Financial Reporting Council (FRC) accuses Auditors of unprofessional adverts in Clients’ Financial Reports

The Financial Reporting Council (FRC) of Nigeria has accused auditors of unprofessional adverts in Clients’ Financial Reports, FRC said it has noticed with great concern the manner in which external auditor’s logo, brand and other forms of advertisements feature in their clients’ reports.

FRC released the following statement on the issue;

RULE 11: RESTRICTION OF AUDITOR’S LOGO, BRAND AND OTHER FORMS OF IDENTITIES IN THEIR CLIENTS’ ANNUAL FINANCIAL REPORTS

In accordance with Sections 26(e), 30, 46, and 53(2) of the Financial Reporting Council (FRC) of Nigeria, Act No. 6, 2011, the Council hereby issues Rule 11.

1. Rule 11 is intended to set boundaries for advertisement by auditors in the annual reports and financial statements of their clients.

2. Contrary to ethical guidance on auditors’ advertisement, the Council have noticed with great concern the manner in which external auditor’s logo, brand and other forms of advertisements feature in their clients’ annual reports and financial statements year-on-year. In some cases, the auditors’ identities are more pronounced in these reports than their clients’ thereby confusing the entire users.

3. The Council reiterates that the purpose of audit of annual reports and financial statements is to enhance the degree of confidence of intended users and the main role of the auditor in this regard is to express his/her opinion. The Council hereby directs that inputting auditor’s name, logo, brand, or any form of identity on any page of the annual reports and financial statements other than the opinion report pages should henceforth be discontinued, failing which appropriate sanctions shall apply.

4. This notice takes effect from 30th June 2023.

SIGNED: FRC MANAGEMENT
DECEMBER 29, 2022

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