Big Four: A Look At The Auditors Earning Billions From Nigerian Banks

The four biggest global audit firms earned a whopping N6.13 billion from 11 Nigerian banks as audit fees for 2020, a review has shown.

The big four are PricewaterhouseCoopers (PWC), Deloitte, KPMG and Ernst & Young.

Data from banks’ corporate reports show that the amount was earned as the cumulative audit fees of 11 Nigerian banks including Zenith Bank, Guaranty Trust Bank, Access Bank, Stanbic IBTC, First Bank, UBA, Union Bank, Fidelity, Sterling, First City Monument Bank and Ecobank.

The four companies handled most of the bank audits. A fifth firm, Grant Thorton, audited at least one bank.

The auditors likely made more money auditing banks as figures in this report reflect only those highlighted in the banks’ financial reports. Those not published, alongside services retained by unquoted banks, are not covered.

Auditors are financial professionals who are responsible for reviewing and evaluating corporate organization’s records to ensure accuracy, honesty and compliance. The financial auditors perform either internal or external audits.

An audit can be conducted quarterly, bi-annual, and annual and auditors must be changed at least every 10 years to conserve auditors’ independence.

The data analysis by PREMIUM TIMES shows that PwC received the highest earnings of N2.98 billion from auditing three of the big five Nigerian banks called FUGAZ (FBNH, UBA, GTB, Access Bank and Zenith Bank).

PwC earned N786 million from Zenith Bank, N 1.179 billion from Guaranty Trust Bank and N1.017 billion from Access Bank.

KPMG was next as the audit firm earned N1.33 billion from two commercial banks, Stanbic IBTC and First Bank. The firm earned N950 million from First Bank and N376 million from Stanbic IBTC.

Ernst and Young (E&Y), another of the big 4, also earned N1.15 billion auditing 3 banks out of the 11 banks on the list namely; Fidelity, UBA and Union Bank.

The firm earned N200 million from Fidelity, N773 million from UBA and N179 million from Union Bank.

Deloitte in its case generated N674 million from two commercial banks: Sterling Bank and First City Monument Bank. Sterling Bank paid Deloitte N250 million for its audit services, while the company earned N424 million from First City Monument Bank.

EcoBank did not indicate how much it paid its auditors, Deloitte and Grant Thornton.

PricewaterhouseCoopers (PwC).

Operating in Nigeria since 1953 through its predecessor firms of Coopers & Lybrand and Price Waterhouse, PwC is a network of firms in 157 countries with over 276,000 people.

Based in London, United Kingdom, PwC offices around the world recorded a gross revenue of $43 billion as of June 2020.

The firm ranks as the second largest professional services firm in the world, which makes it one of the “Big Four.”

It renders assurance, advisory, tax advisory, tax controversy, strategy consulting, data & analytics, management consulting, financial advisory, actuarial and legal services.

Considered the largest provider of professional services in Africa with close to 400 partners and over 9,000 people in 34 countries, PwC has over 1000 staff and 31 resident partners within Nigeria with offices in Lagos, Abuja, and Port Harcourt.

It is committed to serving as a force for integrity, good sense, and wise solutions to the problems facing businesses and the capital markets.

PwC gives its staff the choice between gaining ICAN or ACCA qualifications.

Among the 11 listed banks on the Nigerian bourse, PwC topped as the highest auditor in terms of the amount received.

Deloitte & Touche

Deloitte is the largest professional services network in the world by revenue and by the number of employees. In 2020, it generated an aggregate revenue of $47.6 billion.

Founded in London, UK, Deloitte provides audit, consulting, financial advisory, risk advisory, tax and legal services with approximately 330,000 people in 150 countries.

Deloitte & Touche is Nigeria’s oldest indigenous accounting firm and the Deloitte Touche Tohmatsu Limited (DTTL) member firm in Nigeria was established in 1952 by Akintola Williams, regarded as the first African to qualify as a chartered accountant.

KPMG

Based in the Netherlands, KPMG is a network of firms in 147 countries, with over 219,000 staff and partners, its line of services are financial audit, tax, and advisory.

In 2020, KPMG ranked 32nd on the Fortune list of 100 best companies to work for, after ranking 36th in 2019 and 29th in 2018.

In July, the UK regulator ruled that KPMG’s bank audits needed improvements for an “unacceptable” third year running.

KPMG was appointed as the external auditors of FBN Holdings in April 2020, replacing PWC that had served as the bank and the bank’s holdings’ auditors for eight years and 10 years respectively.

Ernst & Young

With its headquarters in London, UK, E&Y is a multinational professional services firm that primarily provides assurance, tax, consulting, and advisory services to its clients.

Founded 32 years ago, after the merger of Ernst & Whinney and Arthur Young & Co., it has 280,00 employees in 150 countries around the world.

In 2020, E&Y ranked third on Accounting Today’s ranking of the top 100 accounting firms based on their revenue in the U.S. The firm generated $15 billion in its last reported fiscal year.

In Nigeria, it offers professional services through teams drawn from a pool of 25 partners and over 410 professional staff with diverse and specialised skills.

Grant Thornton

By revenue, Grant Thornton is the world’s seventh-largest professional services network of independent accounting and consulting member firms. It provides three main services: assurance, tax and advisory to privately held businesses, public interest entities, and public sector entities.

The UK- based firm, which has revenues in excess of $1.95 billion, operates in more than 140 countries with over 56,000 persons in its network.

Grant Thornton and its member firms is a separate legal entity. Its services are delivered by member firms.