Audit reports in Nigeria are falsified — Survey

Most audit reports in Nigeria are falsified of the wishes of business owners a Republic investigation has revealed.
According to response to questionnaires on accounting practice and procedures in Nigeria, most respondents are dissatisfied with the behaviour of public accountants in the country.
Audit firms endorse what business owners want reflected in their annual reports. This some auditors disclosed, auditing firms cannot do anything about as they have to please their clients in order to stay in business.
Some of the accountants who revealed the sordid dealings in the accounting procession said some accountants opt for employed jobs to save their conscience from the yearly ritual of having to endorse falsified accounts.
In the words of the accountant, the financial mess the country is today is directly attributable to the malpractices in the accounting profession.
Investigation has revealed that business owners in Nigeria especially the private companies lobby auditing firms to declares loses for them even when the company from available records has made quite some substantial gains. By declaring loses the company escapes from tax laws and have provision for accelerated capital amortisation.
Investigation also revealed that executives of such companies prepare two separate audit report, one for tax purposes showing loses and the other for banks for purposes of obtaining loans – showing profit.
Accounting sources said that some of the managers of these companies when seeking loans ask audit firms to prepare an interim report showing that the company is making progress. Such reports are lodged with banks which in turn grand loans on such falsified information. More often, such loans end up as bad debt due to the inability of such companies to repay the loan.
Tax officials at Lagos Inland revenue sais that they have hint of such information but cannot verify same since the law there is no way they can cross check the correctness of otherwise of information supplied to them by companies.
They argue that in a country like Ghana, there are public audit firms run by government. These firms audit government companies and also examine the account of private companies to ascertain their correctness. In the view of tax officials perhaps such a device might check these practices.
Audit firms who spoke on the issue argued that their customers interest is uppermost in their consideration. Some private companies they argue are scared and if their wishes are not met they simply run away.
Accounting firms in Nigeria is giving audit certificate to companies annual reports states ‚Äúthe balance sheet of the company set out on page X is in agreement with the books and returns. In our opinion, the books have been properly kept and proper returns have been received from branches not visited by us. We obtained the information and explanations we required…. In our opinion, the accounts give a true and fair view of the state of affairs of the company any.‚Äù
This audit expert say is a kind of hollow ritual which in actual fact does not refflect the true position of companies in the country.