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Tag: audit

  • NEITI begins 2015-2016 oil sector audit

    NEITI begins 2015-2016 oil sector audit

    The Nigeria Extractive Industries Transparency Initiative (NEITI) has commenced a comprehensive audit of the oil and gas sector for  2015 and 2016.

    Its Executive Secretary, Mr. Waziri Adio announced this in Lagos at a workshop for major oil companies and relevant government agencies expected to participate in the exercise.

    According to a statement endorsed by its Director of Communication, Dr Orji Ogbonnaya, the independent audit of the oil and gas sector will examine the fiscal, physical and process issues from, within and among the companies and relevant government agencies.

    Adio stressed that NEITI is committed to working closely with the companies under the EITI framework to create good business environment that is conducive for the inflow of more foreign direct investments into the extractive sector. He added that, for this to happen, there is need to encourage all companies to embrace transparency, accountability and corporate governance in conformity with the EITI standards.

    According to the report, major international oil and gas companies operating in the country were represented at the workshop.

  • NERC slams N47.6m fine on TCN over audit report

    NERC slams N47.6m fine on TCN over audit report

    The Transmission Company of Nigeria (TCN) has been fined N47,670,000 by the Nigerian Electricity Regulatory Commission (NERC) over the company’s failure to submit its 2013 and 2014 audited financial statements.

    According to a document with reference number NERC/Directive/160 signed by the acting Chairman, Dr. Anthony Akah, and General Manager, Legal, Licensing and Enforcement, Mrs Olufunke Dinneh, TCN has up to two weeks to pay the fine beginning from December 2  when the Directive was signed. The fine attracts five per cent interest daily after the due date.

    The commission said in a statement that TCN for failure to submit audited financial report has violated “Section 63 (1) of the Electric Power Sector Reform Act, 2005 that stipulates“a licensee shall comply with the provisions of its license, regulations, codes and other requirements issued by NERC from time to time.”

    Other infractions as contained in Directive 160 include Condition 4 and 5 of TCN’s Transmission Licence. Condition 4 stipulates that “Licensee shall furnish to the Commission information, in such a manner and at such times as the Commission may require” at the time and format as may be required by the Commission to perform its regulatory functions.

    Condition 5 of TCN’s licence further directs it to submit audited financial reports to the Commission as detailed in its Transmission Licence.

  • Bello orders audit of state owned tertiary institutions

    Bello orders audit of state owned tertiary institutions

    Niger State governor; Alhaji Abubakar Sani Bello has directed a forensic audit of the finances of all the state owned tertiary institutions of learning in the last two years.

    The directive was given when he received the report of the committee on the viability of the establishment of a university of education led by Hajiya Dije Bala in Government House, Minna.

    According to the Governor, the Ministry of Education, Science and Technology along with the Ministry of Finance was directed to audit all the income and expenditure of all the state owned higher institutions of learning to help prune down financial wastages in the institutions.

    From the report of the Committee, the Chairperson,  Hajiya Dije Bala told the governor that her committee was able to establish from the books of the state owned Ibrahim Badamasi Babangida University, Lapai that the last three years have shown that the institution is financially solvent.

    The Governor said, “From your findings, it shows that IBBU can stand on its own. And that aside from her internally generated revenue, large shrunk of money to be given to the university should be for capital projects.

    “If that is the case, I want a forensic audit of all the tertiary institutions. The Ministry of Education and that of Finance should conduct forensic audit of the books of these institutions. We have to be prudent in spending government funds.”

    In her submission, Hajiya Dije Bala, the chairperson of the committee recommended the setting up of visitation panels to all the state owned higher institution.

    She also recommended that the state is viable to establish a state owned University of Education.

  • Audit report: Nigeria loses N1tr in one year

    Audit report: Nigeria loses N1tr in one year

    • Senate invites NEITI chief

    The Senate President, Bukola Saraki yesterday lamented that Nigeria lost over N1trillion in 2013 alone in the extractive sector.

