The Audit Control Tower on NG and KE engagements
What Achekam's Audit Control Tower checks on a Nigerian or Kenyan audit before the report can be approved, from audit requirement to key audit matters.
By Achekam · · 4 min read · For Accountants & audit firms in Nigeria, Kenya
On a Nigerian or Kenyan statutory audit, much of what can go wrong has nothing to do with the audit evidence. The firm accepted an engagement without a proper acceptance review. The team applied the ISA for LCE where it was not available. A company needed key audit matters in its report and got none. In Nigeria, the FRC Rule 14 confirmation was never sent before the opinion was signed.
Each of these is a jurisdiction-specific question, and each is easy to overlook in the last week of an engagement. Achekam collects them in one place on every Nigerian or Kenyan engagement: the Audit Control Tower.
What the tower covers
On a Nigerian or Kenyan engagement, the engagement page shows an Audit Control Tower with six areas:
- Entity classification.
- Whether company law requires an audit.
- The ISA for LCE.
- An acceptance checklist.
- Regulatory confirmations.
- Sector checklists.
Achekam also works out whether key audit matters are required. Some of these areas hold up approval of the audit report until they are complete.
Whether an audit is required
The first question on any engagement is whether the law requires an audit at all. Here the tower is candid about its limits.
Achekam cannot yet tell a firm whether a Nigerian or Kenyan company is exempt from audit, because the small-company thresholds ship awaiting approval by Achekam's platform administrators.
- Nigeria. The audit-requirement check refuses to conclude on the CAMA small-company exemption until a platform administrator approves its thresholds, and flags every such outcome as uncertain.
- Kenya. The check uses the Companies Act small-company and exemption thresholds only after a platform administrator approves them, and it never decides an exemption on employee numbers alone.
For Kenya, the law itself is clear enough to work from by hand. Under the Companies Act 2015, a company is exempt from audit only if it is small and its turnover is at most KES 50 million and its net assets at most KES 20 million, and public companies, banks and insurers never qualify. Until the tower can conclude, the engagement partner documents that assessment personally.
The acceptance checklist and a second partner
Each engagement's acceptance checklist must be approved by a partner other than the one who prepared it, and until it is, the audit report cannot be approved.
This builds a second partner's view into every acceptance. On a smaller firm, that may mean the managing partner reviews the acceptance of every engagement the other partners take on, which is a reasonable discipline in any case.
Key audit matters: when they are required
Achekam works out whether key audit matters are required on the engagement.
- Nigeria. Under FRC Rule 9, key audit matters are required in reports on listed entities, public companies, banks other than microfinance banks, insurers other than HMOs, mutual funds, pension funds and private holding companies of any of these. If an audit in one of those categories communicates no key audit matter, the auditor notifies the FRC in writing, and Achekam requires that notice to be recorded with evidence before signing.
- Kenya. Key audit matters are required for listed entities.
Where key audit matters are required, the report draft follows ISA 701. How the draft is built and approved is covered in audit reports under CAMA 2020 or the Companies Act 2015.
The ISA for LCE decision
The ISA for Less Complex Entities is treated differently in the two countries.
- Nigeria. A Nigerian firm can use the ISA for LCE only after a documented assessment and a partner's decision. Because the FRC set no effective date of its own, Achekam uses the IAASB's.
- Kenya. Achekam refuses the ISA for LCE on Kenyan audits, because no ICPAK adoption was found. A Kenyan engagement is run under the full ISAs.
For Nigerian firms, the assessment is the important part. Record why the entity is less complex, which matters were considered, and what would make the standard unsuitable, so that a reviewer can follow the reasoning.
Regulatory confirmations and sector checklists
On a Nigerian audit, the report stays blocked until the team records, with evidence, that the FRC Rule 14 confirmation was sent and, where needed, that the FRC was notified under Rule 9. Achekam records these confirmations; it does not send them. The auditor sends the e-mail or notice through the FRC's own channel and attaches the evidence under Engagement > Audit Control Tower > Confirmations.
The tower also carries sector checklists. Work through any checklist that applies to the client while fieldwork is still under way, so that its findings can still shape the audit.
When the tower is clear
With the tower complete, the report itself can move. The engagement team drafts it on standard ISA 700, 705, 706 and 701 wording, approval is refused while any bracketed placeholder remains, and only the engagement partner approves. The partner may approve with papers still open by recording a reason, but a named quality reviewer's clearance cannot be bypassed.
A pre-approval checklist
- Audit requirement assessed, by the partner where the tower cannot yet conclude.
- Acceptance checklist approved by a second partner.
- Key audit matters requirement known, and for Nigerian Rule 9 entities, either matters communicated or the FRC notice recorded.
- ISA for LCE: documented assessment and partner decision (Nigeria) or full ISAs (Kenya).
- Rule 14 confirmation recorded with evidence (Nigeria).
- Sector checklist complete.
The firm's registrations, which the signing checks rely on, are visible in the Regulatory Control Centre.
Open the tower at planning, not at completion. Every item on it is cheaper to resolve in the first week of an engagement than in the last.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
