Partners at Stransact (Chartered Accountants), the correspondent firm in Nigeria for the 6th largest international accounting firm –RSM, have called for adherence to global standards and ethical practices in the conduct of audits in Nigeria. Addressing the media in a recent briefing, the accounting experts encouraged auditors in the country to follow a strict ethical approach in the conduct of their professional duties.
Auditors are professional accountants authorized to review and verify the accuracy of financial records and ensure that organizations comply with relevant laws and regulatory frameworks. Globally, strong ethics and credibility are crucial to the efficient conduct of audits since auditors are expected to be independent, reliable, honest, and carry out their duties without prejudice.
“Auditing is a reputation-based business. Without a credible reputation, an auditor cannot function efficiently. This is why an auditor signs financial statements as an individual and not as a company or corporation”, said Eben Joels, General Partner at Stransact.
“The level of respect and trust you have in financial statements is directly proportional to the credibility of the auditor. Therefore, auditors should dispatch their jobs bearing in mind that their responsibility is not to make the client look good but to be accountable primarily to the client’s stakeholders that is- shareholders, investors, regulators, and employees,” he added.
The International Federation of Accountants (IFAC), has compiled the international Code of Ethics for Professional Accountants, which establishes the standard of behaviour expected of a professional accountant (PA). The fundamental principles within the code include integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.
The three other partners at the firm buttressed the comments by the general partner.
Yomi Salawu, the Partner, People & Regulatory Services, emphasized on the importance of independence in the audit process.
“Integrity is a very important quality for an auditor but it is difficult to possess integrity without independence. Therefore, an auditor should not only profess to be independent but must also be seen as independent,” Mr. Salawu said.
According to Bola Mogaji, Partner, Audit Services, “Credibility is a watchword that should not only be maintained but must be perceived and seen in all the engagements of professional accountants. The absence of this important virtue has led to the continuous series of recent accounting scandals and audit failures that have undermined the credibility of auditing and auditors.”
Victor Athe, Partner, Tax Services, mentioned some of the factors that impact the credibility of an auditor, including objectivity, independence, integrity, professionalism, level of qualification, and trust.
“It must be noted that, if the ratio of the fee from a particular client to the total revenue of the auditing firm is too high, the firm’s independence will be questioned, a proper audit firm cannot earn all its fees from one client,” Mr. Athe added.