    To unravel what led to the loss, the Upper chamber  resolved to invite the Executive Secretary of the Nigeria Extractive Industry Transparency Initiative (NEITI), Waziri Adio, to brief it on the content of the 2013 Audit report of the agency.

    Saraki said if the 2016 budget figure is N6 trillion, N1 trillion could not be lost in one sector without the Senate finding out what happened.

    The resolution followed a motion on “the urgent need for the Senate to look into the NEITI 2013 oil, gas and solid mineral audit report” sponsored by Senator Tijjani Yahaya Kaura (Zamfara North).

    Senator Kaura in his lead debate noted that one of the key statutory functions of NEITI is to conduct regular audit of the extractive sector as provided in Section 4 of the Extractive Act.

    He said details of the report showed that the country made $58.07 billion from its hydrocarbon industry in 2013, while N33.86 billion was realised from the solid mineral sector the same year.

    The lawmaker said the report also indicated that $3.8billion and N358.3 billion stood as outstanding revenue from the Nigeria National Petroleum Corporation (NNPC) and its subsidiaries during the review period.

    The outstanding payments, he said, were due to unpaid consideration from divested Oil Mining Lease (OML) from NNPC and National Petroleum Development Company (NPDC) and cash call refunds by the National Petroleum Investment Management Services (NAPIMS).

    Kaura said it was worrisome that between 2005 and 2013,  $12.9 billion paid by the Nigerian Liquefied Natural Gas (NLNG) to NNPC was not remitted to the Federation Account.

    The report showed that Nigeria lost $5.966 billion and N20.4 billion in the sector from the operation of Offshore Processing Agreements (OPA) by state oil firm, the NNPC and crude oil swap and theft.

    He noted that the report also showed that  $99.98 million was reported as underpayment to the Federation Account from petroleum profit tax and royalties by oil and gas companies, as a result of the use of different pricing methodology by the government

    Kaura urged the Senate to invite the Executive Secretary of NEITI to brief the Senate on the missing funds and the cause of the leakage. The prayer was unanimously adopted.

    Saraki, while receiving the report, said: “I agree with you entirely that this type of opportunity also enables us to strengthen the institutions such as yours that have the responsibility of improving the governance and transparency administration of the management of our resources.

    “In preparation for this courtesy call, I studied the report in the early hours of this morning, and honestly I was just dumbfounded about the figures that we are talking about.

    “This is just 2013 -one year’s report. It is not cumulative. In one year’s audit report, you are talking about figures of over $3.8billion at that time, I am sure the rate was close to N150 per dollar. So you are talking about N650billion. Then you are talking about another N358billion which brings it close to about N1trillion.

    “Then you are talking about assets that were undervalued and transferred to NPDC, but still no payment was made. You are talking about NAPIMS paying cash calls for an asset that doesn’t belong anymore to NNPC and you truly wonder that this is going on right under our nose here in this country.

    “Honestly, I just concluded that as a country I don’t think we are serious. We are just paying lip service to this issue of fighting corruption because this is the real terminology of economic sabotage.

    “This is what I believe agencies that are truly fighting corruption should have taken up. Meanwhile you see them sometimes chasing a local government chairman for N10million, or chasing even the state governments for less.

    “These are just astronomical figures and nobody is being asked where the authority came from. Even if you say it was a minister, do we have where managements of those organisations have been able to say this is not what should be done?

  • Audit committee chief emphasises ethics in workplace

    The Chairman, Audit Committee Institute and Centre for Audit Quality, Nigeria, Christian Ekeigwe has called on employees in private and public enterprises to be ethical in the way they conduct the company’s businesses.

    Speaking at the 2016 Audit Committee conference titled: “Spirituality and Ethics in the Workplace: Positive Impact on Governance, Financial Reporting and Anti-corruption,” held in Lagos, he said the event was designed to draw attention to alternative ways of influencing peoples’ behaviour at work place.

