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The Financial Reporting Council of Nigeria (FRC) has cautioned auditors against compromising their independence as artificial intelligence (AI) transforms audit processes, stressing that technology should strengthen professional judgement rather than undermine the ethical principles of the profession.
The Executive Secretary of the FRC, Dr Rabiu Olowo, gave the warning in Ikeja, Lagos, at the 2026 Audit and Assurance Leadership Summit, themed “Audit Integrity in the AI Era: Independence, Accountability and Reliable Financial Reporting.”
Olowo said AI is reshaping the way financial information is generated, processed, analysed and reported, with auditors increasingly adopting machine learning, predictive analytics, data analytics and continuous auditing tools.
He noted that these technologies could enable auditors to examine significantly larger volumes of financial data, improve fraud-risk assessments, increase audit efficiency and generate deeper insights during the assurance process.
However, he warned that greater reliance on technology also introduces risks, including inaccurate or manipulated data and cybersecurity vulnerabilities.
According to him, auditors must maintain professional scepticism and should not blindly accept outputs generated by sophisticated AI systems simply because they appear technologically advanced.
AI must not weaken audit independence
Olowo also expressed concern about practices that blur the line between preparing financial statements and independently auditing them.
He said such arrangements could create self-review threats, compromise auditors’ objectivity and ultimately weaken public confidence in financial reporting.
“Let me therefore emphasise this point very clearly, that audit integrity cannot exist where independence is compromised. Technology must never become an excuse for weakening the fundamental ethical principles of the profession,” he said.
The warning comes as businesses and professional service firms increasingly integrate AI into financial reporting, risk assessment, fraud detection and audit procedures.
While the technology can improve the speed and scale of assurance work, the FRC stressed that accountability for audit conclusions must remain firmly rooted in professional standards and human judgement.
Credible reporting critical to economic growth
In her keynote address, the Minister of Industry, Trade and Investment, Dr Jumoke Oduwole, said reliable financial reporting remains essential to investment decisions, lending, policymaking and broader economic development.
Oduwole, who was represented by the ministry’s Permanent Secretary, Dr Chris Osa Isokpunuwu, acknowledged the opportunities AI presents for financial analysis, risk management, fraud detection, internal controls and auditing.
She, however, stressed that adoption of the technology must be accompanied by appropriate human oversight.
“Technology may change the tools of assurance, but it must never change the principles upon which assurance is built. Integrity, independence, professional scepticism, transparency, and accountability must remain at the centre of the audit profession,” she said.
Regulator expectations and the audit gap
A former FRC Director, Dr Iheanyi Anyahara, highlighted another challenge confronting the profession: the gap between public and regulatory expectations of auditors and the requirements contained in professional standards.
Speaking during a panel session titled “Closing the Audit Expectation Gap: Restoring Public Trust and Strengthening Accountability,” Anyahara said professional standards should serve as a guide rather than being interpreted simply as the minimum or maximum level of work expected from auditors.
He noted that regulators sometimes expect auditors to go beyond the specific requirements of professional standards, creating additional pressure within the profession.
According to Anyahara, this can place auditors in difficult positions when they question why they should be required to perform additional procedures after already complying with established standards.
The discussions at the summit underscored the need for the audit profession to adapt to technological change without losing sight of its core principles of independence, integrity, accountability, professional scepticism and reliable financial reporting.
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