The Nigerian audit and assurance industry witnessed a significant surge in revenue in 2024, with KPMG, Ernst & Young (EY), and PricewaterhouseCoopers (PWC) emerging as the top-earning firms for the year.
According to recently compiled data by Nairametrics Research on the top 50 publicly quoted companies, total audit earnings across the leading firms rose to N28.2 billion in 2024, up from N17.1 billion in 2023, representing a 65% year-on-year increase.
In today’s increasingly regulated and transparent corporate environment, the audit function remains a critical pillar of trust and accountability.
Audits provide independent assurance on the accuracy of financial statements, ensuring that investors, regulators, and other stakeholders can rely on reported figures for decision-making.
The relevance of auditing has grown significantly in the face of rising corporate scandals, global compliance expectations, and investor activism.
Audits help detect financial irregularities, promote good governance, and enhance financial transparency, which are essential attributes for building investor confidence and market stability.
Big 4 dominate Nigeria’s audit earnings
The Big Four accounting firms, KPMG, EY, PWC, and Deloitte, continue to dominate Nigeria’s audit space, collectively earning over N28.17 billion in 2024, accounting for more than 99% of total audit fees reported.
- KPMG topped the chart with N9.57 billion in 2024, a 75% increase from the N5.49 billion earned in the previous year. Some of the major clients of KPMG include Access Holdings, Dangote Cement, and FBN Holdings. Others include UACN, Wema Bank, Unilever Nigeria, AXA Mansard, and NEM Insurance.
- EY followed with N8.03 billion, up from N4.90 billion in 2023. The major clients in EY’s books include Guaranty Trust Holdings and UBA. Others are MTN Nigeria, Lafarge Africa, Nestle Nigeria, and Okomu Oil, among others.
- PWC posted N6.14 billion, compared to N3.51 billion in the previous year. PWC’s clientele includes Zenith Bank, Stanbic IBTC, BUA Cement, BUA Foods, PZ Cussons, VFD Group, etc.
- Deloitte rounded out the group with N4.44 billion, almost doubling its 2023 figure. The clients for the year include FCMB, Fidelity Bank, Aradel Holdings, Presco, Transcorp, and Custodian Investment.
Outside the Big Four, firms like BDO, Baker Tilly, and Nexia Agbo Abel & Co retained modest but consistent footprints, serving mid-sized companies and niche sectors.
Increased regulatory framework drives growth
In Nigeria, the Companies and Allied Matters Act (CAMA) 2020, as well as oversight from bodies like the Financial Reporting Council of Nigeria (FRCN) and the Institute of Chartered Accountants of Nigeria (ICAN), provide the regulatory framework for audit practices.
One notable regulation is the mandatory auditor rotation rule, which requires public interest entities (PIEs) to change their external auditors after a maximum tenure of 10 years. This rule is designed to strengthen auditor independence, reduce familiarity threats, and ensure a fresh perspective in the audit process.
Additionally, listed companies and regulated institutions such as banks and insurance firms are compelled by law to have their accounts audited by independent and licensed audit firms annually.
What Determines Audit Fees?
The audit fees earned by firms vary widely and are influenced by several key factors:
- Larger companies with complex group structures, international operations, or regulated environments often attract higher audit fees. For example, the likes of Access Holdings (N4.3 billion), UBA (N3.9 billion), Zenith Bank (N3.2 billion), and GTCo (N2.9 billion) led the list in terms of audit payments.
- Also, high-risk sectors like banking, oil and gas, and telecoms require more audit resources, thereby increasing the fee.
- In addition, clients operating across multiple locations or jurisdictions require more extensive audit coverage.
- The depth and breadth of audit procedures, including internal control reviews and compliance checks, also affect pricing.
Beyond audit: Diversification of professional services
While auditing remains a core offering, many of the leading audit firms have strategically diversified their service lines to reduce dependency on audit revenues and offer holistic solutions to clients.
Today, firms like KPMG, EY, PWC, and Deloitte earn a significant portion of their fees from non-audit services, including tax and Legal Advisory Services, covering regulatory compliance, transfer pricing, and tax structuring.
Also, they carry out consulting services, encompassing strategy development, operations optimization, and technology transformation. Other areas include M&A support, valuations, transaction services, cybersecurity, internal audit, and regulatory compliance.
Looking ahead
The performance of audit firms in 2024 highlights the continued relevance of external audits in promoting corporate integrity and market stability.
- With KPMG, EY, and PWC leading in earnings, and Deloitte showing strong growth, the dominance of the Big Four remains firmly intact.
- Looking ahead, as companies face stricter regulatory expectations and more complex operating environments, the demand for comprehensive assurance and advisory services will grow.
Additionally, the push for auditor rotation and greater scrutiny of non-audit services will shape how these firms structure their engagements and maintain independence in the Nigerian corporate space.
