The much anticipated report of the forensic audit of the Nigerian National Petroleum Corporation, NNPC, operations on the missing $20 billion oil money may not amount to much after all, with PricewaterhouseCoopers, the audit firm that conducted the probe, saying it cannot vouch for the integrity of its findings.
In a startling introductory letter addressed to Nigeria’s Auditor General, the audit firm said findings in its 199-page report were limited to available information and did not constitute a review in accordance with generally accepted standards.
“The procedures we performed did not constitute an examination or a review in accordance with generally accepted auditing standards or attestation standards,” the firm said.
“Accordingly, we provide no opinion, attestation or other form of assurance with respect to our work or the information upon which our work was based,” it added.
The report and all accompanying deliverables, the company pointed out, were “solely for the Office of the Auditor-General for the Federation, for their internal use and benefit and not intended to, nor may they be relied upon, by any other third party.
The firm concluded that the NNPC should refund to the government a minimum of $1.48 billion of missing oil funds, a figure many Nigerians believe is smaller than the likely actual figure.
The report however gave no strong and independent opinion of its findings despite saying the investigation was carried out using forensic techniques.
The firm instead listed a series of potential factors that could render its findings implausible, saying it had no access to the full account of some relevant agencies like NPDC, the upstream petroleum industry subsidiary of the NNPC.
The firm said where it lacked data, it turned to details of earlier investigations carried out by the Nigerian Senate, which all but cleared the NNPC, and the petroleum ministry of any wrongdoing.
“We did not obtain any information directly from NPDC, but in accordance with NPDC former Managing Director’s (Mr Briggs Victor) submission to the Senate Committee hearing on the subject matter, for the period, NPDC generated $5.11billion (net of royalties and petroleum profits tax paid),” the firm said.
PricewaterhouseCoopers also said without an independent legal opinion, it relied on the legal advice of the Nigerian government’s Attorney General (AG) on the subject of the transfers of various NNPC (55%) portion of Oil leases (OMLs) involved in the Shell (SPDC) Divestments which impact crude oil flows in the period.
“The AG’s opinion indicated that these transfers were within the authority of the Minister to make. Thus, these assets were validly transferred to NPDC. The same AG’s Legal Opinion also indicated that NPDC was to make payments for Net Revenue (dividend) to NNPC, which should ultimately be remitted to the Federation Account,” PwC said.
Still, the PwC said that although it reviewed documents submitted by the key parties involved, its work was conducted independently, with its findings based on the review of documentation, analytical reviews of data, and interviews conducted.
The firm said with the exception of the Deputy Group Managing Director/ Group Executive Director Finance and Accounts of NNPC, the Auditor-General for the Federation, and the Minister of Petroleum Resources, it did not discuss the findings of the report with anyone.
It is not clear for how much the Nigerian government hired the audit firm that has now delivered a report which it said should not be relied upon by Nigerians and the global community. Click to signup for FREE news updates, latest information and hottest gists everyday
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Don't worry about the report... the truth would come out after 29th May. At least they now have option of Kirikiri or Kuje prison. GEJ would get the normal house arrest.
ReplyDeleteI love Audit firms with their disclaimers. I am sure GEJ did not review the report before ordering the release for public review. We are waiting, over 40,000 Chartered Accountants (ICAN) only.
ReplyDeleteReview will be excellent.
It is a digress that a world acclaimed accounting firm could rub itself in a mud by saying That "it cannot vouch for the integrity of its findings". My question is; why were you hired and paid for? why could you not make this accession earlier? PwC Nigeria is trying to bring this great company to shame.
ReplyDeleteAn audit firm is not an investigation body, but work based on facts presented to it. If, as claimed by the audit firm that it worked based on facts given it by NNPC only, then the possibility that NNPC may have furnished the audit firm with incorrect figures. So the audit firm cannot be held responsible for any discrepancy resulting from a future discovery of figures different from what it had access to.
