Leadership (Abuja)
Justus Nduwugwe
10 November 2008
Abuja — The President of the Institute of Chartered Accountants of Nigeria, Chief Richard Uche has advised auditors to develop risk management techniques, particularly for the selection of clients.
He also argued that greater emphasis must be placed on "know your clients" conditionality, adding that risky clients must pay a premium to secure the services of an auditor.
The ICAN President, who made this plea recently in Abuja while opening a seminar on 'Independent Auditor's Responsibility To Consider Fraud in an Audit of Financial Statements', also stated that careful analysis of the risk profile of a client must precede acceptance of audit assignments, if audit firms are not to be unduly exposed.
"Audit firms should have in-house mechanism for assessing the financial and ethical history of an establishment, before determining whether to accept or reject its audit assignments. In addition, the management of companies must be made to sign documents in respect of the authenticity of all representations made to the auditor and duly accept responsibility for false information", he further said.
According to him, rebuilding the waning confidence of the public in the audit profession demands a paradigm shift. Indeed, he stressed that the auditor's attestation role will continue to entail full disclosures, consistent compliance to accepted principles and the expression of an opinion on the objectivity of financial reports prepared by the directors, its new mandate of fraud detection will raise the profile of the profession as a watchdog that can bark and bite.
These, in his opinion, would help to give the financial statements the desired credibility and reassure users through the instrumentality of the external auditors' reports.
Continuing, the ICAN boss stated that as required by the standard, auditors must endeavour to check for fraud risk factors during the planning and execution of audit engagements, irrespective of their impression of the management of the organisation in the immediate past.
In his opinion, these fraud risk factors relate to occurrences or developments that might put pressures on client personnel or and those in governance responsibilities such that they may be tempted to commit or condone fraud.
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