How Auditors Ensure Audited Results Are Ready Within Weeks Of Year End


Nairametrics| As investors await the new earnings season companies quoted on the Nigerian Stock Exchange are already racing to become the first to release their full year results for the period ended December 2016. The NSE calls them “early fliers”. Most companies in the financial sector space, oil and gas, consumer goods etc. have their year ends fixed for December 31st.

Just this week, Guaranty Trust Bank and Access Bank announced that their respective boards have decided to meet on January 25th and 26th respectively to review the results, informing investors and stakeholders that people who are conversant with the results are not permitted to buy or sell the stocks between January 4th until the result is released on the Nigerian Stock Exchange. So how is it that results can be released this soon?

Regulators view companies that release their results on time as efficient, investor friendly and have sound corporate governance. For most investors, companies that release their year-end results on time is a signal that they also have sound internal processes, keep proper book of accounting and are unlikely to mess around with their financial records.

We reached out to some auditors and they inform Nairametrics that what auditors do now is to come in early in December to review the accounts of the companies from January to November of the year. They then visit again in January to review the financial statements in December, focusing on any number of materiality that may have occurred in the singular month.  This way they are able to close out within days.

Last year Forte Oil was the first to release its audited accounts and did that in the first two weeks of the year.

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ymas

Allow me to add that some institutions (specifically those in the financial services that have a huge number of customers) may also have interim audits carried out during the year in addition to the early audit carried out in December as discussed in the article.

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