    He expressed optimism that people could bring spirituality to bear in every relationship, so as to address vulnerabilities instead of exploiting those vulnerabilities for selfish purposes.

    “For example, if you are in charge of resources as an executive and you know the company doesn’t have enough controls to detect that you are stealing the money, instead of exploiting it, you heal it by using your position to recommend that better controls be put in place. So, it takes spirituality and not laws to control people in their comfort zone.

    “It is important that national policy makers give attention to the issue of spirituality because implicit in it is self control of the individual. If they can get that done, definitely it would be possible for us to have to have policies that would encourage individuals and organisations to imbibe spirituality, self-discipline and integrity,” Ekeigwe added.

    An industrialist, Dr. Felix Ohiwerei, also stressed the need for workers and employers to imbibe ethics in work place to achieve organisational growth.

    Ohiwerei, who was a former Chairman of Unilever, reiterated the need to do things right in the course of carrying out one’s responsibilities. “Life can become much easier for us if we continue doing the right things. The rules are there. What the corporations need to do is to obey the rules by doing the right things. It is in disobedience that we have problem.

    “The problem is that sometimes we see that things have gone wrong, we know they are sanctions, but we don’t apply the sanctions. So, that makes the sanctions needless and encourages more people to break the rules,” he said.

    Responding to a question on the challenges being experienced in the forex market, the industrialist said: “This is not the first time we are facing exchange rate problem. The important thing is to map out the way forward to get the country out of this problem. I think the answers are very clear. Nigeria doesn’t lack the answers, it is the will to pursue them.”

  • Agency to strengthen audit committee’s oversight functions

    The Board of the International Organisation of Securities Commissions (IOSCO) yesterday published the survey report on audit committee oversight of auditors, which seeks to help identify audit committee practices that could improve audit quality at publicly listed entities.

    The report summarises the results of an IOSCO survey of its members regarding the existing legal, regulatory and other requirements related to the oversight by audit committees of the auditor and the audit process of domestic publicly-listed entities.

    IOSCO is the global body for securities regulators with its membership regulating more than 95 per cent of the world’s securities markets in more than 115 jurisdictions. Nigeria is a member of IOSCO.

    The audit committee report also outlined audit committee requirements in force in different jurisdictions. In many jurisdictions, the audit committee of a publicly listed entity plays a key role in appointing external auditors and overseeing the financial reporting process and external audits.

    The survey results indicate that 96 per cent of the 47 responding jurisdictions require publicly listed entities to establish an audit committee or another similar governance body that is separate from the executive management and acts in the interest of investors.

    The report noted that at least one member of the audit committee is required to be independent of both the management of the publicly listed entity and the auditor in 100 per cent of responding jurisdictions, and 76 per cent of jurisdictions require a majority of audit committee members or all audit committee members to be independent.

    Also, at least one audit committee member is required to have special skills or experience in 87 per cent of responding jurisdictions.

    Over 90 per cent of responding jurisdictions require that the audit committee be explicitly responsible for assessing the auditor’s independence.

    Besides, a periodic assessment of auditor performance by the audit committee is required in 71 per cent of responding jurisdictions, although the guidance provided to audit committees to consider in assessing auditor performance varies significantly by jurisdiction.

    Also, communications from the auditor to the audit committee are required in 80 per cent of responding jurisdictions while requirements that audit firms provide transparency reporting exist in 61 per cent of countries with developed capital markets, while 15 per cent of growth and emerging market jurisdictions have this requirement.

    An active involvement by shareholders is evident in that 79 per cent of responding jurisdictions require a shareholder vote on auditor selection.

    The survey also highlighted a notable increase in the role and responsibility of the audit committee related to auditor oversight since 2004 when IOSCO last conducted a stock taking of audit committee requirements.

