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Financial experts have stressed the need for greater independence among auditors and audit committees, warning that compromised oversight could undermine confidence in financial reporting and expose organisations to fraud and corporate failure.
The experts spoke at the Audit Committee Conference held recently in Lagos, where they called for stronger governance practices, professional scepticism and proactive oversight to improve transparency and accountability in both the public and private sectors.
Delivering a presentation at the conference, the Founder and Chief Executive Officer of Regulatory Compliance Readiness Advisors Limited, Dr. Iheanyi Anyaghara, described auditor independence as the foundation of credible audit work.
According to him, an auditor’s ability to act independently is what gives value and credibility to the assurance process.
“Independence transforms technical audit work into credible, trusted assurance. Without independence, assurance collapses into affirmation and oversight becomes a ritual,” he said.
Anyaghara noted that independent auditors strengthen public confidence in financial reporting, corporate governance and institutional integrity because they are able to present objective findings even when doing so may be unpopular.
He, however, cautioned that maintaining independence is becoming increasingly difficult due to human bias, workplace relationships and organisational pressures that often discourage dissent.
He said sustaining independence requires continuous vigilance, professional scepticism, self-reflection and the courage to resist undue influence.
Also speaking at the conference, former President of the Institute of Chartered Accountants of Nigeria (ICAN), Doyin Owolabi, urged audit committees to play a more active role in detecting errors and preventing fraud in financial reporting.
Presenting a paper titled Gate-Keeping: Detecting Error and Fraud in Financial Reporting, Owolabi said effective gatekeepers must remain informed, vigilant and responsive to emerging risks.
According to him, audit committees should consistently question management’s assumptions and ensure that financial statements accurately reflect the true financial position of organisations.
He added that internal auditors must pay close attention to the effectiveness of internal controls and reporting processes to reduce the risk of financial misstatements.
Similarly, Partner, Assurance Services at EY Nigeria, Williams Erimona, said audit committees must evolve from being passive reviewers of financial reports to becoming active guardians of corporate integrity.
He explained that effective oversight requires committee members to challenge management’s narratives, interrogate assumptions and rely on verifiable evidence before making decisions.
“The audit committee as guardian of truth must shift from passive reviewer to active navigator,” Erimona said, adding that members must possess the capability, courage and resilience to anticipate risks and respond effectively.
On the role of internal audit, former Chief Audit Executive of the Nigerian Institute of Management and West African Portland Cement Company (WAPCO), Festus Ogunmokun, warned that sidelining internal audit functions could have devastating consequences for organisations.
Speaking on Internal Audit: Guarding the Truth from Inside, Ogunmokun said weak internal audit systems have contributed to some of the world’s biggest corporate scandals.
He cited the collapse of Enron, the Wirecard accounting scandal and Toshiba’s financial reporting crisis as examples of the dangers of weak internal controls and ineffective oversight.
According to him, internal auditors should not only detect fraud and financial irregularities but also help prevent them through effective risk identification, stronger internal controls and the promotion of ethical conduct across organisations.
He added that internal audit teams must be equipped to identify behavioural anomalies, unexplained financial variances, undocumented control overrides and other early warning signs of misconduct before they escalate into major corporate crises.
The experts agreed that strengthening auditor independence, empowering audit committees and reinforcing internal audit functions remain critical to improving corporate governance, protecting investors and restoring public trust in financial reporting.
