CBN to Enforce International Standard on Auditing Rule in Banks

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By Obinna Chima

The Central Bank of Nigeria (CBN) monday advised all banks and their external auditors to adhere to Rule 9 (Application of International Standard on Auditing (ISA) 701 – (Communicating Key Audit Matters in the Independent Auditor’s Report) of the Financial Reporting Council of Nigeria (FRCN).

The rule requires independent auditors of listed and unlisted entities to comply with the requirements of ISA 701 for audit of financial statements for periods ending on or after December 15, 2016 and June 30, 2017, respectively.

The central bank stated this in a letter titled: “Application of International Standard on Auditing (ISA) 701 (Communicating Key Audit Matters in the Independent Auditor’s Report) in the Banking Sector.”

The letter with reference number: BSD/DIR/GEN/LAB/10/006, dated February 6, 2017, was addressed to all banks and their external auditors.

It explained: “The attention of all banks and their external auditors is hereby drawn to the Rule 9 (Application of International Standard on Auditing (ISA) 701 – Communicating Key Audit Matters in the Independent Auditor’s Report) of the Financial Reporting Council of Nigeria (FRCN) which requires independent auditors of listed and unlisted entities to comply with the requirements of ISA 701 for audit of financial statements for periods ending on or after December 15, 2016 and June 30, 2017, respectively.

“In order to create a level playing field for the implementation of ISA 701 in the Nigerian banking industry, the CBN has obtained the concurrence of the FRCN for external auditors of all banks (both listed and unlisted) to comply with the requirements of the new standard for audits of financial statements for periods ending on or after December 15, 2016.

“Accordingly, the auditors’ reports accompanying audited financial statements of all banks for the applicable periods should be compliant with ISA 701.”
Meanwhile, the central bank in its revised “Guidelines for Direct Debit Scheme in Nigeria 2017,” among other things, stated that payment service providers must be duly licensed by the CBN and subject to electronic payment guidelines.

“The payment service providers shall execute direct debits in line with the instructions on the direct debit mandate. It is the responsibility of the Payment Service Provider to give information, advice and guidance on all aspects of the scheme to the biller,” it added.

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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