Nigerian companies are mostly audited by foreign auditing firms called the Big Four - PricewaterhouseCooper (PWC), KPMG, Deloitte, as well as Ernst and Young. While these companies' major revenue comes from consultancy service, they also earn a sizeable amount from their auditing services.
In the cement industry, out of the Big Four, PWC, Deloitte, and KPMG audited the financials of the largest cement companies in Nigeria. Dangote Cement employed the services of Deloitte, Lafarge Wapco's financials was audited by KPMG and PWC audited the books of BUA Cement.
However, the services of these auditing firms are not limited to the cement companies alone, but, AllNews is focusing on the cement sector in this report, and the three cement companies are listed on the Nigerian Stock Exchange (NSE) - so as a public entity, they are mandated to make their books open to the public.
Dangote Cement company is the largest cement manufacturer in Nigeria, accounting for the market's largest share. The Aliko Dangote-owned company has a market capitalisation of 2.3 trillion, with BUA Cement coming next on the market chart, with a market valuation of 1.3 trillion.
BUA Cement currently trades on the capital market with NGN38.90 kobo per share. Lafarge Wapco is the third on the list falling behind BUA Cement and Dangote Cement. The company's market capitalisation is 188.4 billion, and it currently trades at NGN11.50 kobo per share. The three companies trade on the NSE Premium Board.
The cement industry paid over NGN180.3 million to the auditing sector in the second quarter of 2020. As earlier stated, Dangote Cement was audited by Deloitte, and the cement company in the second quarter of this year increased its auditing expenses from NGN140 million to NGN151 million in the corresponding period of 2019.
In the first half of 2020, Dangote Cement spent NGN336 million on auditing services, up from the NGN282 million it disbursed in the corresponding period of 2019.
Despite an increase in its revenue and profit after tax, BUA Cement's auditing fee reduced this year's second quarter when compared to the corresponding period of 2019 when BUA Cement paid N34.69 million for auditing expenses. In the period under review in 2020, PWC earned NGN29.3 million.
Meanwhile, Lafarge Wapco didn't precisely state the amount the company paid KPMG, however, AllNews gathered from Lafarge's financials that it spent N492.310 on technical services in Q2 2020, while it spent N1.5 billion in the first half of this year.