In this presentation, I summarise the December 2012 transparency audit report by the Nigerian Extractive Industries Transparency Initiative (NEITI) on financial flows within Nigeria’s oil and gas industry – 2009 to 2011 , in 5 slides.

1. Nigerian Extractive Industries
Transparency Initiative Audit Report…
The strategic importance of extractive industries to Nigeria
has meant that special governance arrangements are in
place, including this ‘transparency audit’.
This audit looked at financial flows over a three year
period of US$148 Billion, primarily through key
government revenue accounts..
DECEMBER 2013

2. WHAT DOES IT SAY.
The auditors found some transactions couldn’t
be tracked, and therefore weren’t transparent.
Perhaps the most worrying of these were
dividend payments that couldn’t be tracked.
The auditors suggest that this implies a hidden
shareholding of 49% in one joint venture.
DECEMBER 2013

3. WHAT ELSE DOES IT SAY.
The report also finds that some government
corporations were using revenue and cash call
accounts inappropriately.
The auditors make special mention of the Nigerian
National Petroleum Corporation, for non-payment of
debt, and unauthorised deduction of subsidies from
debt payments.
DECEMBER 2013

4. WHAT ELSE DOES IT SAY.
The report highlights that audit design, where audit
findings are reliant upon reporting by affected
industries, is weaker.
The use of template reporting also seems to have
added a further layer of reporting for affected
entities, which may have increased the rate of noncompliance.
This would seem to highlight that public reporting
by the affected entities themselves is pretty poor.
DECEMBER 2013

5. WHAT DOES IT MEAN.
•
Transparency audits, in this case is a specific kind
of financial audit, can affect public trust in industry
players. Perhaps some Australian natural resource
programs could make more use of them?
•
The existence of this report may indicate reduced
country risk for investments in Nigeria. The content
of this report may counter that though.
•
Governance tools such as audit, are only as good
as the compliance appetite within an industry.
The comments on these slides are the views of Tim Kirby, Sydney.
You should always read the report itself before putting your reputation, or any money, on the line.
Tim Kirby, Sydney CA, CIA, LA-EMS
au.linkedin.com/in/timkirbysydney
DECEMBER 2013