From Cyriacus Nnaji, Lagos
It is now obvious that the inability to empower Internal Auditors is a sign of lip-service to anti-corruption fight in Nigeria.
Noble Patrick Onwura Nzechukwu; Pioneer President/Chief Executive Officer (CEO), Society for West African Internal Audit Practitioners (SWAIAP) made the disclosure at the 2nd Induction, Fellowship, and Honorary Fellowship Awards of the Society which took place at the Lagos Airport Hotel, Ikeja on 3rd December, 2022.
He said “You will agree with me that the inability to carry out reforms in the internal auditing is a deliberate act to continue to perpetrate the existing lacuna in our conduct of governance. So for me I will say yes, it is deliberate attempt from the government.”
The theme of the event was “Internal Auditing, Tool to Effective Risk Management, Governance, Control and Compliance and a Panacea to Hydra-headed Corruption Menace.”
Other topical issues discussed at the event include Sustaining internal controls, risk management and business continuity in the public and private sectors; the Auditors’ role, Building an effective internal audit function in the public and private sectors, and Accelerating the pace of innovation and transformation in the internal audit space.
Responding to the question dealing with a situation where the expectation of the management of an organisation runs contrary to the role of the internal auditor, he said, “He who pays the piper dictates the tone, you cannot go contrary to the position of your employer, except you want to lose your job. So there are two options left for you, either you dignify yourself by leaving the employment or you get your report done. As a professional auditor, this is the position of the standard in this instance, and if the government or the employer choses to do otherwise, then they should sign and take the risk, but the internal auditor should absolve himself. He should not because of what he would eat and soil his hand, I don’t encourage that.”
Nzechukwu said though the job of the internal auditors is diverse, an ever knowledgeable agent, serving the purpose of every functional area of any organization and adding values to them, the internal auditors are seldomly appreciated both in the private and public sectors. In some quarters, it’s either they’re relegated to the background as inconsequential or they are seen as overzealous and overbearing fault-finder.
According to the association’s helmsman some of the challenges of the internal auditor include a serious lack of internal audit education and training. He also said “Accounting background has been seen as the most important requirement for entry into internal auditing work. However, such requirement does not provide internal auditors with the knowledge of adequate analytical tools necessary for carrying out their professional responsibilities as internal auditors; Lack of management awareness of the functions and contributions of internal auditing; the absence of relevant professional organization(s) to carter for the professional development of internal auditors in the country for a long time. This particular constraint has made it possible to stuff internal audit functions in West Africa, Nigeria in particular, with half-baked internal auditors. The existing foreign based professional bodies train only but a handful of the professional assurance providers due to their exorbitant fees usually charged in USDs, which puts more pressure to our forex and further depletes our foreign reserve.”
Nzechukwu disclosed his contributions towards ameliorating the challenges, improvement, progress and acceptability of internal auditing in Africa in general and Nigeria in particular. “In 2010 when I took up a job as the Head of Internal Audit, I decided to improve on the internal audit department but I could not see any textbook on internal auditing in any bookshop in Lagos. It was then it done on me that throughout my tertiary education and preparation for professional exams as a Chartered Accountant, we were not taught Internal Auditing, so I decided to write a textbook on internal auditing to close the gap. In 2011, I started writing the book on internal auditing and completed it in 2016. By November, 2016, the global edition named “A to Z of Internal Audit Practice” was published in Florida, United States of America. Later in in 2018, West Africa edition with the name “A to Z of Internal Audit Practice” was published in Lagos, Nigeria.
“In-between writing the textbook in 2013, I decided to draft a Bill on Internal Auditing because so many identified inhibitions in the practice of internal auditing in the country. So, I came up with this Bill christened, NIGERIAN INTERNAL AUDIT PRACTICE, REGULATORY & ADMINISTRATION AGENCY & OTHER RELATED MATTERS BILL, 2013. I have sent copies of the Bill to both Presidency and National Assembly since 2017 after failure to secure sponsors from professional bodies,” Nzechukwu stated
He stated that the birth of the SWAIAP was as a result of dearth of professional internal auditing and assurance professionals in general. He said that “As a result of dearth in professional internal auditing and assurance professionals in general, I floated a body called West African Internal Auditors Forum (WAIAF) in 2017, and decided to invite professional colleagues to be part of it. This body metamorphosed into today’s Society for West African Internal Audit Professionals (SWAIAP) in 2018 with a vision to institutionalize internal auditing in West Africa as a foremost tool for preventing corruption, improving business processes and performance and mitigating to the barest minimum of all forms of financial and non-financial risks in both private and public sectors,” Noble Nzechukwu added.
