Nigeria audit committees urged to challenge management assumptions
Corporate governance experts in Nigeria are urging audit committees to adopt aggressive oversight roles, a shift investors should watch as a critical guard against emerging market fraud risk.
At a recent Audit Committee Conference in Lagos, leading Nigerian accountants and an EY partner warned that corporate boards must abandon passive reviews of financial statements to prevent misstatements and fraud. The warnings come as investors increasingly scrutinise emerging market governance frameworks.
Doyin Owolabi, former president of the Institute of Chartered Accountants of Nigeria, argued that gatekeepers must ensure reports reflect economic reality rather than merely ticking compliance boxes. “Audit Committees, in particular, must demonstrate informed oversight and vigilant questioning to reduce the likelihood of misstatement,” he said.
Williams Erimona, a partner at EY Nigeria, told delegates that committees need to act as active navigators rather than rubber stamps. “The audit committee as guardian of truth must shift from passive reviewer to active navigator,” Erimona said, stressing the need to interrogate management assumptions and ground oversight in evidence.
The conference also highlighted the systemic risk of sidelining internal auditors. Festus Ogunmokun, former Chief Audit Executive of West African Portland Cement Company, pointed to global scandals to illustrate the financial cost of weak internal controls. He noted that internal audit marginalisation “cost Enron $60 billion in market capitalisation, led to the missing of 1.9 billion euros by Wirecard, and the concealing of $1.2 billion for years in Toshiba.”
Ogunmokun stressed that internal teams must move beyond merely catching errors after the fact to actively preventing them. He said they require “investigative acuity to see what has already gone wrong and what is going wrong,” alongside a mandate to spot unexplained variances and repeated control overrides before they escalate.
Iheanyi Anyaghara, founder and chief executive officer of Regulatory Compliance Readiness Advisors Limited, warned that technical competence is useless without strict objectivity. “Without independence, assurance collapses into affirmation and oversight becomes a ritual,” Anyaghara said. He noted that true independence anchors public trust and allows auditors “to speak truthfully when truth is contested or inconvenient.”
For foreign investors navigating Nigerian equities, the consensus signals a push within the local profession to elevate corporate governance standards. The extent to which these internal checks are genuinely empowered will remain a key determinant of reporting reliability.
