Partners at Stransact (Chartered Accountants) have called for adherence to global standards and ethical practices in the conduct of audits in Nigeria.
The correspondent firm in Nigeria for the sixth largest international accounting firm -RSM, while addressing the media in a recent briefing, 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 organisations comply with relevant laws and regulatory frameworks, said the accounting experts.
Globally, it stated, 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, emphasised 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.
RSM is a powerful Network of audit, tax and consulting experts with offices all over the world comprising of independent audit, tax and consulting firms. RSM International operates in 123 countries with a combined staff of over 51,000 and has 860 offices across the Americas, Europe, MENA, Africa and Asia Pacific. With a strong and growing presence in Africa, the network has member firms in Botswana, Kenya, Zambia, Mauritania, South Africa and Tanzania. However, the network typically has a correspondent firm where it does not have a full member firm such as Nigeria and Ghana.
Stransact is made up of local partners who are knowledge leaders in assurance, advisory and tax services. Stransact, operating as Stransact Audit and Stransact Partners, has been providing high level professional services in Nigeria since 2009. The firm has stated that its affiliation with RSM aligns “snugly with the firm’s vision of being among the leading firms in Nigeria in the near future”. It increases the firm’s ability and quality and gives the firm access to the people and resources of RSM international.