A total of five Domestic- Systematic Important Banks ( D-SIBs) operating in Nigeria paid external auditors N7.35 billion in 2018.
The two external auditors, PricewaterhouseCoopers (PWC) and KPMG, in 2017 earned an accumulative N8.55 billion from the considered banks by our correspondent.
Westernpostnigeria online can exclusively report that leading Central Bank of Nigeria (CBN) Domestic-Systemic Important Banks (D-SIBs), United Bank for Africa (UBA), FBN Holdings, Access Bank Plc and Guaranty Trust Bank Plc (GTBank) are audited by PWC while Zenith Bank was audited by KPMG last year.
Further findings by Westernpostnigeria online revealed that commercial banks with large subsidiaries pay more fees to auditing firms as checking of their books involved more assets home and abroad.
Specifically, UBA in 2018 paid auditors N592 million from N607 million reported in 2017 while FBN Holdings paid its auditor N910million, 6.3 per cent increase over N856 million in 2017.
According to FBN Holdings, N910 million auditors’ remuneration for the group represents the fees paid by the various entities in the group to their respective auditors.
Zenith Bank, audited by KPMG reported N822 million auditors remuneration in 2018, 18.6 per cent increase over N693 million in 2017.
The other two banks audited by PWC, GTBank reported 11.1 per cent in auditors remuneration to N791 million in 2018 from N712.25 million while that of Access dropped to N4.24 billion in 2018 from N5.68 billion reported in 2017.
GTBank in a statement said, “Auditor’s remuneration represents fees for the interim and final audits of the Group and Bank for the year ended 2018.
“The Bank also paid the auditors professional fees in the sum of N31,300,000 for non-audit services (N25,000,000 for IFRS 9 model certification and N6,300,000 for certification of financial covenant with the Bank’s foreign lenders) rendered during the year. These services, in the Bank’s opinion, did not impair the independence and objectivity of the external auditor.”
A chartered accountant explained to our correspondent that auditing firms charges are based on economic realities, stressing that adaptation of International Financial Reporting Standard has aided increased auditing charges in companies operating in Nigeria.
A chartered accountant contacted by correspondent said, audit fees is charged based on the knowledge and skills that an audit firm uses for the process as well as the time taken for the assignment.
According to him, “Fees charged depends on the complexity of the assignment, risk and the time spent on a particular assignment.
“Banks’ audit is very risky and you don’t expect audit firms to send audit assistants. Most of the time such audits will be handled by audit seniors and above. The audit fee for banks will therefore tend to be higher,” he explained.
However, with greater market demand for new technologies and innovation in audit and the increasing demands of the regulatory environment it seems likely that fees will inevitably rise over the coming years.
“Society also seems to be demanding more than what the traditional audit delivers and our clients, together with the profession and the regulator, need to respond to meet this need,” he added.
Shareholders at banks Annual General Meeting (AGM) over the time complained of huge amount banks are paying auditors, calling for effective review.