Audited accounts for incorporated trustees
Why a Nigerian incorporated association's CAC annual return needs audited accounts, why the company exemption does not help, and how to plan the audit.
By Achekam · · 5 min read · For Accountants & audit firms in Nigeria
A church, a foundation, an alumni association or a community development body registered as incorporated trustees asks the firm for "the audit for CAC". Often the trustees have been told, by someone who knows company law, that small bodies do not need an audit. Sometimes they have filed without one for years.
The law for incorporated associations is not the law for small companies. Their annual return to the Corporate Affairs Commission must carry an audited statement of accounts, and the timing of that return shapes the whole engagement. This article explains why the audit is needed, why the company exemption does not settle the question, and how a firm can plan the work around the filing window.
The annual return carries an audited statement
Under the Companies and Allied Matters Act, 2020, the trustees of an incorporated association must submit an annual return to the CAC not earlier than 30 June or later than 31 December each year, other than the year of incorporation. The return must be accompanied by the audited statement of accounts for the year of return. The text is in section 848 of the Companies and Allied Matters Act as published by the CAC.
The same provision lists what the return shows: the trustees, the members of the council or governing body, land held and changes to the constitution. Default attracts a penalty prescribed by regulation.
The company exemption is written for companies
CAMA does exempt some entities from audit. Under section 402, a company is exempt from the Act's audit requirements for a financial year if it has not carried on any business since incorporation or it is a small company within the meaning of section 394, unless at any time in that year it was an insurance company, a bank or another company the CAC has prescribed.
On its wording, that exemption speaks of companies. The provision for incorporated trustees separately requires the annual return to carry an audited statement of accounts. A firm advising trustees who believe they are exempt should explain the difference and record the advice. If a body has filed returns without audited accounts in the past, the trustees should know that before the engagement is priced, because earlier years may need attention too.
Bi-annual statements as interim information
Incorporated trustees also report during the year. Under regulation 32 of the Companies Regulations 2021, they must file bi-annual statements on Form CAC/IT 5, made up to 30 June and 31 December each year, not later than 15 July and 15 January following. Regulation 33 fixes an association's financial year as 1 January to 31 December, and regulation 36 requires a copy of the register of members to be attached to every annual return.
For the auditor, the bi-annual statements are useful evidence. They show what the trustees reported to the CAC at the half-year and the year-end, and differences between those statements and the audited figures deserve an explanation on file.
Only firms on the FRC register may accept
Before accepting, the firm checks its own standing. The FRC says that from 1 April 2026 only audit firms and assurance firms listed on its National Audit and Assurance Firms Register are legally permitted to undertake, accept or continue any audit or assurance engagement in Nigeria. A not-for-profit client is no exception. Trustees comparing quotes should be told that a firm not on the register cannot do the work, whatever its price.
Report drafting and the registration checks before signing
When creating the engagement in Achekam, staff choose its type, such as statutory audit, independent review or a compilation, and a firm can add its own named types. A firm with many associations among its clients may want a named type for incorporated trustees audits, so they can be planned and tracked as a group.
The engagement team drafts the auditor's report on standard ISA 700, 705, 706 and 701 wording, whether unmodified, qualified, adverse or a disclaimer, and Nigerian packs supply their own wording. Approval is refused while any bracketed placeholder remains, and only the engagement partner approves. Where an association's records are thin, for example for cash collections, a modified opinion may be the honest outcome, and it is better to raise that possibility with the trustees at planning than at signing.
For a Nigerian firm, Achekam blocks approving or issuing the audit report, and the partner's signature on financial statements, until a second person has verified the firm's FRC register entry and the signing partner's FRC number, ICAN or ANAN standing and signing authority. The block cannot be overridden. The Audit Control Tower that frames this on Nigerian engagements is described in the audit control tower for Nigerian and Kenyan engagements.
Timing the audit for the December window
With a calendar financial year and a return window that closes on 31 December, the year runs like this:
| When | What happens |
|---|---|
| 31 December | Financial year ends; second bi-annual statement made up |
| By 15 January | Bi-annual statement to 31 December filed |
| First half of the year | Audit fieldwork on the year just ended |
| 30 June | Annual return window opens; first bi-annual statement made up |
| By 15 July | Bi-annual statement to 30 June filed |
| By 31 December | Annual return filed with the audited accounts |
The window gives the trustees most of a year, which tempts them to start late. Agree fieldwork dates in the first quarter, collect the bi-annual statements as they are filed, and aim to sign well before the last weeks of the year, when council meetings to approve the accounts are hardest to arrange.
A planning checklist
- Confirm the body is registered as incorporated trustees, not as a company.
- Explain in writing why the audit is required, and check whether past returns carried audited accounts.
- Confirm the firm's own FRC listing and the signing partner's verified registrations.
- Collect both bi-annual statements for the year and the register of members.
- Set fieldwork early in the year; target signing well inside the December window.
The filing itself, and what else goes with the return, is covered in incorporated trustees' annual returns.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
