ABSTRACT
The recent wave of corporate failures had been linked with corporate governance deficiencies in relation to false financial statements and misrepresentations together with unrealistic unqualified audit reports. Stock market financial analysts, corporate investors and other stake holders are all confused with the relationship between favorable audit reports and corporate failures in the business world. This concern had created distrust on the truthfulness of financial statements and lack of confidence on audit reports and audited financial statements. To bring back public confidence on audit report, the researchers decided to consider factors such as personal and audit qualities as measures to improve the truthfulness of audit reports and financial statements. The study was conducted among selected audit firms and users of financial statements in Nigeria. A questionnaire was used to collect primary data and a simple chi-square was used to test the hypotheses. The results revealed that auditor‟s personalities and perception in life has a direct bearing on the truthfulness of audit reports. The researchers recommended that the relevant professional bodies of accounting in Nigeria should improve on their supervisory role on audit quality reviews and peer review on audit firms in Nigeria.
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