From compliance to performance: Modernising Nigerian audit standards

By Paul Dasimeokuma

For decades, the traditional view of auditing within the Nigerian public sector has been limited to a basic compliance exercise: a tick-box approach focused primarily on whether expenditures align with budgetary line items. While this remains necessary, it is no longer sufficient for a nation managing a complex ₦68.32 trillion budget.

The Federal Audit Service Bill, which has successfully passed through the National Assembly and now awaits presidential assent, seeks to revolutionise this landscape.

It proposes a fundamental transition from mere arithmetic verification to a sophisticated era of results-based auditing, ensuring that public resources are not just accounted for, but are used effectively to drive national development.

By expanding the mandate of the Auditor-General for the Federation (AuGF), the Bill introduces the legal framework for performance audits, value-for-money assessments, and forensic investigations.

This shift is critical because it ensures that public spending is evaluated for its real-world impact, economy, and efficiency, rather than just accounting ledger accuracy.

In a modern economy, it is not enough to prove that money was spent; the government must prove that the expenditure achieved its intended purpose. The new audit regime will ask: Did the Nigerian people get the best possible value for this Naira? This results-oriented approach is the hallmark of a transparent and high-performing government.

Under the current, obsolete 1956 framework, Nigerian audit reports are often plagued by chronic delays and a stifling lack of transparency. It is not uncommon for audit findings to be released years after the fact, by which time the officials responsible have moved on and the trail of accountability has gone cold.

The new Bill confronts this inefficiency head-on by introducing mandatory, non-negotiable timelines. It stipulates that Ministries, Departments, and Agencies (MDAs) must submit their financial statements within 90 days of the financial year’s end. Furthermore, the Accountant-General is required to submit the Federation’s consolidated statements by June 30th of the following year.

Crucially, the Bill breaks the seal of secrecy that has often shrouded audit findings. It designates audit reports as public documents and mandates that they be uploaded to the Federal Audit Service’s website immediately after their submission to the National Assembly.

This level of transparency is a powerful tool for building domestic and international investor confidence. In an era where Nigeria is competing for global capital, the ability to demonstrate a timely and open accounting of public debt and expenditure is a significant competitive advantage.

It empowers civil society, the media, and the business community to act as watchdogs, ensuring that fiscal transparency is a reality rather than a slogan.

Institutional independence serves as the cornerstone of this entire reform effort. For an audit institution to be credible, it must be shielded from the very entities it is tasked to oversee. The Bill addresses this by creating a corporate, autonomous Federal Audit Service with its own common seal. It establishes a Federal Audit Board responsible for the governance, recruitment, and discipline of staff.

By ensuring representation across geopolitical zones, the Board will foster professional inclusivity and institutionalise meritocracy.
For the first time in Nigeria’s legislative history, the Bill also spells out the specific, high-level professional qualifications required for anyone seeking the office of the AuGF, ensuring that the position is held by a technical expert rather than a political appointee.

Perhaps most significantly, the Bill solves the age-old philosophical and practical dilemma of who audits the auditor? It provides a clear mechanism for an Independent Auditor to review the Service’s own books, ensuring that the institution leading the charge for accountability is itself beyond reproach.

The economic benefits of this modernisation are substantial. Stronger audit enforcement acts as a preventative measure, reducing revenue leakages and discouraging misappropriation. By aligning Nigeria with global public financial management standards, such as those set by INTOSAI, the Bill elevates Nigeria’s standing in the global financial community.

Furthermore, the Bill grants the AuGF the specific power to conduct value-for-money audits on historically opaque areas, including subsidies and Public-Private Partnerships (PPPs).

President Tinubu’s administration has consistently emphasised the need for data-driven decision-making and strict fiscal discipline. The Federal Audit Service Bill provides the technical and legal framework to achieve those goals.

It creates a credible deterrence system against fiscal misconduct, ensuring that there are real consequences for those who violate public trust. Delaying assent further only extends our reliance on an obsolete system that is no longer technically part of Nigeria’s laws. It is time for Nigeria to adopt an audit regime fit for a trillion-dollar economy, an era where performance is the ultimate measure of success.

Paul Dasimeokuma of the Centre for Social Justice (CSJ) writes from Abuja.