Audit Procedure Template for Nigeria

An Audit Procedure outlines the specific steps and methods auditors use to examine financial records, operations, and internal controls within Nigerian organizations. These detailed instructions help ensure thorough reviews that comply with standards set by the Financial Reporting Council of Nigeria and the Companies and Allied Matters Act.

Good audit procedures protect both auditors and companies by creating a clear trail of evidence, making it easier to spot errors or fraud. They typically include tasks like checking bank statements, verifying assets, reviewing transactions, and interviewing key staff members. For Nigerian businesses, following proper audit procedures helps maintain compliance with local regulations while building trust with stakeholders.

Use Audit Procedures during any systematic review of your Nigerian company's financial records and operations. They're essential when preparing for annual statutory audits required by the Companies and Allied Matters Act, or when investigating specific financial concerns like unusual expense patterns or revenue discrepancies.

The procedures become particularly important during major business changes, such as mergers, expansions, or new system implementations. Nigerian regulators expect to see documented audit procedures during tax assessments, SEC filings, and corporate governance reviews. They also provide vital protection when dealing with stakeholder disputes or responding to regulatory inquiries about financial management.

• Audit Program For Inventories: Focuses specifically on stock verification, valuation methods, and inventory control systems. Used extensively in manufacturing and retail sectors under Nigerian accounting standards.
• Audit Test Plan: Provides a broader framework for testing internal controls, financial statements, and compliance with Nigerian regulations. Often used by external auditors and internal audit departments for comprehensive reviews.

• External Auditors: Independent professionals from certified Nigerian audit firms who design and execute audit procedures according to standards set by the Financial Reporting Council.
• Internal Audit Teams: Company employees who develop and implement ongoing audit procedures to monitor internal controls and compliance.
• Financial Directors: Oversee the audit process and ensure procedures align with company objectives and regulatory requirements.
• Department Managers: Provide necessary documentation and cooperate with auditors during procedure execution.
• Regulatory Bodies: Review audit procedures during investigations or compliance checks, including the Securities and Exchange Commission and tax authorities.

• Business Profile: Gather key details about company size, industry, and operational structure to align with Nigerian reporting standards.
• Risk Assessment: Identify high-risk areas and specific concerns that need special attention in your audit scope.
• Regulatory Requirements: Review current CAMA regulations and Financial Reporting Council guidelines affecting your industry.
• Documentation Review: Collect relevant financial statements, internal control documents, and previous audit reports.
• Team Assignment: Define roles and responsibilities for each audit task, including timelines and reporting structures.
• Technology Assessment: List available audit software and tools to streamline the procedure execution.

• Scope Statement: Clear definition of audit objectives, timeframe, and departments covered under Nigerian accounting standards.
• Methodology Section: Detailed steps for evidence collection, sampling methods, and testing procedures aligned with CAMA requirements.
• Risk Assessment Framework: Documentation of identified risks and control measures as per Financial Reporting Council guidelines.
• Reporting Guidelines: Format and frequency of audit findings, including mandatory disclosures under Nigerian law.
• Confidentiality Provisions: Data protection measures and information handling protocols.
• Authentication Block: Signatures of authorized personnel, dates, and official company stamps where required.

Audit Procedures are often confused with Compliance Procedure documents in Nigerian organizations. While both support regulatory adherence, they serve distinct purposes and operate differently within the corporate governance framework.

• Scope and Purpose: Audit Procedures specifically outline steps for examining financial records and operations, while Compliance Procedures focus on ongoing adherence to laws and regulations across all business activities.
• Timing and Frequency: Audit Procedures are typically executed at scheduled intervals or for specific reviews, whereas Compliance Procedures operate continuously as standing guidelines.
• Implementation Focus: Audit Procedures emphasize evidence gathering and verification techniques, while Compliance Procedures outline preventive measures and day-to-day operational standards.
• Reporting Structure: Audit Procedures generate specific findings and recommendations, while Compliance Procedures establish monitoring systems and reporting channels.