  • Audit again and again

    It should be an imperative to scrutinise payrolls and other financial activities

    Of all the revelations that have surfaced in the on-going corruption trials of public officials, none is more startling than the way a succession of chiefs of the Air Force is reported to have handled its statutory funds. Without prejudice to current court proceedings, to call it a criminal breach of trust is to pay it a compliment.

    According to court papers, the Air Force receives N4 billion monthly from the Federal Government to meet its wage bill. The actual wage bill is N2 billion, one half of the statutory grant. The remaining one-half is creamed off by top officials.

    Former Chief of Defence Staff, Air Marshal Alex Badeh, currently on trial, has been charged specifically with creaming off some N580 million a month in every year he has held that office for his personal use, including buying luxury homes in Abuja for his children.

    The Federal High Court in Abuja has been told that this practice was not instituted by Badeh, but that it has been a long-standing tradition in the Air Force. If this is indeed the case, Badeh should not be the only former air chief in the dock. His predecessors must also be called to render an account.

    That this practice went on so long unnoticed points again to the failure of audit that runs through all institutions of government. The lack of accountability that pervades the system is rooted in this failure.

    The law provides for regular audits and publication of outcomes. But compliance is spotty. When, for example, were the ministries and the principal departments and agencies last audited? When were the accounts of the National Assembly last audited? When were the accounts of State House that takes a huge chunk of the federal budget audited? How did officials react to the finding? Where were those findings reported?

      More often than not, the traditional audit is conducted long after projects or programmes have ended and some of the principal characters have left the scene. It teaches few lessons that could have guided the programmes and projects to successful implementation. The purpose of the audit is thus defeated.

    A continuous audit, the type devised by the Minister of Finance, Mrs Kemi Adeosun, and outlined in President Muhammadu Buhari’s budget speech, is likely to serve as a better instrument of transparency, accountability and control in the management of public funds.

    Under the scheme, a Continuous Audit Team will scrutinise the payrolls of the Air Force, the Navy and the Army in a bid to block leakages.

    This is a worthy initiative. If faithfully implemented not just for the armed services but for the entire public system, it will promote accountability and help reduce the cost of governance. But the audit is more than an instrument of accountability after the fact. It can also serve proactively, as a planning instrument.

    A timely audit, for example, would have pre-empted the deliberate padding of the federal budget with provisions for kitchenware and cookware and computers for the State House that the previous year’s budget and the budget for the year before had met. It would also have detected other willful distortions that turned the budget into a subject of deep cynicism when it should have been one of optimism.

    The Continuous Audit Scheme should not be limited to the payroll of the Army, Navy and Air Force but extended to planning and execution of projects and programmes.

  • Audit: N3.2tr unpaid into national treasury in 2014

    Audit: N3.2tr unpaid into national treasury in 2014

    No cash backing  for N2.3b Armed Forces premium

    $316.2m can’t be traced

    FACTS AND FIGURES

    •$235.6m gas cash diverted to escrow accounts
    •N73.5b spent contrary to established purpose
    •N36.4b released to ONSA for dam rehabilitation
    •N10billion SURE-P funds undisclosed
    •National Assembly’s management disbursed N9,514,568,222.62, without payment vouchers
    •N12.6b rice levy spent on urgent and critical needs
    •No evidence of accounting for the utilisation
    of the N5,199, 864, 234 Police Reward Fund
    •Beneficiaries of N803, 165, 879.78 withdrawn  from Ministry of Niger Delta not named
    •$2.3m contract awarded by Nigerian High Commission in Jamaica without due process

    •N2,395,851,978.00 for Group Life Assurance Premium for Armed Forces not cash backed

    A sordid picture of financial recklessness in the Dr. Goodluck Jonathan administration was yesterday painted by the Auditor-General of the Federation (AGF), Mr. Samuel Ukura.

    He said about N3.2trillion revenue was not remitted to the Federation Account.

    Besides, $235.6m earned from gas was diverted to  undisclosed escrow accounts.

