FRC grants ICAN supervisory role on auditing firms

By Cynthia Ezekwe.

The Financial Reporting Council of Nigeria (FRC) has signed a Memorandum of Understanding (MoU) with the Institute of Chartered Accountants of Nigeria (ICAN), which grants ICAN the instrument of delegation to supervise and monitor licensed auditing firms in Nigeria.

The MoU was signed during the courtesy visit of Innocent Iweka Okwuosa, the  59th President of ICAN, to Shuaibu Adamu Ahmed, the executive secretary/chief executive officer of FRC.

According to FRC and ICAN, the signing of the instrument of delegation would bring into effect audit regulation and improve investors’ confidence on financial statements of business entities in Nigeria.

Speaking on the delegation, Ahmed said,  “We signed the instrument of delegation, which has been a sticking point for the past three years, to enable the audit regulation to take effect.’’

The FRC chief executive officer noted that the  audit regulation was enacted three years ago by the federal government to improve the quality of audit work being done in Nigeria, stating that it makes  provision for FRC to monitor and supervise the quality of audit work being done in the country.

“But you know that there are thousands of audit firms in this country and the FRC with its meagre staff cannot supervise thousands of these audit firms. So, with this instrument of delegation, we are now enabling ICAN to help us assist with the supervision of some of these firms,’’ Ahmed added.

The president of ICAN also expressed satisfaction that the institute and the FRC were able to sign the MoU on the delegation of the authority to monitor auditing firms to ensure that they are observing laid down rules and procedures.

“The importance of the MOU is that if you practise auditing, you have to get registered with the FRC. But it is not just the registering that is the issue because you also need to monitor what they are doing. So today’s agreement makes it possible for the FRC to delegate this monitoring and review of audit firms. With that we will be able to check quacks, and be able to make sure that if you hold the licence to practise, you will be doing it in line with established rules, and that marks a very new beginning in accountancy and audit practice in the country,’’ Okwuosa added.

The ICAN president  noted that the economic benefit of the audit regulation is that It will  improve the confidence of investors and increase the flow of capital into the country.