statutory duties to the public, provide their professional services to wealthy individuals, the ruling elite, private and public companies and multinational companies by assisting them to transfer the illicit wealth gained to the licit sector, thereby removing any possible criminal links associated with the wealth acquired, which indirectly negatively affect the public perception of auditor’s independence and the audit expectation gap the society have towards their professional ethical standards.

For the past two decades, a wave of high profile accounting scandals have cast the profession into the limelight, for examples,the case of  Aruwa & Atabs (2011) provided instances of creative accounting and fraudulent financial reporting in Nigeria to include Alpha Merchant Bank Plc(accounting problem and market manipulation) or the Lever Brothers Plc(exaggerated profit through the use of questionable accounting methods) and AP Petroleum Plc (false financial reporting) all these act were perpetrated in collaboration with the professionals (Accountants, Auditor). 

In spite of the enabling IT audit tools and the various professional standards such as standards as Nigerian Accounting Standard Board (NASB) now Financial Reporting Council (FRC), American Institute of Certified Public Accountants (AICPA), Auditing Practices Committee of the Institutes of Chartered Accountants of England and Wales (ICAEW) issued for guidance and efficient audit work, there are still reported cases of lapses and scandals, have been threatening theexistence of some quoted companies and capital markets in Nigeria.

Scandals within the accountancy sector have threatened the reputation of accountants and in all this type of cases; As a result of non-extended audit tenure impair auditor’s independence and ability to employ professional skepticism on matters at their disposal, also it should be noted that Non adherence to the spirit and letter of corporate governance was also responsible for the corporate scandals, 


The Major Objectives of this study are: 

1. Determine the effects of Unethical Accounting practices on financial reporting quality in Nigeria economy.

2. Explore the effects of Unethical Accounting practices on financial reporting quality in Nigeria capital Market.

3. Identify some common unethical practices by accountants,auditors, directors and company secretaries who are key players in the market economy.

4. Determine what motivates professional accountant to committing unethical accounting practices.

5. Examine the major causes of unethical practices by professionals, directors and market operators/participants when carrying out their financial activities.

6. Eliminate and suggest possible remedy for the problem of unethical accounting practices perpetrated by professional accountants.


The following research questions were asked in the project study, providing answers to them will help achieve the aim of this research study.

 These questions includes;

1. What are the effects of Unethical Accounting practices on financial reporting quality in Nigeria?

2. Are there anyeffect of unethical accounting practices on financial reporting quality in Nigeria capital Market?

3. Common unethical practices by accountants, auditors, directors and company secretaries who are key players in the market economy?

4. What are the major causes of unethical practices by professionals, directors and market operators/participants when carrying out their various activities?

5. What are the possible remedy in reducing the effect of unethical practice by professional accountants on financial reporting in Nigeria?


Unethical accounting practices occur when a company does not follow the rules of generally accepted accounting principles or GAAP. The rules of GAAP are established by the federal government, though Unethical accounting practices motivated by bonus incentives, pressure to obtain financing or a desire to appear successful are not always illegal, but they almost always have an adverse effect on your business.

Furthermore, this research study will attempts to identify some common unethical accounting practices on financial reporting quality by accountants,auditors, directors and company secretaries who are key players in themarket economy, and also suggest possible recommendation for them.

This study will also looked into the opinions of accountinglecturers on whether the teaching of ethics among student accountants can facilitate in instilling ethical behaviour in future accountants, it will also be of great benefit to the corporate world as the effective work of accountant and auditors in an organization who in turn helps to promote good ethical accounting practice and financial reporting quality.

This study will continue to be of interest to management of companies, auditors and other users of financial statements. It will enable a better understanding of common ethical and unethical accounting practices on financial reporting standard and quality.

The study will also be of importance togovernment agencies, companies, regulators and policy makers who are involved in regulating the ethical practice of accounting Standards and guidelines, it will also educate people on unethical accounting practices, why they occur, and how we as a nation can promote ethical behaviour.

Finally this study will be of great significance to schools and students, it will serve as a reference point for future researchers who will want to research more on the topic. 


To appreciate the effect of unethical accounting practice on financial reporting in Nigeria, this study has adopted a case studies approach as a research methodology. Hence, evidence from these sources was used to compile case studies.  While this evidence may be inadequate and slightly biased, it nonetheless provides evidence of antisocial unethical practices. An examination of these documentary reports is principally valuable in this esteem in that, it aids to structure and contextualize the active role of professional accountants and auditors in facilitating unethical practices in Nigeria.


Since the study focus on the effects of unethical accounting practices and financial reporting quality, For the purpose of carrying out a detailed analysis of the effect unethical practice by professional accountants could have on financial reporting, the research will be restricted to the two selected companies in Nigeria.


The limitation of the study includes:

1. Financial Constraint: the success of every research work depends largely on finance availability, and this affected the researcher because there was little or average finance at his disposal to cover the research study and the ones available was not sufficient to carry out the research effectively. 

