• Tuesday, May 28, 2024
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Risk assessment / risk management and systemic audit failure (2)


Our report card is smeared with the Enron scandal and audit failure which destroyed Arthur Andersen that was arguably the fifth largest accountancy firm in the world. Contrary to what prevailed everywhere else, in Nigeria it morphed into “KPMG”!

All the details are in my book: “X KPMG: All the details are in my book: “X KPMG: Thirty-four years of meritorious service but no gratuity or pension. No Christmas card.”

Nearer home, we had our baptism of fire when Prince Bola Ajibola S.A.N. the Minister of Justice and Attorney-General of the Federation under the Military government of General Ibrahim Badamosi Babangida, insisted that auditors’ reports must be countersigned by lawyers in order to counter the slew of allegations that chartered accountants had signed two different sets of accounts for the same clients for the same period.

Anyway, before the exit of General Babangida, the Institute of Chartered Accountants of Nigeria [ICAN] had a new rival to contend with – Association of National Accountants of Nigeria [ANAN].

We are now in the cusp of history. Our children have been protesting in the streets all over Nigeria (putting their lives at risk) against the impunity and wickedness of SARS (Special Anti-Robbery Squad) – the “terrorist Arm” of the police. Even the daughters of our President and Vice-President endorsed the protests although they did not enter the fray. Be that as it may, SARS has been disbanded and the protesters are entitled to savour their triumph. As sure as night follows day, there will be more protests the subject, nature and dimensions of which are somewhat predictable.

As past Presidents of the Institute of Chartered Accountants of Nigeria, we have been summoned as follows:

“It is rather unfortunate that as our dear country turned 60 on the 1st October 2020, Nigerians are living in the worst time ever. A time of unprecedented challenges most notably arising from the impact of the Covid-19 pandemic, insecurity, corruption, economic recession, youth unemployment and infrastructural decay.

Nigeria’s diamond jubilee is therefore not the time for celebration only. Now, more than ever, we are faced with the need to ensure that the country does not degenerate further. Can we overcome, recover from the current, pressing health, and socio-economic challenges?

Now, more than ever before, the BOPP’s voice needs to be heard on what the future holds for our nation and what emergency actions must be taken to transform Nigeria into a sustainable national economy with comparative advantage in a world where ‘great’ is no longer good enough.”

We have also been reminded that in 1980, Nigeria’s naira rate of exchange was 80 kobo to US 1 dollar but today it is N470 to US 1 dollar.

Our nation is seething with rage but our options are limited – Referendum; Devolution; Restructuring or Revolution.

Our anguish revolves around whether we wait for them to disown us or we make a pre-emptive strike by disowning them first!! They may even ambush us by carefully selecting their next target for protest

To douse the rage and quench the fire are we know to intervene with a demand for ceasefire before matters get out of hand when the next chapter will be defined by the presence of the United Nations Peace-Keeping Force with their special uniforms, badges and white flag?

Then of course, we still have to contend with every parent’s nightmare – the prospects of a showdown with our protesting children. They may demand of us: no more sitting on the fence and offering platitudes while pleading for patience. They may insist on bold and direct confrontation. Are you for us or against us?

Our anguish revolves around whether we wait for them to disown us or we make a pre-emptive strike by disowning them first!! They may even ambush us by carefully selecting their next target for protest: how come the accountancy profession in our beloved country is dominated by only four firms who control 90 percent of the market while the rest have to struggle for the crumbs?

As a former Chairman & Chief Executive of KPMG Nigeria and Chairman of KPMG Africa, I recuse myself.

Fortunately, Professor Wale Adebanwi who is a Nigerian-born first Black Rhodes Professor at St Anthony’s College, Oxford University has proved to be a worthy ally in our endeavour to highlight what is self-evident, namely investment and investors rely on Chartered Accountants to diligently assess risks and manage risks as a critical component of their professional services – to guide them in their strategic investment decisions in terms of destination, spread and component. Safety comes first and last.

Where systemic failure creeps in is when Chartered Accountants are in abundance but are unable to stem the brazen frauds, looting and reckless misalignment of priorities with available resources. Research has adequately documented the competition between the heavy demand for security and other critical areas – education, health, infrastructure etc. Failure by Chartered Accountants to impact on the selection of priorities is the shortest route to abandoned projects in Nigeria, systemic audit failure and ultimately the failed state.

As a postscript, we should reflect on the intervention of Nobel Laurette, Professor Wole Soyinka:

“There must be consequences for such crimes (corruption) otherwise Nigeria will not develop.”

Indeed, the highly respected Pastor Enoch Adeboye, the General Overseer of the Redeemed Christian Church of God has adopted mathematics (in which he obtained a doctorate degree) while side-stepping Pythogoras to proceed directly to quadratic equation as the driving force for his support for restructuring.

Perhaps he should have added that we face the huge challenge of praying for peace in an age when planet Venus the celestial patron of war is on a rampage.

We also have the archaeologists Nikolai Grube and Simon Martin to thank you for reminding us that nothing is new under the sun.

According to Daron Acemoglu and James A. Robinson the joint authors of the book: “Why Nations Fail”.

“They have identified the glyph that indicated warfare known as “Star Wars” showering the Earth with a liquid that could be water or blood.”

What we need in order to ensure that the sun continues to shine on Nigeria is to ensure we engender critical mass by inviting past presidents of other professions – law; medicine; architecture; engineering; surveying; teaching; journalism to join us in our mission to rescue Nigeria from self-destruction.

We need to calm down and stay positive. False hope is better than none – even when the video of a lady being hacked to death with a cutlass by a man in Kaduna State in broadday light has gone viral.


(At body of past presidents of the Institute of Chartered Accountants of Nigeria dialogue on October 18, 2020)