By Kehinde Ibrahim, Lagos
Experts have advocated that financial reportingmust be anchored on stronger independent audits, effective oversight and robust internal control systems if organisations are to maintain investor confidence and guard against fraud, financial misstatements and corporate failures, and financial governance.
Speaking at the Audit Committee Conference in Lagos, the experts stressed that auditors, audit committees and internal audit functions must operate without undue influence, exercise professional scepticism and embrace proactive governance practices to strengthen transparency, accountability and institutional integrity across 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 cornerstone of credible assurance and effective corporate governance.
According to him, the value of an audit depends largely on the auditor’s ability to act objectively and without external influence.
“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 enhance confidence in financial reporting by providing objective assessments, even when their findings may be uncomfortable for management or other stakeholders. He said this independence strengthens corporate governance frameworks and reinforces public trust in institutions.
He warned that preserving auditor independence is becoming increasingly challenging due to workplace relationships, organisational pressures and personal biases that can compromise objectivity.
He maintained that auditors must continuously demonstrate professional scepticism, self-awareness and the courage to resist inappropriate influence in order to safeguard the integrity of the audit process.
A former President of the Institute of Chartered Accountants of Nigeria ,ICAN, Doyin Owolabi urged audit committees to become more proactive in preventing fraud and identifying financial reporting errors before they escalate into major governance failures.
Presenting a paper titled Gate-Keeping: Detecting Error and Fraud in Financial Reporting, Owolabi said effective audit committees must remain well-informed, vigilant and responsive to evolving business risks.
He explained that committee members should rigorously interrogate management’s assumptions and ensure that financial statements present an accurate and fair representation of an organisation’s financial position
According to him, internal auditors also have a critical responsibility to continuously evaluate the effectiveness of internal controls, governance structures and reporting processes to minimise the risk of material misstatements.
Similarly, Partner, Assurance Services at EY Nigeria, Williams Erimon said audit committees must move beyond their traditional role of reviewing financial reports and become active custodians of corporate integrity.
He stated that effective oversight requires committee members to challenge management’s assertions, critically examine underlying assumptions and insist on verifiable evidence before approving key financial decisions
He added that audit committee members must possess the competence, courage and resilience needed to anticipate emerging risks and respond decisively in protecting the interests of organisations and stakeholders.
On the importance of internal audit, former Chief Audit Executive of the Nigerian Institute of Management and West African Portland Cement Company ,WAPCO, Festus Ogunmokun, warned that weakening internal audit functions exposes organisations to significant operational and financial risks.
Speaking on Internal Audit: Guarding the Truth from Inside, Ogunmokun said several global corporate failures could have been prevented through stronger internal controls and more effective internal audit systems.
He cited the collapse of Enron, the Wirecard accounting scandal and Toshiba’s financial reporting crisis as examples of how weak governance structures and ineffective oversight can result in catastrophic corporate failures.
According to him, internal auditors should not be limited to detecting fraud after it occurs but should play a preventive role by identifying emerging risks, strengthening control mechanisms and promoting ethical behaviour throughout organisations.
He added that internal audit teams must be equipped to identify behavioural red flags, unexplained financial variances, undocumented control overrides and other early warning indicators of misconduct before they develop into major corporate crises.
The experts unanimously agreed that strengthening auditor independence, empowering audit committees and reinforcing internal audit functions are essential to improving corporate governance standards, protecting investors’ interests and restoring public confidence in financial reporting across both the public and private sectors.
