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Sanusi: FG to question CBN external auditors

By on March 9, 2014

Based on the queries raised by the Financial Reporting Council of Nigeria on the Central Bank of Nigeria’s audited financial statements for 2012, the council will summon the bank’s external auditors to provide further clarification, sources familiar with the situation have said.

President Goodluck Jonathan had on February 20 ordered the FRC to conduct fresh investigation into the CBN accounts after the suspension of Mr. Lamido Sanusi as the bank’s governor following allegations of financial misconduct and recklessness on his part.

It was learnt that the external auditors, who signed the CBN 2012 financial reports, would be invited by the FRC to provide answers to many issues raised, especially on the far-reaching queries raised on the audited statements.

“The CBN external auditors, who signed the CBN 2012 audited financial statements, will be required to provide some clarification by the FRC and even by the CBN board as they continue the investigation directed by the Presidency,” an industry source familiar with the situation told our correspondent.

Efforts to reach the Executive Secretary, FRC, Mr. Jim Obazee, for comments failed.

But experts in financial accounting, auditing and tax have expressed their opinion over the possible outcome of the investigation.

Some industry experts are of the opinion that if the CBN or Sanusi is indicted at the end of the investigation, the bank’s external auditors may also be culpable except they had made certain observations in the management report/letter attached to the audited financial statements.

The Chief Executive Officer, F. O. Orogun & Co., an accounting and forensic auditing firm, Mr. Felix Orogun, said the external auditors would have put their observation under a management report attached to the audited financial statements.

Orogun said details of the CBN’s audited financial statements for 2012 had yet to be seen by him and, as such, it was impossible to conclude that the auditors did not carry out their duties transparently and professionally.

He said, “The various infractions alleged against the CBN under Sanusi carry penalties. However, we have yet to see the details of the findings of the audited financial statements. The auditors must have written their detailed findings on each of those issues raised and may have even advised the board if need be.

“The auditors would also have written a management letter attached to the audited financial statements. If there was misappropriation of funds or some infractions, the management letter will state who should be held responsible for what. The government or investigating bodies may need to call for such management letter.”

Orogun, however, blamed the Federal Government for not acting on the alleged infractions since last year, saying it would be difficult for the international community not to believe that it was witch-hunting Sanusi for raising issues about missing oil revenue.

He said, “The various infractions carry penalty. However, for chartered accountants, we comment when we have the financial statements with us. But I want say that some of those alleged infractions, including the extra budgetary spending, are not new. When the CBN even donated some amounts to some people last year, the government did not say anything.

“The Federal Government acting now will make it to look as if it has to do with some issues Sanusi raised over the alleged missing oil revenue,”

Orogun said Sanusi should have been allowed to go on terminal leave before the government would appoint forensic auditors and ask others institutions to look into the CBN accounts and come up with findings.

The Chief Executive Officer, Frantivic & Associates, an accounting, forensic auditing and tax advisory firm, Mr. Remi Oyekola, said the FRC had the right to examine the financial statements of the CBN and other parastatals in the public sector as well as multinationals.

Hence, he said the agency had the power to compel organisations to meet with the standards.

On the allegation of tax evasion by the CBN workers, Oyekola said it would be difficult to blame Sanusi except he had in a way caused it.

He, however, quickly stressed that the liability of tax evasion was on the employer, adding that the CBN was meant to ensure that its workers paid appropriate taxes.

 

[Punch]

2 Comments

  1. Olusegun Oke

    March 9, 2014 at 6:48 am

    …and same external auditors will be used to audit NNPC

  2. BlackieUmukoro

    March 9, 2014 at 2:27 pm

    Contradicting statements indeed. Orogun veered off when he talked of witchhunting. Is there a particular time frame within which the FG was supposed to act on the audit report? The onus of PAYE tax is on the employer and not the employee, therefore Oyekola also goofed. They are protecting Sanusi and abandoning the weightier issues of gross financial recklessness