The SWAIAP President disclosed that 16 people received fellowship awards; 7 Honorary Fellowship Award; 14 Certified Inductees; 3 Associate Inductees; and 2 Academic Excellence Award.
The Registrar/Chief Executive of the Institute of Chartered Accountants of Nigeria (ICAN), Prof Ahmed Kumshe spoke on the Role of Internal Audit, Challenges Mitigating the Effectiveness of the Internal Auditors’ Role, Overcoming the Challenges, Benefits of Good Internal Audit and The Role of Internal Auditors in Sustainability Reporting.
Finally he concluded with Internal Audit’s Role in Promoting Sustainability Reporting and Climate Change, adding that “Leaders in business and government are increasingly realising the importance of Environment, Social and Governance (ESG) as an enterprise imperative: Organisational wellbeing is tied not only to financial strategies and metrics, but also to those that reflect environmental, social and governance aspects. This holistic approach is indispensable to long-term value creation. Therefore, strategic planning, risk management, and all related assurance must incorporate all four dimensions.
“The ability of organisations to do this depends on the design and effectiveness of internal control around accounting reporting and communication of information. Applying the same systematic rigor to measuring, validating, managing, and reporting material sustainability information that is typically applied to financial reporting should lead to greater corporate and investor/stakeholder confidence, organizational value, and capital markets’ effectiveness,” he stated.
Andrew Ogochukwu Onwudili, PhD, Acting Auditor General for the Federation (OAuGF) delivered a paper on Building an Effective Internal Audit Function in the Public & Private Sector. He spoke on the meaning of Auditing; Classification of Audit (Internal and External Audit); Forms of Audit in the Public Sector; Internal Audit (Compliance with standards, Internal Audit Charter, Code of Ethics of the Internal Auditor and Independence of Internal Audit); Extant Laws and Regulations that support internal audit in Nigeria (Internal Audit Function defined by FRC of Nigeria); Reports of Internal Audit; Risk-Based Function; Accounting System, (Records to be checked by Internal Auditor); Review of Financial Statements (Use of Internal Auditors’ work by External Auditors); Control Environment (Internal Control System and Role of Internal Audit)
He said Auditing is an independent examination or exercise aimed at providing assurance that controls, programmes, projects, activities; among others, adding that Audit is not related to financial statements alone. When it relates to financial statements, it seeks to provide assurance to stakeholders (other than the preparers) on whether financial reports are true and fair and reflect balances in books of accounts and whether those books were properly kept and up to date; adding that the objective of an audit is to either express an opinion on financial statements or to give an assurance about a programme, an activity or whether a project was executed according to plan among others.
He said that to build an effective internal audit function, the management and the internal auditors must be ready to carry out their roles, efficiently, effectively, and for the common good of the citizens/owners of the business.
He concluded by stating that the Internal Auditor has a duty to safeguard the assets of an entity and to promote operational efficiency and should have zero tolerance for the override of internal control by the management.
Internal Auditors, he said, need to scale up their functions by increasing their knowledge base and be ready to take on new challenges due to the emerging issues that face the business environments; training and retraining of Internal Auditors should be emphasized in the entities, because that is when they can truly add value to the workplace.
He spoke on “Sustaining Internal Controls, Risk Management and Business Continuity in the Public and Private Sector – the Auditors’ Role’.
Speaking on Internal Control, he stated that it is a system designed, introduced and maintained by the company’s management and top-level executives, to provide a substantial degree of assurance in achieving the business objective, while complying with the policies and laws, safeguarding the assets, maintaining efficiency and effectiveness in regular operations and reliability of financial statements.
Internal control he said, refers to the rules, policies, procedures, tools, and other mechanisms implemented by an organization (private or public) to increase transparency, promote accountability, assure the integrity of financial and accounting information, and reduce the risk of fraud.
An organisation establishes internal controls as a measure against wrongdoing and as a tool to protect the entity’s interests. Internal controls ensure a company complies with federal and state laws and regulations in the management of financial data, adding that strong internal controls can improve operational efficiency and ensure accurate financial reporting during internal or external audits.
