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Every Organization, profit oriented or non-profit oriented makes use of economic resources in an attempt at attaining its goals or objectives. Such an organization also engages in financial transactions in the course of its operations. More so, in a monetized economy such as ours, the task of maintaining records of financial transactions is very crucial to the survival and sound performance of the organization.  Today, since most businesses are owned by shareholders and managed by directors who are appointed by the former, there is therefore the need not only for the preparation, analysis and interpretation of financial statements but most importantly the presentation of these statements for meaningful and useful judgments and decisions (Millichamp, 1996:6).

Prior to the presentation of the financial statements, sections 359 – 360 of the Companies and Allied Matters Act (CAMA, 1990) mandate the auditors to carry out such examinations and investigations as may enable them to form an opinion.  The owners who appoint the directors as stewards are concerned with what happens to their investments.  These directors are expected to render stewardship Accounts to the shareholders.  These accounts are usually presented by means of financial statements best known in form of Profit and Loss Account, Balance Sheet, Directors Report and Cash Flow.  These statements are produced in most cases; annually and as such form the Annual Report and Accounts.  All parties who use the annual report and accounts need to be able to believe and rely on them and auditing is the means by which this belief is obtained. Kamar (1996:1) views auditing as involving an examination and evaluation of the authenticity of a set of financial statements and the underlying books and records which results in the auditor providing an opinion on the true and fair view of those financial statements.  Auditing is an independent examination of the financial statements of an organization with a view to expressing an opinion as to whether these statements give true and fair view and comply with the relevant statutes (Aguolu, 2002:1)

The desirability of auditing in Nigeria stems from the ambit of the laws. CAMA 1990 requires limited liability companies in Nigeria to have their accounts audited by an independent expert (auditor) who shall attest to the true and fair view of the financial statements.  It is true to assert that in the past, the examinations by auditors of the set of financial statements were carried out manually in Nigeria.  Hence, the manual way in which the accounts of these companies were kept.  Since accounting data processing needs were fulfilled manually in the past, manual auditing (Traditional Auditing) was inevitable; but recent advancements in Information Technology (IT) especially in the areas of mechanization of operations have necessitated the utilization of computer facilities or technology in accounting data processing in Nigeria.  With the use of computer, large volumes of data are processed at very high speed and accurately for the purpose of prompt decision making (Bhaskar, 1982:85; 1983:29).

The computerization of accounting data in many companies in Nigeria and the needs for auditors to perform their duties in these environments have greatly fine-tuned the methods auditors discharge their duties in these computerized accounting systems. Auditing in a computer-based accounting system requires the auditor to audit round the computer or through the computer. Auditing round the computer requires the auditor to ensure that transactions are inspected before the computer processes them and the corresponding computer-generated outputs are completely and correctly processed (Michael, 2003:54).  This approach is however not adequate because, it may not detect malpractices which are perpetrated within the computers themselves or within the computer centers since auditor depends highly on computer printouts.


Auditing through the computer involves the use of specially prepared computer application which is also known as computer software or programme to interrogate files within the computer to ascertain the correctness of these accounting data processed by the computer for dependability. According to Chukwuemeka and Okoye (1998:268), auditing through the computer requires that the auditor submits data to the computer for processing and the results are then analysed for the processing reliability and accuracy of the computer program.


Computer applications are softwares or programmes developed to help carry out an assignment in the computer (Ogunsote, 1995:8).These softwares are sets of written instructions (programmes) that guide the hardware on how to perform a particular task.  The programmes control the actual work in the computer.  These computer applications are softwares that meet the needs of auditors in carrying out their duty in a computer-based accounting environment.


It is worth to note that the fundamental objectives of an audit do not depend on whether the system is manual or computerized.  The objectives are to inspect, evaluate, compare and report on financial statements presented by management.  Auditors are expected to verify whether the results are complete and accurate in order to promote overall efficiency (Walsh, 1986:8).

It is against this background that this study seeks to appraise computer application as it affects the auditors in discharging their duties of evidence collection and evaluation in companies with computer-based accounting systems.


