Late audited accounts in Nigeria cost money before they cost penalties. Banks write audited statements into loan covenants, the CAC expects them with your annual return, and one missed date can freeze a credit facility. This case shows how one Abuja contractor got back on track.
This is an anonymised case. Details have been changed and no real client is described.
What was the situation?
A construction company in Abuja held an ₦850 million revolving facility with a commercial bank. The facility letter required audited financial statements within 120 days of each year end. For a 31 December year end, that date is 30 April.
The accounts were not ready. On 6 May the bank wrote to say it reserved the right to suspend drawdowns. The company had a ₦120 million mobilisation payment to fund on a new contract and could not draw a naira.
Why were the accounts late?
VOG Global was engaged on 8 May. Our first week was a diagnosis, not an audit. Three problems explained the delay:
- Bank reconciliations. Two project accounts had not been reconciled since August, leaving an unexplained ₦38 million difference.
- Work in progress. ₦210 million of contract work in progress had no certified valuations behind it.
- Fixed assets. The register still listed plant sold in 2024, an overstatement of ₦64 million.
None of these is exotic. Together they stopped the auditor from signing.
How was it resolved?
- We agreed a written timetable with the bank within five days, with a firm sign-off date of 12 June. The bank held the facility in place while each milestone was met.
- The finance team closed both bank reconciliations against statements. The ₦38 million difference came from unrecorded transfers between project accounts.
- The company obtained engineer-certified valuations for the work in progress. Where certificates came in lower, the balance was written down by ₦22 million.
- The fixed asset register was cleaned and the 2024 disposals removed.
- The auditor signed on 11 June and the bank had the accounts the next day.
Drawdowns resumed on 16 June. The bank charged a waiver fee, but the facility stayed in place and the mobilisation payment was funded.
What does the law say about audited accounts?
Under the Companies and Allied Matters Act 2020, section 422, certified copies of the balance sheet, profit and loss account, and the auditors' and directors' reports go with the annual return. Section 421(1) sets the return at 42 days after the AGM, and each AGM must fall within 15 months of the last. Small companies and single-shareholder companies are excepted from some of these steps. The CAC sets late-filing penalties at its discretion (summary: The Nigerian Lawyer).
Tax is the second reader. Audit-readiness checklists published by Nigerian law firms list audited statements, trial balances, fixed asset registers and bank reconciliations among the first documents the tax authority asks for (see Mondaq). The same records that delayed this audit would have slowed an NRS query too.
What this means for your business
- Read your facility letters. Find every reporting covenant and diarise the dates.
- Reconcile monthly. A bank account left alone for eight months is a bad week waiting to happen.
- Certify work in progress. Get valuations signed at each period end, not after the auditor asks.
- Talk to the bank early. A written timetable sent before the deadline is worth far more than an apology sent after it.
For the timeline, see our 11-week year-end audit checklist. For what lenders look for before they say yes, read our guide to cash-flow lending in Nigeria.
FAQ
Can a bank suspend a loan if audited accounts are late? It depends on your facility letter. A missed reporting covenant often lets the bank suspend drawdowns, charge fees or ask for a waiver process. Read your own documents and speak to your relationship manager before the date passes.
Do small companies need audited accounts for the CAC? Section 423(2) of CAMA 2020 lets qualifying small companies send a signed certificate instead of audited accounts with the annual return. Your bank, your investors and the tax authority may still ask for audited statements, so check each requirement separately.
When should audit preparation start? Before the year ends. Reconciliations, asset counts and valuations are far cheaper to fix in November than in April.
Does a lender, board or CAC deadline depend on your audited accounts? Contact VOG Global in Area 10, Garki, Abuja, or visit vog.global to book an audit readiness review before your next year end.