Four of Nigeria’s Tier 1 banks paid a whopping N3.17 billion to two of the biggest audit firms as audit fees for the year ended December 2019. The two big audit firms are PricewaterhouseCoopers (PWC) and KPMG.
According to data from the four banks, the fees were earned by auditing the financials of Access Bank, GTBank, Zenith Bank and United Bank of Africa. The data revealed that the two audit firms increased their earnings by 12.49% year on year after earning N3.17 billion in 2019, against N2.81billion recorded in 2018. The banks under review made a combined N1.90 trillion in revenues for the period.
PWC audits all the accounts of the five top banks in Nigeria, except Zenith Bank, which is handled by KPMG. Findings revealed that while PWC earned N2.28 billion out of the N3.17 billion, KPMG got only N892 million out of the total.
Zenith Bank increased the audit fee of KPMG from N822 million in 2018 to N892 million; GTBank increase its audit fee of PWC from N791.3 million to N857.82 million within the same period; Access Bank also increased the said fee to PWC from N612.97 million to N819.9 million, and UBA also paid PWC the sum of N608 million for audit compared to the N592 million in 2018.
PWC in earned N2.7 billion from its clients (banks only), an increase of about 15% from N2.35 billion in 2016. Auditing six commercial banks, KPMG was next as the audit firm earned N2 billion in 2017, an 15.2 increase from the N1.74 billion received as fees in 2016.
Ernst & Young, in its case generated N415 million from two commercial banks, Fidelity Bank Plc and Sterling Bank in 2017, an increase of about 18.9% from N349 million in 2016.
Meanwhile, commercial banks with large subsidiaries pay more fees to auditing firms as checking of their books involved more assets home and abroad.
For instance, FBN Holdings with various business groups-Commercial Banking, Insurance, Merchant Banking & Asset Management and others paid PWC N856 million in 2017 from N803 million the firm collected in 2016.
Also, PWC earned N712 million from GTBank in 2017 from N596 million in 2016 while UBA paid the same auditing firm N607 million in 2017, an increase of about 24% from N490 million in 2016.
Access Bank paid PWC N529 million in 2017, 15% increase over N460 million in 2016.
Out of the six firms audited by KPMG, Zenith Bank paid the firm highest value in the year under review at N693 million in 2017 from N626 million in 2016, followed by Stanbic IBTC Holdings’ N340 million and FCMB, N324 million in 2017.
Meanwhile, Union Bank paid KPMG N249 million in 2017 from N180 million in 2016 while Wema Bank and Diamond Bank paid the same auditing firm N120 million and N220million in 2017 respectively.