General Assembly insists on best practices for AIO Auditing firm
The general assembly of African Insurance Organisation (AIO) has insisted on internationally accepted best practice for the 13-year- old auditing firm of the body.
Chief Bode Emmanuel, an elder statesman in the Nigerian insurance industry at the 38th AIO annual general meeting said the reasons for retaining the body’s auditing firm for 13 years was unjustifiable and not in tandem with international best practice.
In an interview with Vanguard in Zimbabwe, Chief Emmanuel said that there should be a change of auditor every three years for an international organisation such as the AIO, stating, “To have the same auditor for 13 years is not in line with international best practice.”
On why members of the AIO waited till this year to raise the issue, he admitted that it was an oversight on the part of the general assembly of the body, stating “Again, it is not good for auditors to come from the same country where the AIO secretariat is.” The AIO secretariat is in Douala, Cameroon and the auditor also is from Cameroon.
Comforted by the acceptance of the AIO executive committee to address the issue by the next AGM, Bode Emmanuel remarked, “I am glad that the executive committee accepted that the matter would be resolved.”
Some experts have argued that auditors may become less skeptical with clients over time, threatening their level of independence while others asserted that long-term audit tenure may actually enhance audit quality. They argue that audit quality is likely to be low with newly appointed auditors, gradually increasing over time as the auditor gains additional experience with the client.
Mrs. Irene Muyenga, a past president of the AIO who also spoke to Vanguard said that the issue of changing only the auditor’s partners every five years was not all there was about the need for change of auditors.
According to her, “If you don’t change the accounting firm, you change the partners so that there is no too much familiarity among them yet you cannot continue to change only the partners without changing the auditor itself. The best practice is to change the partners of five years and at the expiration of the five years, you also change the auditing firm. We didn’t realise that the auditing firm has served the AIO for 13 years until now.”
