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The total problem with the Buhari “total probe”

Governor Adams Oshiomhole of Edo State, in his capacity as the head of the National Economic Council (NEC) Ad-hoc Committee on the Management of Excess Crude Account Proceeds and Accruals into the Federation Account, stated yesterday that: “We have agreed in line with our mandate to appoint two reputable international audit firms to carry out a thorough forensic audit, not only of NNPC [Nigerian National Petroleum Company], which is more of excess crude, but other monies that accrued to the Federation Accounts. We have other revenues like bonuses, royalties, taxes, VAT that flow into the Federation Account.”

He added: “We believe in the end, we will be able to not just establish what had happened over the period but much more important, going forward with the changes the President has promised the country.”

The period he meant was from January 2010 to June 2015.

Any attempt to find out what happened to Nigeria’s revenues in the past five years is a welcome development. But Oshiomhole is just grandstanding and appears keen on scoring cheap political points.

The puerile attempt to big up “reputable international audit firms” is what James Brown would have called “talking loud and saying nothing”. Whenever folks talk about “reputable international audit firms”, they mean PwC, KPMG, Deloitte or Ernst and Young. These people tell whoever hires them what they want to hear. These are the types of auditors that gave the corporate fraudsters at Enron a clean bill of health.

Prem Sikka, Professor of Accounting at Essex Business School, said of the big four accounting firms: “They are the epicentre of a global tax avoidance industry and the loss of tax revenues is directly responsible for the current economic crisis. The [UK] Treasury should follow the US authorities and prosecute and fine the firms. The habitual offenders should be shut down.”

Sikka once wrote: “As external auditors they are responsible for auditing the accounts of financial enterprises, but have been very adept at letting the lying dogs sleep.

The UK has experienced a financial crisis in every decade since the 1970s. In every one, auditors appear to have been complicit.

The mid-1970s banking crash exposed frauds at banks and insurance firms.

Accounting firms also collected fat fees and approved dubious accounts.

The same pattern has continued at Johnson Matthey Bank and the fraud-infested Bank of Credit and Commerce International.
This was followed by the collapse of Barings, and the Bank of England investigators were unable to secure access to audit files and personnel at Coopers & Lybrand (now part of PwC) and Deloitte & Touche.

The auditor silence was also evident at Independent Insurance, Equitable Life and Farepak.

The 2007-2008 banking crash showed that major banks indulged in money laundering, sanction busting and interest rate fixing among other abuses.

Their accounts overstated capital, assets and profits but were all approved by auditors.

The Co-operative Bank is the latest casualty and its accounts also received a customary clean bill of health on that occasion from KPMG.

A 2011 report by the House of Lords Select Committee on Economic Affairs accused bank auditors of ‘dereliction of duty’ and concluded that ‘complacency of bank auditors was a significant contributory factor’ to the banking crash.”

Oshiomhole’s faith in these audit firms is either based on ignorance or he is just using their veneer of respectability to further an agenda different from finding the truth about Nigeria’s missing billions. It is quite possible that the very firms he is hoping conduct a “forensic audit” of the accounts colluded with the NNPC and others to hide revenue in offshore accounts.

The real story about any proper “forensic audit” of Nigeria’s federation accounts is that it would reveal not only fraud at federal level, but also the amounts disbursed to gangster governors like Oshiomhole for them to divert to private accounts.

What any serious government needs to do is conduct a proper criminal investigation by law enforcement agencies with proper forensic accountants who can follow the trail of illicit money transfers and money laundering through offshore tax havens.

Instead we have loud proclamations by looters like Oshiomhole declaring that crooks with the aid of crooked auditors will be auditing the dealings of fellow crooks, all for the benefit of the uninitiated.

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