a. Manual on Eligibility to Act as an External Auditor

1. Eligibility Requirements for an Auditor:

• Professional Qualification:
  • Must be a member of a recognized professional accountancy body (e.g., ICAN).
  • Hold relevant certifications indicating competency in audit and assurance services.
• Independence:
  • Should be independent of the entity being audited, with no conflicts of interest that may impair objectivity.
  • Independence must be both in fact and appearance.
• Experience and Expertise:
  • Demonstrated knowledge of auditing standards and relevant regulatory requirements.
  • Adequate practical experience to perform audit engagements effectively.
• Ethical Compliance:
  • Compliance with the fundamental principles of the IESBA Code of Ethics: integrity, objectivity, professional competence, confidentiality, and professional behavior.

2. Ineligibility Conditions:

• Connected Parties:
  • Individuals who are employees, owners, or otherwise financially dependent on the entity being audited.
  • Relatives or close associates of the management or owners of the entity.
• Legal Restrictions:
  • Laws or regulations prohibiting certain individuals or firms from acting as auditors for specific entities.

3. Regulatory Oversight:

• Must comply with the provisions of the Companies and Allied Matters Act, 2020, which stipulates qualifications and disqualifications for auditors.
• Firms must also be subject to quality assurance reviews to maintain professional standards.

4. Licensing and Registration:

• The auditor or audit firm must be licensed and registered with the relevant regulatory body (e.g., Financial Reporting Council of Nigeria).

b. Objectives of an Auditor in Accordance with ISA 200

1. Overall Objectives of the Auditor:

• Obtain Reasonable Assurance:
  • To obtain reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error.
• Report Findings:
  • To express an opinion on the financial statements based on the audit evidence obtained.
• Compliance with Standards:
  • Conduct the audit in accordance with International Standards on Auditing (ISAs) and applicable legal and regulatory requirements.

2. Conduct of an Auditor:

• Professional Skepticism:
  • Maintain a questioning mind and critically assess audit evidence, particularly when there are indications of fraud.
• Professional Judgment:
  • Exercise sound judgment in planning and performing the audit and making key decisions throughout the engagement.
• Ethical Compliance:
  • Adhere to ethical requirements, including independence and confidentiality.
• Effective Communication:
  • Communicate clearly with management and those charged with governance, addressing significant audit matters.
• Documentation:
  • Prepare sufficient and appropriate documentation to support the audit opinion and comply with ISAs.