You may be familiar with the concept of ‘social compact’. It describes the unspoken agreement we all have with society. Within the realm of finance, this principle underscores the fact that the responsibility for maintaining accurate financial records and reporting on them extends beyond the parameters of auditors.

Yes, auditors are the last line of defence against misstatements and errors, and most of them are doing a stellar job. But let’s not forget the team behind the scenes. From the data processors and bookkeepers to the accountants and financial managers, all the way up to the directors. Everyone has a part to play. While auditors verify the fairness of financial details, boards and committees oversee adherence to appropriate guidelines and standards, and accuracy.

The role of the auditor goes beyond just giving the thumbs up or down in audit reports. They’re also invaluable advisors to their clients, providing feedback through management reports that help improve systems and reporting processes. This guidance isn’t just about fixing what’s wrong; it’s also about strengthening what’s right, helping companies build more robust financial systems for the future. These reports flag not only inefficiencies, but also potential legal transgressions and areas of non-compliance. By pointing these out, auditors help businesses to stay on the right side of the law and build stronger financial frameworks for the future.

At the end of the day, it’s a group effort. Many of us are familiar with the African proverb, ‘It takes a village to raise a child’. The truth is, it ‘takes a village’ to achieve just about any meaningful change, including transparency in financial statements!