DeleteDid they just conclude the report? Or is this a last minute disclaimer to be free from liability since GMB has decided to look into the matter. Am sure the PWC got compromised under the thought that the report will just be a make believe. A sincere audit firm will not continue if they are not given access to the account in question. If you have ever seen an audit firm work, you will know they are more powerful than the military police or Nigerian president. What a shame. The all mighty respected PWC compromised. My teacher once said that "if an angel is brought to Nigeria, he would be corrupted within the shortest time". How true.
DeleteWhich way Nigeria. why this now, what is the essence of this report when its integrity was not ascertained. Who even gave or approved this assignment?
ReplyDeleteWe need Sanusi. If he agrees, we can approve one year sabbatical for him to come sort out NNPC. He can then go back to emir-ing. Lol
ReplyDeleteI think the audit firm was right in its declaration. From the article above it is clear that the company had no independently varifiable data rather relied on a secondary data to its job. Therefore, it makes logically sense to state that the findings may not be vouch for because the data afterall may not be reliable. For me I will blame the government for not providing proper information to the auditing firm. I believe it was intended for a cover up.
ReplyDeleteThat is it!! No blame on the audit firm. The government and NNPC brought in this firm, gave it wrong figures to work on and that may be one reason why the report wasn't being released only until now that a second look into the missing money has come up.
DeleteSTEALING IS NOT CORRUPTION, WHY PROBING GEJ?
ReplyDeleteI am an accountant and I understand the content of the disclaimer. You need to understand the difference between review engagement, statutory audit and forensic audit. The last involves a lot of analytical review and may not discover all anomalies. So I know where PwC is coming from. But I can assure you that if $20m is actually missing, even the simplest audit procedure would have detected it. I work for a big 4 accounting firm and we are a strong competitor of PwC. I think the result of their work is commendable. Get one thing straight, $20b could have been siphoned in other ways that may not appear illegal. Once the documentation are in place and business case appears reasonable, an audit will not pick it as a fraud. I'm only saying their must have been a strong cover up that no amount of time would uncover. They may be in small amounts or little expenses but definitely not unremitted income. We need Sanusi to speak on this once more as it appears to me that nothing is missing!
ReplyDelete$20b missing. Which other means will not be revealed from an account? Or were they ignorant of what was required from the audit or the reason fir calling fir it? You are not an accountant. Any smart firm will not get involved in this kind of misguided audit that will tarnish s reputable firms reputation.
DeleteSo Buddy are you telling me that PwC should have done statutory audit instead of forensic audit? I have worked with 3 of the big 4 as a customer I mean. When they are on sight, the atmosphere in the office building is never the same.
DeleteThe accountant up there made a great point. If there are documentation in place to cover the missing money audit can not find any thing. My concern is; why is it possible that PwC had access to NNPC accounts but not it's daughter company NPDC.
The bottom line is NNPC is an elephant or PIPE C in Nigeria economy and needs to be reformed. Again Sanusi may also come out and point to the actual account he thinks that the money have gone missing.
My point is given the allegations of fraud,whether u use statutory or forensic audit, both method are looking out for fair and accurate representation of the firm's financials nd transactions through examination of records . PWC should have seen it coming. I think they were willing to compromise for the cash, client and assurance that the report only needed their good will and the rest is business as usual. Cos how can you say you have audited a firm wen you know the issues on ground and what you need to draw up a conclusive report are not at ur disposal? No they went ahead only to write a disclaimer now that its clear it wont be business as usual, Jona did not return elected, nd GMB wants to look into it. And they no that their report will be image damaging to them in all ramifications.
DeletePWC is talking rubbish. A huge organ like NNPC must have procedures, controls and QA/QC. If Sanusi has documents that xyz qty of crude was exported, what is the procedure in place for the cash receipt. I mean the simple debit and credit. PWC cannot talk of not expressing their opinions. At least, they can qualify it. They are aware of the principal reasons of the audit. If something is missing, then investigate the procedures in place. Someone must have bypassed procedures for such huge sum to disappear. But I think the money wasn't stolen. Unless, the audit/control dept went to sleep or bribed or pwc showed incompetence. Forget the size of pwc, they can still make one embarrassing error
ReplyDelete