    Ukura said the whereabouts of $316.2m in NGL Funding Account was unknown because no document was made available to confirm either the receipt or utilisation of the cash.

    More shocking was the disclosure by the AGF that payments amounting to about N73,547,759. 436 were made contrary to the established purpose of the funds.

    Of the N73.5billion, about N36, 432,423,968.73 was released to the Office of the National Security Adviser (ONSA) for rehabilitation of dams —a job reserved for the Federal Ministry of Water Resources.

    The management of the National Assembly allegedly disbursed N9,514,568,222.62, without raising payment vouchers.

    The AGF released the shocking details in the nation’s 2014 Audit Report, which was submitted to the Clerk of the National Assembly, Alhaji Salisu Maikasuwa, for consideration by  both chambers of the National Assembly.

    The presentation was in line with Section 85(2) (4) of the 1999 Constitution.

    The section says: “The public accounts of the Federation and of all offices and courts of the Federation shall be audited and reported on by the Auditor-General who shall submit his reports to the National Assembly; and for that purpose, the Auditor-General or any person authorized by him in that behalf shall have access to all books, records, returns and other documents relating to those accounts.”

    In fulfilment of his mandate, the AGF returned a damning verdict of sleaze and mismanagement of funds in 2014 during the administration of ex-President Jonathan.

    The report reads in part: “From the examination of NNPC mandates to CBN on Domestic Crude Sales and Reconciliation Statement of Technical Subcommittee of Federation Account Allocation Committee meeting held in January 2014, amount not remitted to FAAC was N3, 234,577, 666,791.35

    “Review of sales profile on sale of gas to NLNG ($235,685,861.31) was not paid to the Federation Account but transferred to some undisclosed Escrow Accounts. Relevant documents were not made available for verification.

    “Sales profiles ($316, 211,227) on gas in respect of Gas Export Sales due to the Federation were stated to have been paid and received through the NGL Funding Account. No statements or documents were made available to confirm the receipts as well as the utilisation of these payments made through the named account.”

    The AGF listed other financial infractions in 2014 by the government to include:

    “Withdrawal of N922, 429, 182 from Husked Brown Rice Levy as loan given to Independent National Electoral Commission(INEC) to finance 2015 elections.

    “About N7billion Comprehensive Import Supervision Scheme (CISS) Levy was withdrawn as loan given to INEC to finance 2015 elections. Expenditure is contrary to the purpose of the fund, which is to fund Destination Inspection Service Providers.

    “The value of the Federal Government and Federation Account Foreign Reserves was not disclosed in Financial Statements as part of the assets of the Federal Government.

    “Direct deductions from FGN shares in respect of 1% Police Reward Fund(N5,199, 864, 234). There was no evidence of accounting for the utilisation of this fund.

    “Non-disclosure of N10billion expenditure of Subsidy Re-investment (SURE-P) in the Consolidated Development Fund Statement.

    “Ministry of Niger Delta. Lots of funds through illegal withdrawals. About N803, 165, 879.78 was withdrawn through three illegal withdrawals as follows: N300m(3/9/2014); N305, 073, 540(17/9/2014) and N198, 092, 339.78( 19/11/ 2014). Beneficiaries not stated/ indicated.

    “National Assembly. N9,514,568,222.62 payments were made without raising payment vouchers at the Management Department, which is a violation of Financial Regulation 601.

    “Personal advances granted to 112 staff from recurrent votes and 50 members of staff from General Service Vote from July to December 2014 for various purposes all amounting to N1, 162, 009.305”.

    The report explained that payments amounting to about N73,547,759,436 were made, contrary to the established purpose of the funds.

