Listed commercial banks operating in Nigeria paid an aggregate of N7.72 billion to auditing firms in 2021, which is 25.1% and 36.1% higher compared to N6.17 billion and N5.67 billion spent in 2020 and 2019 respectively. The banks considered in this analysis were Access, GTB, FBN, UBA, Zenith, FCMB, Stanbic IBTC, Fidelity, Sterling, Union, Unity, and Jaiz Bank.
It is a statutory requirement for all publicly listed companies to have their accounts vetted and audited by independent auditors. This is because external auditors examine the bookkeeping records of the companies without the filter of personal relationships, which could cloud their judgment.
Audit firms’ earnings in 2021
PwC received the highest fee from the listed banks in 2021 with N3.17 billion, an improvement from the N2.98 billion received in the previous year. The accounting firm has Zenith Bank, Stanbic IBTC, and Access Bank in its books. EY received a total of N2.45 billion as audit fee in 2021 from Union Bank, UBA, and GT Holding Company. KPMG followed with N1.22 billion with Unity and First Bank in its books, while Deloitte earned N842 million from Sterling Bank, Fidelity Bank, and FCMB.
Another company on the list is Ahmed Zakari & Co, the auditor for Jaiz Bank, which earned N36 million as its audit fee in the review year.
In the last five years, between 2017 and 2021 the firms have earned over N29.5 billion as audit fees from listed commercial banks in the country.
Some of the factors that determine audit fees include the size of the company, the industry in which the company operates, corporate risk, profitability, duration of the audit. amongst others. Nairametrics presents a list of banks in Nigeria based on their audit expenses in the 2021 financial year.
Listed commercial banks operating in Nigeria paid an aggregate of N7.72 billion to auditing firms in 2021, which is 25.1% and 36.1% higher compared to N6.17 billion and N5.67 billion spent in 2020 and 2019 respectively.
Access Bank – N1.69 billion
Access Bank led the list of banks with the highest audit cost in 2021 with N1.69 billion paid to PwC. This is no surprise as the new restructured Holding company also has the largest assets amongst the listed banks. In terms of profitability, Access Bank recorded a 51.1% growth in its profit after tax in 2021 to N160.2 billion as against the N106 billion posted in the previous year.
GT Bank – N1.17 billion
Another newly restructured holding company, GTCo followed with N1.17 billion spent as audit fees in 2021, which is marginally lower than the amount spent in the previous year (2020: N1.18 billion). Its audit expense accounted for 15.2% of the aggregate N7.72 billion by the twelve banks.
FirstBank – N1.15 billion
FirstBank is another with a holding company structure, having subsidiaries across various financial services. FBN Holdings paid N1.15 billion to KPMG as audit fee in 2021, which is 14.8% higher than the N950 million it paid to the same company in 2020.
This is also not surprising considering the size of the company’s balance sheet and profitability in the year under review. Specifically, the company’s total asset base rose by 16.17% to stand at N8.93 trillion as of December 2021 (third-largest bank on NGX). The company also reported a net profit of N151.1 billion in the same year, representing a 68.4% increase compared to N89.73 billion reported in 2020.
Others
UBA – N1.09 billion
Zenith Bank – N1.06 billion
FCMB – N457.1 million
Stanbic IBTC – N422 million
Fidelity Bank – N195 million
-Nairametrics.
