Abstract:
Purpose : The aim ofthis study is to find out whether the shareholders who invest big
sums of money in textile companies, are getting accurate and complete information about
the company and the financial matters in the annual report or not. Iftrue information is
not disclosed then shareholders interest is not secured.
Methodology: In this exploratory research a sample size of 245 shareholders offour
textile companies; Nishat, Gul Ahmed, Yunus, Salfi has been selected. Primary data was
collected by means of questionnaire .The collected data has been integrated using SPSS
and it has been analysed through descriptive statistics (graphs) and inferential statistics
(regression and correlation.) Reliability test has also been performed to know about the
internal consistency ofthe items in my survey instrument which is questionnaire.
Findings: The research concluded that the qualitative interest ofthe shareholders such as.
strict audit by reputable audit firms and higher trust in financial statements ifaudited by
credible audit firm, is being secured to some degree by the external audits. However, the
quantitative interest ofthe shareholders such as, sufficient informative balance sheet,
profit & loss statement, is not being secured through the statutory external audits carried
out in the textile companies of Karachi. So, it has been concluded that overall statutory
audits conducted in the textile sectors of Karachi do not secure the shareholders’ interest
as appropriate level ofexternal auditor’s independence is absent and it is impaired
through various tactics by the management.
Research significance: This research is ofsignificant worth for the Security and
Exchange Commission of Pakistan (SECP) & management (board ofdirectors) so that
proper strategies may be formulated to secure the shareholders qualitative and
quantitative interest. It puts forward the shareholders concerns regarding the statutory
audits conducted in the textile sector ofKarachi.
