THE EFFECTS OF QUALIFIED AUDIT REPORT ON A COMPANY A STUDY OF UACN PLC AND PZ CUSSONS PLC

ABSTRACT
The research topic is the effects of qualified audit report of a
company. A study of UACN Plc AND PZ Cussons Plc. It is a known
fact that some business organizations are in the habit of corporate
deceit where financial statements are made to appear better than the
true positions of affairs in these organizations. This had led to a lot of
business going under after declaring fantastic results at year –end. In
this study, there is the case of disagreement between the board and
auditors of UANC Plc regarding the amount of revaluation surplus
included in capital reserves to be released to profit following the
transfer of the company’s investment properties to the newly
incorporated UANC property development company. There is also
the case of disagreement between the board and the auditors of PZ
Cussons Plc over payment made out of profits arising from the use of
this company’s property and fixed asset sold for dividend when the
company was unable to pay its debts as they fall due.
The objectives of the study is to determine the relationship
between the market share price and the earning per share of UACN
Plc and PZ Cussons Plc from 1992 to 2003 and also to compare the
PE Ratio of UACN Plc from 1991 to 2003. the hypotheses of the

study are the market share price and earnings per share of UACN Plc
have no significant relationship with the market share price and
earnings per share of PZ Cussons Plc from 1992 to 2003 and also
there is no significant relationship between the PE Ratio and UACN
Plc and PZ Cussons Plc from 1002 to 2003.
The methodology adopted includes the research design,
sample size, and population of the study, sampling techniques, data
collection procedure, and the techniques of data analysis. The
research design, which is a guide for data collection, adopted Y for
the dependent variable, which is the market share prices and X1 and
X2 for the independent variables – earnings per share and price
earning ratios respectively. The sample size is 92. it was determined
using the yard Yamene’s formular for a definite population. The
population of the study is the capital market report from 1992 to 2003
of UACN Plc and PZ Cussons Plc published by the Nigerian stock
exchange for all companies listed on the exchanges. This is a 10
years period, which consist of 120 months. The sampling technique
adopted was the stratified sampling method. The data collected have
been assembled in tabular form with appropriate titles. The multiple
regression model technique have been adopted because we have

three variables, one dependent and two independent variables; Y, X1
and X2.
The major findings from the study showed the with the
exception of 1992 to 1997, the EPS and the PE Ratio was unable to
significantly influence the market share prices of both UACN Plc and
PZ Cussons Plc. This means that a higher EPS did not significantly
move upwards the market share price of the two companies and a
lower PE Ratio did not significantly move upwards the market share
price of the two companies.
The conclusion from the study indicated that investors did not
react significantly as to influence the market share price of the shares
of UACN Plc and PZ Cussons Plc after auditors of both companies
issued a qualified audit report. The recommendation proffered
indicated that a qualified audit opinion does not necessarily mean that
market share price of a company’s stock would be affected either
upwards or downwards

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