On the 2025 Audit Committee Agenda

Audit committees can expect their company’s financial reporting, compliance, risk, and internal control environment to be put to the test in 2025. Beyond existing challenges such as local economic instability, global inflation trends, and heightened cyber threats, Nigeria’s political transitions, regulatory updates, and evolving ESG (Environmental, Social, and Governance) reporting standards will add complexity. Audit committees should evaluate their readiness in leadership, composition, and agenda priorities to address core responsibilities, including financial reporting, internal controls, and the rising complexities of risks specific to Nigeria’s dynamic business environment.

Drawing on insights from our survey work and interactions with audit committees and business leaders, we highlight nine issues to keep in mind as audit committees consider and carry out their 2025 agendas:

Focusing on the financial reporting, accounting, and disclosure obligations posed by regulatory demands, macroeconomic and risk landscape will be a top priority and major undertaking for audit committees in 2025. Failing to tackle these issues effectively can result in sanctions, financial inaccuracies, reputational harm, and a loss of trust among stakeholders.

Key factors driving the focus on Financial Reporting and Internal Controls include:

Regulatory Framework

Nigeria’s regulatory framework is governed by strict laws and standards, including the Companies and Allied Matters Act (CAMA), International Financial Reporting Standards (IFRS), and oversight by several regulators including the Financial Reporting Council (FRC), Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), etc. Meeting these demands requires robust financial systems and controls to ensure compliance and avoid penalties, reputational damage, or legal challenges.

Economic Volatility

In Nigeria, current ongoing economic uncertainty due to increasing inflation, foreign exchange volatility, high interest rates, increasing commodity prices, etc, and heavy reliance on oil revenues add further complexity to financial reporting. Companies have to adjust their financial processes and reporting practices to cope with valuations of assets, assessing liquidity, and managing foreign exchange transactions to avoid losses.

Strong internal controls protect the organisation from environmental uncertainties by providing a basis upon which the accuracy and reliability of financial data are determined.

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