Accounts, Audit, Annual Returns and Corporate Records
Accounts and audit
Companies must keep proper accounting records and prepare annual financial statements. Public interest entities use IFRS; others may use the IFRS for SMEs. Financial statements are audited unless the company qualifies as a small company. CAMA 2020 defines a small company by reference to turnover, net assets and employees (and excludes foreign-member companies and public companies). Exempt small companies must still file accounts.
Auditors are appointed annually by members, must be qualified (ICAN/ANAN), and report whether the accounts give a true and fair view. They have rights of access and to attend meetings; resignation requires a statement of circumstances.
Annual returns and records
Annual returns are filed with the CAC, generally within 42 days after the AGM, with the prescribed particulars. Companies must keep registers of members, directors, charges and minutes, open to inspection. Failure attracts penalties and can ground a winding-up petition.
Worked example
A private company has turnover of N80m, net assets of N40m and 30 employees, and no foreign member. It qualifies as a small company, so it need not appoint an auditor; it must still prepare accounts, file its annual return on time, and keep registers.
Traps
Thinking audit exemption removes filing obligations; confusing the annual return with the tax return; missing the 42-day deadline; assuming the auditor is the company's adviser rather than the members' watchdog.