The advent of computer used for accounting purposes first appeared as an impediment to auditors that the fundamental nature of auditing might have to change to cope with new technology (Evens, 1990:27).  According to Aguolu (2002:349), the use of computers for the processing and production of accounting information has created a number of challenges for the auditor.  Auditors are expected to still provide a competent, independent evidence collection and evaluation as to whether a set of economic activities has been recorded and reported according to established standards or criteria (Oremade, 1987:18).

It is an established fact that the computerization of accounting processes of companies has affected audit approach and the methods in which the auditor discharges his assignments in terms of evidence collection and evaluation where audit trail is lacking or scanty (Pinkney, 1966:56). While some schools of thought believe that computerization does not alter in any way the duties of the auditor to report on the reliability of the records, others believe it does.  Williams (1972:34) and Alvin (1986:42) assert that evidence collection and evaluation on the reliability of data integrity and assets safeguards in a computerized accounting system is often more complex than evidence collection and evaluation on the reliability of data integrity in a manually kept accounting system.  Auditors confront complex range of internal control technology that does not exist in manual accounting systems.


Given the increased complexity of computerized accounting system, it is also more difficult to evaluate the consequences of control strengths and weaknesses for the overall reliability of the system (Pinkney, 1966:66; Burton, 1988:39).


The question is; how has computer application to auditing contributed to evidence collection and evaluation by auditors in companies with computer-based accounting systems?  The problem therefore is the appraisal of the impact of computer application on auditing in terms of the effectiveness and reliability of the system for evidence collection and evaluation.



Auditing tasks which are so involving in the advent of computerization of accounting records have posed a number of  challenges which auditors in Nigeria must appreciate and adjust to in order to conduct an effective audit assignment in computerized accounting environment.  In view of the already stated problems, the general objective of the study is to appraise the impact of computerization on auditing and the specific objectives are:-

i        To ascertain the extent to which computer application to auditing affects evidence collection and evaluation.

  1. To determine the effectiveness and reliability of computer application in performing audit


  • To examine the relationship between computer application and the incidence of loss of audit trail.



In conducting this research, answers were sought for the following questions:

  1. To what extent does computer application to auditing affect evidence collection and


  1. How effective and reliable is computer application to auditing?
  • What is the relationship between computer application and the incidence of loss of audit




In line with the problems already stated and the objectives set to be achieved in this study, the following hypotheses are formulated on the subject matter:

  1. There is no significant difference in the means of computer applications in terms of evidence collection and evaluation.
  2. Computer application to auditing does not enhance the effectiveness and reliability of evidence collection and evaluation.

iii.        There is no significant relationship between computer application and the incidence of loss of audit trail.


Considering the importance of computer in the processing and production of accounting information, it is highly imperative to examine the impact it has on auditing vis-à-vis evidence collection and evaluation.  The study provides tested information narrowing the gap in the debate on whether computer application does alter in any way the duties of the auditors or not. Secondly, it arms us with the knowledge of how computer applications are used to carryout audit assignments in a computerized accounting system.  Furthermore, the study establishes empirically the relationship between computer application and the incidence of loss of audit trail. Moreso; it proffers solutions to the problem of loss of audit trail in a computerized accounting system.  This study also serves as an input for researches in related areas.


The study appraised the impact of computer application on evidence collection and evaluation on companies that have computerised their accounting systems in Nigeria. The evaluation was on eleven (11) selected audit firms and the evaluation of their effectiveness in using computer packages for auditing through the computer in companies that have their accounting data stored in the hard disc thereby maintaining scanty or paperless information.  The period covered in this study was five (5) years which spanned from 2001-2006.  These audit firms are located in Ibadan, Kano and Lagos.


            Study of this magnitude cannot be said to be without limitations. Of course, problems       were encountered in the course of undertaking this research work. One of the limitations        was financial constraint. This challenge of lack of enough funds made the study quite   tasking. Furthermore, audit documents are confidential documents. As most of these   security documents are not easily released, laying hands on them was not easy. However, with the cooperation of people who cannot be mentioned here, the researcher was able to    successfully carry out the research work.