    The highlights of the diversion of N73.5billion to other purposes are as follows:

    • N36,432,423,968.73 was released to the Office of the National Security Adviser (NSA) for the rehabilitation and construction of dams instead of the Federal Ministry of Water Resources.
    • N2,894,531250.00 was spent on the procurement of hand sanitizers for schools and critical public places.
    • N31,324,952,239.87 was paid for subsidy on fertilizer and youth employment in agricultural programmes.
    • N2,395,851,978.00 was approved for Group Life Assurance Premium for Armed Forces budget in 2013, but not cash backed.
    • N500,000,000 payment for agricultural programmes.
    • N500million payment for schools agricultural programmes

    “These were variances with the purpose of the fund. No evidence of these lines of expenditure in the 2014 Appropriation Act,” the AGF said in the report.”

    On the earthquake in Haiti, the AGF’s report indicted the Nigerian High Commission in Jamaica.

    The report said the Embassy awarded $2.3million contract without due process.

    The report said: “The aftermath of Haiti earthquake in 2010 led the Nigeria Red Cross to coordinate fund raising to assist Haiti victims. The total sum remitted to Nigeria High Commission, Kingston-Jamaica was US$4, 901,006. 16.

    “The fund was to primarily finance a project in Haiti with a view to alleviating the suffering of the victims and promoting  greater cooperation between the two countries.

    “A Nigeria-based contractor was awarded a contract to build a school in Haiti at the area not affected by earthquake at the contract sum of $2, 333, 420.89 in which 50 % of the contract sum was advanced(US$1, 166, 710.04 without due process.

    “Physical inspection of the project revealed that the project is at foundation stage and not more than 12% completion stage in October 2015 even though execution was suspended by the Ministry of Foreign Affairs.

    “The Project Coordinator was awarded a contract of US$366, 160 with the sum of US$192, 408 paid.

    “The Nigerian High Commission officials were indebted to the fund to the tune of US$ 552, 629 as at the time of audit in October 2015.

    “The fund was invested in fixed account and yielded accumulated interest of $147, 831.89 which was withdrawn and cannot be accounted for.

    “The balance in the account as at the time of audit in October 2015 was US$2, 890,656.5 credit.

    “As at the time of inspection, there was no evidence of Memorandum of Understanding (MOU) between the Nigerian and the Haitian Governments for the construction of the school. More so, the location of the school was not affected by earthquake in 2010. Therefore, the purpose in which the money was given cannot be achieved.

    “Acquisition and payment of a N3, 630, 000,000 property for Petroleum Equalization Fund(PEF) Head Office building at Kado District without Certificate of Occupancy(C of O).”

  • NASS and audit reports

    NASS and audit reports

    •Time to know how public officers spend our money

    The Auditor-General of the Federation (AGF), Samuel Ukura, has thrown what amounted to a bombshell, when he accused the National Assembly of frustrating the implementation of audit reports submitted by his office to them since 1999.

    At a retreat in Abuja, he told his audience which included members of the Public Accounts Committees (PACs) of both chambers of the National Assembly that the reports produced by his office were usually left unattended to by the committees saddled with the responsibilities of considering them at the two chambers. The reports are said to contain details of fraud and corrupt practices in ministries, departments and agencies (MDAs).

    His words: “Since 1999, we have submitted 14 audit reports which had yet to see the light of the day. The reports were not even considered and submitted by the PAC to the plenary, not to talk of even passing to the executive for implementation”.

    In the circumstance, the AGF expressed frustrations with the constitutional provision that mandates his office to submit its report to the National Assembly, just as he called for a new law which would grant his office the power to make the report public.

    To start with, we couldn’t agree more with the views of the representative of the Department for International Development in Nigeria, Ben Mellor, who also on the occasion noted that “audit reports remained the most effective tool for oversight functions”. Indeed, he merely stated the obvious when he averred that the “Public Accounts Committees are the most powerful instruments of parliament to check wastage and corruption”.

    We must observe that a number of puzzles – flowing from the revelations – readily fall into place. First is the routine but increasingly flagrant violations of the extant financial and general orders in the federal bureaucracy that have grown in the years covered by the reports. Second is the pervasive corruption fostered in the absence of institutional checks and oversights by bodies like the PAC. The third is the overall decay of the bureaucracy itself as an institution, a phenomenon that has hobbled the process of delivery of the public good –all of these happening because the PAC failed to do its public duty. 

