An analysis conducted by InfoStride News has unveiled that twelve publicly listed commercial banks disbursed over N87.1 billion to audit, consulting, and various professional service firms between January and September 2023. This figure represents a notable 44.9% increase compared to the N60.1 billion spent during the same period last year.
Breaking down the data, audit costs accounted for N5.87 billion, while professional and contract expenses totaled N81.2 billion. In the banking industry, the engagement of accounting firms as auditors is a mandatory practice aimed at verifying the accuracy of financial records. This statutory requirement ensures that a company’s accounts provide a fair and accurate depiction of its current financial position as of the balance sheet date.
Although numerous accounting firms operate in Nigeria, the lion’s share of such services typically goes to the Big 4 firms—PWC, KPMG, Deloitte, and EY. Additional findings from InfoStride News indicate that all publicly listed commercial banks on the Nigerian Exchange Group (NGX) avail themselves of the services of one of these Big 4 firms.

On professional fees, encompassing legal, consulting, tax, financial and risk advisory, as well as technologically driven professional services, banks incurred a total of N81.24 billion during the review period. This is a substantial increase from the N55.64 billion recorded in the corresponding period of 2022. While these fees are not mandatory, they constitute a significant portion of banks’ non-operating expenses.
Banks often engage law firms for representation in litigations, a common occurrence in Nigeria due to stringent industry regulations and the inherent risks associated with managing public funds. For example, Zenith Bank, in its 2022 Audited results, reported involvement in litigations amounting to N967 billion claims, necessitating collaboration with internal and external legal experts. Union Bank, in its 2022 results, disclosed litigations with contingent liabilities reaching N1.5 trillion, requiring legal advisors to contest the claims.
Prominent law firms in Nigeria’s corporate landscape, such as Aluko & Oyebode and Bloomfield LP, play crucial roles in providing legal services to banks. Additionally, some of the Big 4 firms extend their offerings to include legal services for clients.
Apart from legal services, banks allocate professional fees for consulting in areas such as HR and strategy, Mergers and Acquisitions, capital raising, risk advisory, and technology products. These professional services are integral to the seamless operation and expansion plans of banks.
Noteworthy consulting firms in Nigeria, including McKinsey and Company, Andersen, and Phillips Consulting, contribute to the banking sector by providing specialized services. Outsourcing to professional service firms enables banks to focus on their core banking functions while delegating other responsibilities to specialized firms.
Due to the lucrative nature of the audit and professional services industries, competition within this space has intensified in recent years. Professional service firms actively pursue major clients, making the landscape highly competitive.
Examining banks’ expenditure breakdown, United Bank for Africa (UBA) emerges as the highest spender, reporting N943 million in audit fees and N35.86 billion for contract services in its nine-month 2023 financial statement. FBN Holdings, the group company of First Bank, incurred N11.61 billion in professional services costs during the review period, although it did not provide details on its current audit spending as the report is unaudited.
Based on available data, the top audit spenders thus far are Access Holdings and GTCo, with N1.52 billion and N1.09 billion, respectively. This aligns with expectations, considering that both banks adopt a Holding company structure, managing a more extensive range of assets across various subsidiaries and sub-sectors.
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