2. Time:- this has to do with the time-frame given for the completion of the study and also other challenges; activities and engagements forcing me as a final year student reduced my time-frame.

3. Inability to generate required material from the secondary sources, such as textbooks and internets.


1. Ethics:These are the moral principles that an individual uses in governing his or her behaviour. Ethics refers to a discipline in which matter of right and wrong, good and evil, virtue and vice are systematically examined  (Brinkmann, 2002;  Ogbonna & Appah, 2012).

2. Accountant: this is an individual whose work involves the application of accounting in performing some or all of the following: preparing financial statements; conducting financial investigations; preparing, reporting and advising on the purchase and sale of businesses, business combinations, obtaining capital for enterprises, changes in partnerships, fraud and insolvency, preparing tax returns; giving advice on tax administration and other services.

3. Objectivity:refers to the need to maintain impartialjudgment (e.g. not developing analysis to support a decision that the accountant knows is not correct.

4. Auditor:this are individual, a partnership firm, or an organization carryingout an audit of an enterprise or an undertaking. Such persons are not usually employed by theaccounting entity or by its managers and is, as far as possible, independent of the persons who managethe entity, hence they are often referred to as ‘external auditors’; or ‘accountants in practice

5. Directors: this is defined under section 244(1), CAMA 2004 as ‘persons duly appointed by limited liability company to direct and manage the business of the company. Every registeredcompany must have at least two directors for private limited, and at least seven for public limitedcompany

6. Confidentiality: A professional accountant should the information obtained in the course of professional services without explicit permission of the employer or the employer's confidential anddisclose such information unless or without the professional legal duty exposing the information on be permitted.

7. Unethical accounting practices: this refers to a situation when a company does not follow the rules of generally accepted accounting principles or GAAP.

8. Professional ethicrefers to the professional behavior and characteristics that identifies professional accountants as members of a profession.


Afribank Nigeria PLC was a commercial banking, real estate and insurance broker based in Lagos, Nigeria.[1] It was established by French investors in 1959 under the name Banque Internationale pour l'Afrique Occidentale (BAIO] As at 2010, the bank operated over 250 branches across Nigeria, and was one of the region's "Big Four" banks. Afribank used the Temenos Globus banking application in its branches.


Afribank's core business was in commercial and retail investment banking. It also operated stock brokering firm, an insurance brokerage firm, a trustees and investments company, and estate development company, a capital market firm, and an offshore finance company in Dublin, Ireland.[2] Afribank also invested in companies in the financial and real sectors of the Nigerian economy.

Failure and closure

Afribank failed in 2011 and its banking license was revoked by the Central Bank of Nigeria, the national banking regulator. The assets and some of the liabilities of the now defunct Afribank Plc. were acquired by Mainstreet Bank Limited, a bridge institution, specially created for that purporse on the same day.[3] In July 2012, the Federal High Court of Nigeria, in Lagos ordered that the affairs of the defunct Afribank Nigeria Plc be wound up, since its license had been revoked

Mainstreet Bank was formed in August 2011 by taking over the assets and some of the liabilities of the now defunct Afribank Plc., whose commercial banking license was revoked. MBL was issued a commercial banking license on 5 August 2011.

Mainstreet Bank is a large financial services provider in Nigeria. Mainstreet Bank Limited assumed the assets and liabilities of Afribank Plc., which had an epochal beginning as one of the big four banks in Nigeria, since October 20, 1959.

Mainstreet Bank was formed in August 2011 by taking over the assets and some of the liabilities of the now defunct Afribank Plc., whose commercial banking license was revoked. MBL was issued a commercial banking license on 5 August 2011. 

Cadbury Nigeria Plc

Cadbury Nigeria is a member of the Cadbury Schweppes Group, a major player in the global confectionary and beverages markets with over 40, 000 employees and business operations in 200 countries.  Cadbury Nigeria has a portfolio of brands that are market leaders in the Confectionery, Food Drinks and Foods categories.

Cadbury’s initial objectives in the 1950s to source cocoa and prospect for a market in Nigeria led to the establishment of a manufacturing facility in Ikeja, north of Lagos, in 1965. 

The company has since grown organically to become one of the leading manufacturers in Nigeria, with a rising profile in the Europe, Middle East Africa (EMEA). Listed on the Nigerian Stock Exchange since 1976, Cadbury is in the top 10 of the 258 quoted equities by market capitalisation at the end of 2002. Cadbury Schweppes currently owns 46.3% of the equity, with the balance stock held by about 40,000 individual and institutional shareholders.  Cadbury Nigeria is one of the few signatories to date to the Convention on Business Integrity. 

Its lead brands include Tom Tom, Bournvita and Bubba bubble gum. Other brands include Cadbury Eclairs, Cadbury Chocki, Trebor Mints, Halls Take 5 (vitaminised candy), and Creme Rollers. Cadbury Nigeria also owns a cocoa processing business, the Stanmark Cocoa Processing Company.

Cadbury Nigeria Plc is located along Lateef Jakande road Lagos.



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