    And what did the office of the AGF do in those years – if we may ask?

    It seems to us that the office of the AGF has not done nearly enough to bring the issues on the front burner. This is even more unfortunate considering that the process is something that the constitution actually mandates.  

    We note the suggestion by the AGF for the law to be changed to grant his office the power to make the report public in the light of current demands for openness and transparency. While the suggestion makes eminent sense, the issue is that it does not in any way take away the monumental abdication of a sacred duty by the PAC.

    Of course, the logical question that must flow from that abdication is the content of the erstwhile so-called oversight duties that have gulped billions of taxpayers’ money over the course of the last decade and half. For, if the nation is any familiar with the National Assembly oversights via the elaborate jamborees and duty tours packaged to deliver maximum returns to the lawmakers, one would imagine that the same institution would spare some moments to consider the report of audits that cost the office of the AGF time and taxpayers money to put together.   

    In their failure, they have simply let the nation down.   

  • Capital market firms fret over post-recapitalisation audit

    Some capital market firms have started preliminary internal audit, re-evaluation of assets and documentations ahead of the Securities and Exchange Commission’s (SEC’s) comprehensive post-recapitalisation audit of the market.

    On October 2, SEC released a provisional list of 972 firms that have been cleared to operate in the  capital market after if drew the curtain on a two-year recapitalisation exercise. The list included 437 capital market operators that were cleared to have met the new minimum capital requirements by the September 30, this year’s deadline, nine other operators that were in the process of merging into four companies, six self regulatory organisations and a long list of 525 capital market consultants and experts.

    The Nation had reported that SEC was planning to launch comprehensive investigative audits of capital market firms as part of post-recapitalisation process with a view to ascertaining the veracity of assets of the firms.

    SEC had indicated that the October 2, this year list was a provisional list and that the final list of registered and certified capital market operators would be made public after the verification exercise.

    A source had said  the Commission plans to conduct stress and impairment tests on the assets filed  by the firms and to further confirm the authenticity of their claims.

    The source said top on the list of accounting firms being considered by the Commission were KPMG and Akintola Williams Deloitte adding that the Commission decided on the investigative audits to avoid the repeat of bubble assets that undermined the previous recapitalisation exercise, especially in the banking and insurance sectors.

    Industry sources yesterday said several firms were undertaking preliminary review of their assets valuation with a view to ensuring that the overall calculation tallies with the requirements for their respective functions.

    Many firms that had used equity portfolios and other related assets were said to be sourcing for additional assets to shore up and bridge possible gap that might have been created due to depreciation in the valuation of the assets. The equity market has declined by an average of more than 4.4 per cent since the September 30 deadline for the recapitalisation.

    A top management executive at a broker-dealer firm said the company was making efforts to ensure that it has what the executive described as a buffer zone to make up for any possible demand for additional capital due to accounting difference that may arise from the audit.

    The source noted that while the firm had filed appropriate and factual information, it cannot be ruled out that auditors may have differing view and there may be need to harmonise such positions either way.

    million, representing an increase of 400 per cent. Minimum capital base for dealer increased by 233 per cent from N30 million to N100 million.

    Also, issuing houses, which facilitate new issues in the primary market, will now be required to have minimum capital base of N200 million as against the current capital base of N150 million. The capital requirement for underwriter also doubled from N100 million to N200 million. Trustees, rating agencies and portfolio and fund managers had their minimum capital base increased by 650 per cent each from N40 million, N20 million and N20 million to N300 million, N150 million and N150 million respectively. A  Registrar will now have a minimum capital base of N150 million as against the current requirement of N50 million. While the minimum capital base for corporate investment adviser remained unchanged at N5 million, individual investment advisers will have to increase their capital base by 300 per cent from N500,000 to N2 million.